China Passes U.S. as Most Popular Cross-Border E-Commerce Destination: Report

China passed the U.S. as the largest e-commerce market by sales in 2013, but this year it also eclipsed America as the most popular cross-border shopping destination, according to a survey of global consumers conducted for PayPal by market research firm Ipsos. More than 20 percent of all online shoppers polled in PayPal’s 3rd annual cross-border commerce report said they have shopped on Chinese Websites in the past 12 months compared with 17 percent for U.S. Websites and 13 percent who identified U.K.-based sites. The most important factor driving consumers to shop at e-commerce sites in a different country is price, the report said. Seventy-six percent of respondents cited lower prices as a reason they shop cross border while 65 percent identified product availability. The report found free shipping and security were the top reasons (46 percent and 44 percent respectively) that would make consumers who don’t shop online internationally more likely to.

“The distinction between these insights is important for merchants—to retain a current cross-border shopper, better pricing is key,” said Melissa O’Malley, director of global initiatives at PayPal. “But to motivate a shopper who may have never shopped cross-border before, free shipping and a secure way to pay are paramount in converting them.”

When choosing payment methods in a cross-border transaction, more consumers cited “secure way to pay” (53 percent) as a reason for their choice than any other. Convenience (44 percent), acceptance (41 percent) and how rapidly the payment is processed (37 percent) were all less important to those polled than security, according to the report.