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Social media, digital payments fuel cross-border e-commerce surge
Facebook and TikTok are top channels for purchases as consumer confidence in personal data security and international merchants grows
The Asset 21 Mar 2024

Despite macroeconomic uncertainties, 54% of consumers surveyed from selected key markets expect to buy more frequently from overseas merchants in the next six to 12 months, highlighting the growing popularity of cross-border e-commerce, a new report finds.

The influence of social media, the convenience of digital payment methods, and the sheer variety of competitively priced, quality products offered by overseas merchants are all factors that have contributed to a steep rise in cross-border purchasing, Singapore-based financial technology company Airwallex says in its inaugural report on global e-commerce.

In particular, this rising trend in cross-border online spending is driven by consumers’ confidence in personal data security and international merchants. According to the report, 61% of consumers perceive international merchants to be trustworthy, and 65% feel assured of the security of their personal and financial information when buying from international merchants.

Globally, the United States (36%) and China (25%) stand out as the top regions for consumers’ international shopping. About 72% of consumers from China rank the US and Canada as the top markets for their international shopping, while China is the top market where consumers from the US (41%) Singapore (35%), and the United Kingdom (35%) do their cross-border shopping.

Most popular social media channels for cross-border purchases

Source: Airwallex 

Merchants are increasingly leveraging social media platforms to create interactive and creative content, engaging with and increasing purchases among digitally-native consumers.

According to the report, 59% of consumers will likely make online purchases from international merchants through social media platforms.

Accessing better deals and offers on social media platforms (49%) is the top global motivation for consumers to buy from international merchants, followed by personal recommendations (42%) and interactive online selling (38%).

On average, consumers use Facebook the most (28%) to make online international purchases, followed by TikTok (22%) and Instagram (20%).

“E-commerce is more global than ever,” says Kai Wu, chief revenue officer at Airwallex. “Despite ongoing economic uncertainty and slowing global growth, it is clear that consumer spending will continue to grow. With the global cross-border e-commerce market set to reach US$7.9 trillion by 2030, it is critical for international merchants to solve consumer pain points and deliver the best possible customer experience in order to thrive in this competitive market.”

Payment methods

The rise of digital payment methods is a key reason consumers now feel more comfortable buying goods and services from anywhere in the world, Airwallex says as it underscores the importance of flexibility and transparency in the payment and shipping process.

When shopping with international merchants, 77% of survey consumers would likely abandon their cart if their preferred payment method is not available, according to the report.  Additionally, 54% are unlikely to return to online stores that do not transparently disclose additional fees like currency conversion and international transaction fees.

Credit cards (39%) are still the most frequently used payment method among cross-border onlne shoppers, followed by global digital wallets (26%).

Shipping costs and transparency are ranked as the most important factors when evaluating the shipping policy of an international merchant (41%), while lengthy refund processing times represent the most prominent challenge for consumers (47%).

Greater options

According to Airwallex, understanding the diverse considerations and preferences of consumers across regions is key for businesses seeking success in the global marketplace. The survey finds that 34% of consumers consider greater product options as the primary incentive for shopping internationally, closely followed by the desire for better quality products and lower prices.

Lower prices emerge as a significant driver for international shopping in the UK, the US, and Australia, whereas greater product availability and superior product quality are identified as key factors in China, Singapore, and Hong Kong.

The Airwallex report was undertaken by consulting firm Edgar, Dunn & Company in Q1 2024. It was based on a survey of 3,010 consumers in Australia, China, Hong Kong, Singapore, the UK and US, and interviews with leading merchants, as well as secondary research.

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