Online payments company PayPal has released a paper on the The Modern Spice Routes which describes the pattern of online trade across the US, Germany, UK, China, Brazil and Australia.
The results are a snapshot of how online commerce patterns are evolving.
PayPal commissioned the Nielsen Company to survey 6,000 online shoppers about their cross border online buying habits to determine some of the characteristics of global internet commerce.
What immediately stands out in the report is the United States’ dominance with 45% of global market share, China follows with 26%.
At the bottom of the pack is Australia with 16% and, surprisingly, Germany with 13%.
The US itself is an interesting study with the most preferred overseas shopping destination being the United Kingdom followed by China.
Why are people shopping online?
American respondents were overwhelming shopping overseas to access more variety, with 80% of respondents citing the reasons for shopping offshore being “more variety that cannot be found locally”.
Finding more variety was the key factor in all the markets. Even in countries like China and Australia were respondents cited saving money as their main reason for shopping internationally online, more diversity in offerings came a very close second.
That in itself show the opportunity for companies selling internationally – be unique and don’t offer what can be found at the local WalMart or Tesco.
Illustrating this, the PayPal report cited Australia’s Black Milk clothing and Germany’s Hatshopping as two international success stories.
Intra-region trading
An understated point with the report is just what proportion of international shopping is of each country’s spend – in the United States’ case it is only 18% while in Australia it’s 35%.
Illustrating those internal trading patterns are the British and German figures that show online shopping in other European nations is substantial, so intra-EU trade is a considerable factor.
Similarly, the second popular destination, after the United States, for Chinese online shoppers is the Hong Kong SAR. In fact the Chinese statistics show that intra-Asian trade is just as substantial as EU commerce with Japan, Korea and Singapore all feature highly on the list of shopping destinations.
This illustrates a problem for Australia as it has neither the United States’ massive domestic market or a group of closely integrated neighbours and the high level of international online shopping indicates just how poorly local merchants are doing with their internet strategies.
Indeed, for Australia that the proportion of online shoppers buying overseas is so high should be a worry for local merchants.
Today’s modern trade of bulk carriers, courier companies and shipping containers is very different to the spice routes of Marco Polo’s day, the world is evolving around new trading patterns right now.
For businesses like Australia’s retailers those changed trade routes may not be kind to those who can’t change.