global insights and guidance to selling internationally

© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.

INSIGHTS TO SELL INTERNATIONALLY Mar 26, 2015


Emerging Markets & Mobile are key drivers of Cross-border Trade Growth

2

International e-commerce is still at a relatively early stage but is growing quickly International shoppers tend to be younger, better educated and spend more than the average consumer and represent an attractive market for those merchants who can meet their demand for trustworthy, simple and risk-free retail. Source: PayPal’s Report: Modern Spice Routes - The Cultural Impact and Economic Opportunity of Cross-Border Shopping

Cross-border online and mobile shopping 5 year growth trends


Barriers

3

The Consumer Perspective

Consumers are becoming increasingly confident with shopping across borders. However, they still mention some concerns as listed below:

• Concerns about fraud or non-delivery

of goods

• What to do if a problem arises

• Concerns over delivery

• Uncertainty about their consumer rights

The Business Concerns

Despite the growing market opportunity, many retailers aren’t actively pursuing international opportunities because they’re unsure about:

• Delivery costs

• The complexity of handling returns

• National regulations and taxes

• Accommodating locally preferred payment methods

• The need to build local brand awareness.


Most popular overseas online shopping destinations

4

% of cross-border shoppers across surveyed markets purchased from these markets in the past 12 months

Source: PayPal’s Report: Modern Spice Routes - The Cultural Impact and Economic Opportunity of Cross-Border Shopping


Top five cross-border purchase categories

5 Source: PayPal’s Report: Modern Spice Routes - The Cultural Impact and Economic Opportunity of Cross-Border Shopping


The five species of cross-border online shopper

Research reveals that the

cross-border shopping

population around the

world can be divided into five

distinct types.

6 Source: PayPal’s Report: Modern Spice Routes - The Cultural Impact and Economic Opportunity of Cross-Border Shopping


Canada

7

• Canada is the fourth most popular online cross-border shopping destination across the U.S., U.K, Germany, Australia, China and Brazil.

• These six markets purchased a combined CAD 6.4 billion worth of Canadian goods in 2013.

• A 192 per cent growth in international online sales is expected by 2018, bringing cross-border sales to an estimated CAD 12.8 billion

Rank Industry

1 fashion

2 auto-parts

3 website-services

4 software

5 travel

6 sports-equip

7 arts-n-craft

8 memorabilia

9 cellphones

10 computer-hardware

Based on PayPal data, below are top exporting industries from Canada -


Canada’s Top online export countries… (based on PayPal data)

8

1 USA

2 UK

3 Australia

4 Germany

5 France

6 China

7 Netherlands

8 Hong Kong

9 Brazil

10 Japan

1

2

3

4 5

6

7

8

9

10

Austria, Norway and Israel are opportunities


9

How They Shop • 70% of consumers shopped online; • 30% have shopped from intl sites. Consumers most often purchase from: 1. China (13%) 2. UK/Great Britain (9%) 3. Canada (9%) Categories: 1. Clothing/apparel, footwear and

accessories (34%) 2. Toys and hobbies (18%) 3. Travel and transportation (18%) Barriers and Drivers • shipping costs, and • delivery times.

How They Shop • 76% of consumers shopped online; • 42% have shopped from intl sites. Consumers most often purchase from: 1. United States (24%) 2. China (16%) 3. Germany (9%) Categories: 1. Clothing/apparel, footwear and

accessories (33%) 2. Cosmetics/beauty products (19%) 3. Jewelry/watches (18%) 4. Entertainment/education (physical

items) (18%) Barriers and Drivers • shipping costs

How They Shop • 70% of consumers shopped online; • 76% have shopped from intl sites. Consumers most often purchase from: 1. United States (50%) 2. UK/GB (36%) 3. China (32%) Categories: 1. Clothing/apparel, footwear and

accessories (42%) 2. Entertainment/education (physical

items) (27%) 3. Toys and hobbies (24%) Barriers and Drivers • shipping costs

https://www.paypal-passport.com/


10

How They Shop • 26% of online consumers have shopped

from intl sites. Consumers most often purchase from: 1. United States (14%) 2. Hong Kong (9%) 3. UK/Great Britain (6%) 4. Japan (6%) Categories: 1. Clothing/apparel, footwear and

accessories (45%) 2. Cosmetics/beauty products (38%) 3. Consumer electronics (31%) Barriers and Drivers • shipping costs

• Word of mouth - Ensure Your Supply Can Meet the Demand

• Shipping Costs

• Focus on a Product Line that is Already in Demand

• Go Mobile

• Invest in Translations

• Simplify Payment

• Singles Day (November 11th)


Top Canadian Cities exporting and their top export industries (based on PayPal Data)

11

1

2

3

4

5 6

8

City Industry 1 Toronto Fashion 2 Vancouver Fashion 3 Montreal Fashion 4 Calgary Photography 5 Mississauga Auto-Parts 6 Ottawa Software 7 Victoria Fashion 8 Edmonton Fashion 9 London Travel 10 Oakville Fashion

Rank Industry 1 fashion 2 auto-parts 3 website-services 4 software 5 travel 6 sports-equip 7 arts-n-craft 8 memorabilia 9 cellphones

10 computer-hardware


Case Study: Canadian companies that went global

12

Penzu, www.penzu.com Alexander Mimran Australia, Germany, Hong Kong, New Zealand

Whistle & Flute Clothing, www.whistleandfluteclothing.com Miranda and Ryan McCullagh Southeast Asia and Canada

http://www.penzu.com

http://www.whistleandfluteclothing.com


6 steps to consider when taking your business across borders

13

Planning your Entry

•Demand for product

•Local Infrastructure

•Customers •Competition •Routes to

market •Cultural

differences •Promoting

your presence

Accepting Payments

•Preferred payment methods

•Local currency

Shipping Services

•Delivery – clarity, free

•Returns- FRS, time limit, other fees

Taxes, laws and regulations

•Duties and taxes

•Data protection

Setting up in-country presence

•Build confidence and credibility

•User Testing •Make your

website easy to use

Great local customer service

•Email address •Telephone

helpline •Skype or

instant messaging

https://www.paypal-passport.com/

Questions

global insights and guidance to selling internationally

Technology

border shopping crossborder

crossborder sales

crossborder shoppers

economic opportunity

species of cross

paypal data

consumer rights

mobile shopping