1. PayPal Cross-Border Research 2014 GLOBAL SNAPSHOT
CONFIDENTIAL
PayPal Cross-Border Research 2014 GLOBAL SNAPSHOT
PayPal Project Sponsor: Melissa O’Malley
PayPal Market Research Contact: Daniel Jenkinson
Ipsos MORI Contacts: Eleanor Pettit & Peter Attwell

2. Research Methodology
This study was conducted across 22 markets and 17,500+ consumers globally.
Fieldwork
Sample, per market
Global Fieldwork conducted Sept-Oct 2014
22 markets
This research was carried out to the international quality standard for market research, ISO 20252:2012
Sample of c.800 per market.
Own and/or use an Internet-enabled device*
Nationally representative of online population Aged 18+
Online survey
Data weighted to adjust for known population incidence and demographic profile
Respondents recruited from online panels
20 minute questionnaire
Questionnaire
Transaction & Spend:
Past 12 Months &
Next 12 Months
E-commerce Behaviour and Attitudes
Cross-Border Commerce
Mobile Commerce
Screening
*Desktop computer/Laptop/ notebook computer/Tablet /Smartphone/Some other type of mobile phone/Electronic organizer / PDA with wireless voice and data features/Games console with Internet connectivity (e.g. Wii) 

3. GLOBAL SNAPSHOT
UK, France, Germany, Austria, Switzerland, Italy, Spain, Netherlands, Sweden, Norway, Denmark, Poland, Turkey, Russia, Israel, UAE, USA, Canada, Brazil, Mexico, China, Australia

4. Summary of findings: Cross border (CB) global study
Market penetration: CB is a driving force in the global marketplace with ~50% online shoppers saying they buy from other countries around the world (country average, not weighted for market size).
Market opportunity: Growth of online CB expected, especially from emerging markets.
CB hotspots: Western Europe (esp. UK, DE), North America (esp. US) and APAC (esp.CN) are the three key CB destinations (i.e. most CB consumers buy from these three regions). Significant intra-EU trade is evident.
What’s bought: Clothing/footwear/accessories and consumer electronics (incl tablets, mobiles, peripherals) are the most sought after CB categories.
CB shoppers are valuable consumers: their total online spend (domestic and CB) is around 2x that of domestic only shoppers. They also get the benefits of online shopping.
CB shoppers are more mobile oriented than domestic only shoppers.
Top pain points: delivery shipping costs, duties/taxes/fees and concern about not receiving item.
Top drivers: free shipping, having a safe way to pay, access to items, lower cost of items, free return shipping.
Free return shipping is considered a ‘must-have’ by around half of shoppers, a similar proportion to free shipping.
PayPal is a dominant payment method for cross border: In a majority of markets, PayPal has a relatively high penetration of usage for CB purchases compared to other payment methods. This also correlates with markets where eBay is strong domestically or has a good share of CB.

5. Cross border commerce is a driving force in today’s global marketplace
A significant proportion of online shoppers claim to make cross border purchases, and almost all cross border shoppers also shop domestically.
Self-stated domestic and cross border purchasing in past 12 months %
56%
Multi-country average* for CB
North America
Western Europe
Nordics
Central, Eastern Europe
Middle East
Latin America
Asia Pacific
* Multi-country average not weighted by market size
Base: Online shoppers. N=12,349. Q. Thinking about shopping online, from which of the following country or geographies’ websites have you purchased in the past 12 months? Please include your home country if applicable.

6. Central, Eastern Europe
Expect continued cross border growth and penetration, especially from ‘emerging’ markets
Consumers are generally positive about shopping cross border more often.
CBT shopping intent
RU TR BR CN
10% online adults to start shopping cross border*
25% online adults to shop cross border more often* %
North America
Western Europe
Nordics
Central, Eastern Europe
Middle East
Latin America
Asia Pacific
* Multi-country average not weighted by market size
Base: Online adults. N=12,878. Q36f. In the next 12 months, how do you think your online shopping habits will change, if at all, in terms of how often you purchase from online stores in your country or from another country?

7. US and China are most popular cross border destinations. W
US and China are most popular cross border destinations. W. Europe a key region.
Popular online destinations for cross border shoppers*
What are the popular online destinations for cross border shoppers within a particular region (including intra-region international purchasing)? %
Nordics
USA 31%
UK 30%
Germany 19%
China 15%
CEE
China 24%
USA 16%
Germany 13%
UK 11%
W. Europe
Germany 28%
USA 18%
UK 17%
China 13%
North America
USA 32%
China 15%
UK 10%
Note on interpretation: figures are % of global* online shoppers buying internationally from these countries ME
USA 36%
China 29%
UK 17%
Hong Kong 11%
APAC
USA 31%
UK 20%
Hong Kong 17%
China 15%
Note on interpretation: North American shoppers buy from these countries
LATAM
USA 39%
China 26%
*22 country average (not weighted by market size)
Region definition (countries surveyed): Western Europe: UK, Germany, Austria, Switzerland, France, Italy, Spain, Netherlands; Central and Eastern Europe: Poland, Russia; Nordics: Denmark, Sweden, Norway; North America: USA, Canada; Latin America: Mexico, Brazil; Middle East: Turkey, Israel, UAE; Asia Pacific China, Australia
Base: Online shoppers. N=12,349. Note: China and HK asked separately. Includes intra-region purchasing. Q. Thinking about shopping online, from which of the following country or geographies’ websites have you purchased in the past 12 months? Please include your home country if applicable.

