PayPal is among the participants in a study that found large untapped possibilities for online retailers in four key markets.
Bloomberg News
The U.K., U.S., Chinese and German online retail markets will double in size by 2018 to £645 billion ($985 billion) mainly because of an increase in mobile shopping, according to a new study.
Google Inc.GOOGL -0.43%, eBay Inc.'sEBAY -0.71% PayPal unit and OC&C Strategy Consultants looked at search and transaction data and online shopping habits of consumers in the four countries, which they said are the largest e-commerce markets in the world.
U.K. retailers, according to the study, have a huge opportunity abroad to grow, with Britain being the most popular online overseas destination for German shoppers, and the second-most popular for Chinese and American shoppers.
When shopping online for British goods, Chinese and German shoppers spend more than domestic shoppers, spending on average 2.7 and 1.7 times as much in each transaction. Chinese shoppers purchase from U.K. retailers online almost as frequently as domestic shoppers, according to the study. People are motivated to shop online internationally to get unique products they can’t find in their own country, followed by better prices and an assurance of quality.
Anita Balchandani, head of U.K. retail at OC&C, said most U.K. retailers offer shoppers just the basics, like offering international delivery. Companies that are doing more are seeing results, she said. One example is ASOS ASC.LN -1.91% PLC, which has adopted zonal pricing and uses local warehouses to support returns. The company delivers about 25% of global orders from its U.S. warehouse and about the same amount from its German hub. Searches for ASOS from overseas have grown faster than for any other U.K. retailer, according to the study.
U.K. retailers could make up to 60% more if they did things like respond to local customer preferences, it added.
The numbers also showed that U.K. consumers are more likely to buy things using their smartphones that their counterparts in other countries. According to data from Paypal, 59% of online transactions are being made via mobile in the U.K., compared with 45% and 24% in the U.S. and Germany.