A new Internet Retailer survey and report finds that global e-commerce will top $3 trillion this year for the first time. Online retail sales are projected to grow at compound annual growth rate of 20% from 2016-2019, e-commerce reaching nearly $3.5 trillion in 2019.
However, global retail sales are only growing at around 3.5% annually. As a result, e-commerce accounts for a growing portion of retail sales every year. In fact, the online share of the world’s retail sales will have grown from 10.5% in 2016 to 16.4% in 2019. Should current trends continue, global e-commerce will exceed brick-and-mortar retail sales by 2036.
As they gain confidence in online shopping, the world’s consumers are looking beyond their own borders for better quality goods, lower prices, and a broader selection, according to a 2018 survey by online payments firm PayPal of 34,000 consumers in 31 markets.
Already, more than half of online shoppers in the Middle East, Africa, Europe, and Latin America have shopped on websites based outside of their home countries, as have 48% of consumers in the Asia-Pacific region, the PayPal survey shows.
One of the major findings is that despite more consumers shopping internationally, retailers say fraud prevention and currency and payment processing are obstacles to taking advantage of the growing market.
International consumers are increasingly shopping online, with North America’s top 1,000 e-retailers selling $143 billion worth of goods to customers outside the US. Amazon accounted for 44% of those international sales, largely because of its first-mover advantage. But the study found there is opportunity for retailers to gain significant market share by expanding their global efforts.
More than half of online shoppers have already purchased goods outside their country. Despite the opportunity for US online retailers to sell internationally, less than half of them ship outside the country. The survey also found 67% of retailers agree international e-commerce is a critical source of future growth, and 52% concur with the statement that international e-commerce “is suitable for us because we have many international customers and followers of our brand and products.”
The study found that two primary concerns are preventing North American retailers from catering to international shoppers: fraud and the challenge of accepting foreign currencies and payment types. 60% of respondents cited “currency and payment processing” as a top obstacle to international e-commerce. An identical 60% pointed to “fraud prevention.”
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