8. Clothing, footwear and accessories and consumer electronics are top cross border categories purchased
Top 10 CB categories purchased* (%)
Top CB categories purchased by region
Clothing/apparel, footwear and accessories
Consumer electronics,
Toys and hobbies
Travel and transportation
Entertainment/education (physical items)
Cosmetics/beauty products
Jewellery/watches
Entertainment/education (digital)
Sports/outdoors
Household appliances, household goods and furniture
Nordics
Clothing/footwear 36%
Travel/transport 21%
Entertainment/ (phys) 21%
Consumer electr. 21%
Toys & hobbies 17%
W. Europe
Clothing/footwear 33%
Consumer electr. 24%
Entertainment/ (phys) 21%
Travel/transport 20%
Toys/hobbies 17%
North America
Clothing/footwear 33%
Entertainment/ (phys) 24%
Travel/transport 17%
Toys/hobbies 17%
Consumer electr. 16%
CEE
Clothing/footwear 50%
Consumer electr. 35%
Toys/hobbies 30%
Cosmetics/beauty products 24% ME
Clothing/footwear 47%
Consumer electr. 34%
Travel/transport 28%
Toys/hobbies 27%
APAC
Clothing/footwear 43%
Cosmetics/beauty products 26%
Consumer electr. 25%
Entertainment/ (phys) 23%
Jewelry/watches22%
LATAM
Clothing/footwear 47%
Consumer electr. 38%
Toys/hobbies 24%
Entertainment/ (digital) 23%
Cosmetics/beauty products 22%
i.e. people in NA like to buy ‘xyz’ from other countries
*22 country average (not weighted by market size)
Region definition (countries surveyed): Western Europe: UK, Germany, Austria, Switzerland, France, Italy, Spain, Netherlands; Central and Eastern Europe: Poland, Russia; Nordics: Denmark, Sweden, Norway; North America: USA, Canada; Latin America: Mexico, Brazil; Middle East: Turkey, Israel, UAE; Asia Pacific China, Australia
Q. In the past 12 months, what kinds of products have you purchased from websites from other countries? Please select all that apply
Base: Online cross border shoppers. N=6,899. Q. In the past 12 months, what kinds of products have you purchased from websites from other countries? Please select all that apply.

9. Cross border shoppers are valuable consumers
They spend more online, see the benefits of shopping online and are more mobile oriented.
Online spend
Online shopping attitudes
Share of online spend on mobile
(self-stated)
% Somewhat/Strongly Agree
Domestic Only
Shoppers
Cross-Border
Shoppers*
Domestic Only Shoppers
Cross-Border Shoppers*
Enables me to shop anytime, anywhere
Helps me locate info. about retail stores (e.g. opening hours, locations)
I like that I can make purchases from the comfort of my home
Gives me more product choice
Helps me research and choose items I plan to purchase in store
Gives me back time
Makes my life easier around the holiday season
Enhances my experience of shopping in store
CB shoppers expect +6ppt share of spend from mobile vs domestic only shoppers
2x…the amount that cross-border shoppers spend online vs domestic only shoppers**
* * self-stated. N=5448 domestic; n=3936 cross border* shoppers
N=5448 domestic; n=3936 cross border* shoppers
N=5448 domestic; n=3936 cross border* shoppers
Q18. Here are some statements that some people have made about shopping online, via any device. Please indicate whether you agree or disagree with each statement.
Q14. Thinking about the next 12 months, do you expect your proportion of spend by device to increase, decrease or stay the same?
Base: Online shoppers
Q6. Thinking about each of the following categories below, what is your personal total annual online and offline spend in the last 12 months? This includes food, clothing and other items but excludes rent or mortgage payments, utility bills (gas, electric, council tax) and large one off payments (e.g. buying a new car)?
Please type in the closest full number to your total spend in SEE INSERTS FILE FOR CURRENCY LIST. For example, if your total spend is 12.99, please type in 13. If you’re unsure, please provide your best guess. If you don’t have any spending for the following categories, enter nothing or 0.
By online we mean any purchase made on the internet via a desktop / laptop / notebook / Smartphone or Tablet. By offline we mean any purchase made in a physical store.
TOP
Online (Internet via any device)
Offline (Physical stores)
Multi-country average.
* Those who spend >10% of their online expenditure cross-border

