PayPal Cross-Border Merchant Research 2016

New research from PayPal reveals that just over half (56%) of the UK’s online small businesses are selling to customers abroad.

The survey, conducted by Ipsos MORI on behalf of PayPal, questioned more than 1,200 small and medium-sized businesses in major online retail markets – including the UK, the US, France, Germany, Italy and Spain – to find out about their international sales strategies. The results show that more online businesses in France (64%) and Spain (61%) have capitalised on international sales than in the UK.

The demand for UK goods

This news comes despite an earlier PayPal study suggesting that there is higher consumer demand for British goods over goods from any other major European market. An estimated 86.4 million online shoppers from 29 countries bought from the UK in the last 12 months.

What’s stopping you selling overseas?

A quarter of businesses (25%) cited shipping and the associated costs as the top barrier to selling abroad while customs and duties (20%) were the second most cited concern. Conversely, the single most attractive driver for shoppers buying from overseas3 is free delivery.

To help UK online businesses tap into lucrative foreign markets, PayPal covers the cost of returning unwanted goods for international shoppers in 25 overseas markets including Australia, the US, France and Spain. The service gives customers who pay with PayPal the option to claim back the cost of return shipping to the UK, with the value and frequency of claims varying per market.

Where do we export?

According to the survey respondents, international online sales among UK small businesses are currently dominated by customers closer to home with combined sales to European countries accounting for 61% of total cross-border sales value. North America is named as the UK’s second largest market generating 20% of UK online sales, and Asia comes third with 6% of international sales.

Demand from China

While UK online businesses identified Asia as only the third largest international sales market, results from an earlier consumer survey show that among 29 countries surveyed, demand for British goods is highest among Chinese customers. An estimated 21.9 million online shoppers in China bought from UK retailers in 2015.

Yet despite this boom, only 15% of the UK’s online businesses surveyed currently sell to Chinese shoppers, and among those who do sell internationally, just 5% list Yuan as a currency option for payment.

Simon Moran, Senior Director of Strategic Client Services, PayPal UK, says: “The UK is more popular than ever as a destination for online shoppers worldwide and 2015 proved to be a real tipping point. With more than 179 million active customer accounts around the world, PayPal is in a unique position to help British online businesses reach a global customer base. Simple changes to your online store such as accepting multiple currencies, offering different languages, and keeping shipping costs low can have an immediate impact on sales”.

You can read the full PayPal Cross-Border Merchant Research 2016 report on the Ipsos Mori website.