10. However, CB shoppers still face hurdles…
Top pain points are delivery shipping costs, duties/taxes and concern about not receiving the item.
Barriers to Cross-Border Shopping
Top 10 barriers
Other barriers
Delivery shipping costs
Concern about customs duties/fees /taxes
Concern that I may not receive the item
Concern item would not be as described
Delivery time not fast enough
Difficult process for returning products
Concerns about counterfeit goods
May not receive sufficient help if problems
Return shipping costs
Concern about identity theft / fraud
Lack of buyer protection or insurance in case of problems
Concern about security of my financial or personal details
Preferred payment method not always offered
Unsure of the return policy for shipments
Currency conversion rate not favourable
Lack of tracking and notification
Different language of websites, product descriptions and customer support
Payment is in foreign currency
% of those who shop cross-border
% of those who do not shop cross-border
Base: N=5448 domestic; n=6899 cross border shoppers. Multi-country average. Q. Which of the following reasons prevent you from making purchases from websites from another country? /[ …more often]?
Which of the following reasons prevent you from making purchases from websites from another country? / Which, if any, of the following reasons prevent you purchasing from websites from another country more often?

11. There are ways to drive cross border online shopping
Key drivers are free shipping, safe way to pay, access to items, low cost, free return shipping.
Drivers for Cross-Border Shopping (%)
Top 10 drivers
Other drivers
Free shipping
Safe way to pay
Can find items which are hard-to-find locally
Lower overall cost to buy items from another country
Free return shipping
Customer support in my language
Website available in my language or translation available
Lower shipping costs
Costs shown/payment possible in your local currency
Proof of product authenticity
Favorable returns policy
Favorable buyer protection
Faster delivery
Lower transaction fees
Offers my preferred way to pay
Shipping costs, if any, shown before checkout
Coupons/promotions/discounts
Offer delivery tracking/notifications
Wider product selection
Visible, trusted payment logo
Favorable currency conversion rate
If I needed to send a gift to someone living in that country
Flexible delivery dates
Q. Which, if any, of the following would make you more likely to buy from a website from another country?
Which, if any, of the following would make you more likely to buy from a website from another country?
Base: Online shoppers. N=12,349. Multi-country average. Q. Which, if any, of the following would make you more likely to buy from a website from another country?

12. Free return shipping is a ‘must have’
PayPal’s initiatives are well-aligned with cross border shopper needs
Importance of Shipping Options when Shopping Domestically or Cross-Border
Free shipping / free delivery
For domestic shopping
For cross-border shopping
Express delivery
Flexible delivery times
Free shipping / postage for returns
% Nice to Have
% Must Have
Base: Online adults. N= Multi-country average. Q. Listed below are some options for delivery/returns that could be offered by online retailers. For each option, please indicate how important it would be to you for an online retailer to offer this if you were considering making a purchase from them. Please think about both domestic websites (retailers based in your country) and websites from another country, and select one answer for each option.
Q20. Listed below are some options for delivery/returns that could be offered by online retailers. For each option, please indicate how important it would be to you for an online retailer to offer this if you were considering making a purchase from them. Please think about both domestic websites (retailers based in your country) and websites from another country, and select one answer for each option.
[PN: RESPONSES ACROSS THE TOP]
Must offer this
Nice to have but not essential
Not important
Don’t know / Not applicable
[PN: OPTIONS DOWN THE SIDE UNDER ‘DOMESTIC’ & ‘ANOTHER COUNTRY’ NETS/HEADINGS. FIX ORDER OF NETS]
DOMESTIC WEBSITES (retailers based in your country) [SHOW HEADER IN LINK] [PN: ROTATE LIST]
Free shipping / free delivery
Express delivery options (e.g. next day, 2-day etc.)
Flexible delivery times (e.g. evening delivery, specified day/time slot)
Free shipping for returns / free postage for returns
WEBSITES FROM ANOTHER COUNTRY [SHOW HEADER IN LINK] [PN: MATCH ORDER OF ‘DOMESTIC’ LIST]
[PN: SINGLE CODE PER ROW]

13. PayPal usage for CB ahead of competition in majority of markets
PayPal usage correlates with markets where eBay provides a good foundation.
Payment method used for cross-border purchases (%) %
North America
Western Europe
Nordics
Central, Eastern Europe
Middle East
Latin America
Asia Pacific
Key competitor is Visa or MasterCard or…
NL = iDeal
AT = Invoicing
CN = Alipay
Which payment cards / methods have you used for online transactions / purchases from websites from another country in the past 12 months?
Base: Online cross border shoppers. Q. Which payment cards / methods have you used for online transactions / purchases from websites from another country in the past 12 months?

14. Reasons for cross border payment method preference (%)
Safety, protection, convenience key to cross border payment method preference
Reasons for cross border payment method preference (%)
Safer way to pay
Purchase protection
More convenient way to pay
Payment is processed quickly
Accepted by most retailers
Don’t have to share my personal / financial details with seller
Well-known, trusted brand
Faster checkout
Not charged commission/transaction fee on overseas purchases
Habit
Better currency conversion rate
Receive rewards/cashback
Base: Cross border shoppers who have used more than one payment method in the past. N=4,670. Multi country average. Q. For what reasons is this your preferred payment method for online transactions/purchases from websites from another country?
Q36c. For what reasons is this your preferred payment method for online transactions/purchases from websites from another country?