E-commerce is going mobile and innovative technology is giving consumers around the world unprecedented access to products, according to a new study from Nielsen.
Consumers are no longer limited to the product selection at their local store or even in their own country, researchers found.
More than half - 57% - of online respondents in Nielsen’s Global Connected Commerce Survey have made an online purchase in the past six months from an overseas online retailer; while 74% of Indian respondents who shopped online in the past six months did. This trend extends beyond the developing world, Nielsen discovered. Roughly two-thirds of Western European respondents said they have purchased goods from an overseas retailer, including 79% in Italy — the highest percentage in the study — and 73% in Germany.
“Retail has been one of the last globalization holdouts, but technology is giving consumers access to a world of products that were previously unavailable,” said Nielsen president of global retail Patrick Dodd. “Choice is greatly enhanced by cross-border e-commerce. In many developing markets, the growing middle class is trading up and demanding greater assortment not found at their domestic retailer. Consequently, these consumers are looking overseas to purchase authentic foreign brands, often at lower prices than they can find in their home country. Meanwhile, developed-market consumers gain access to a range of goods directly from foreign companies at often significant discounts to what they would pay domestically.”
The mobile innovations fuelling this trend vary by geography, the study showed. It polled 13,000 respondents in 26 countries and found the opportunities for retailers to serve new customers in new ways are growing at a rapid pace and consumers are responding.
E-commerce goes mobile
Many regions still face significant infrastructure challenges, including low internet penetration, high access costs and unreliable connections. That's a challenge that some innovative e-tailers are solving by offering fast-loading mobile apps and sites, said Nielsen. Thirty-two per cent of online survey respondents say their internet connection is not stable enough to make them comfortable buying online (even in the UK, this stands at 23%). In these markets, mobile devices have been critical to e-commerce growth, bringing many new and underserved customers online — and their importance will only continue to grow, Nielsen predicts.
India is one country leading the mobile trend and a few online retailers in India have shifted from a mobile-first to a mobile-only strategy. But the shift toward mobile shopping is not just happening in emerging markets, researchers found. In the U.S.,
“As more consumers turn to mobile devices to shop, a coherent mobile strategy should be a key innovation pillar for retailers,” said Dodd. “The most successful strategies will be those that optimise and differentiate their mobile experience and improve the integration of their in-store and mobile services specific to the realities in each market.”
Shift in payment practices
As technology and the retail landscape rapidly evolve, payment practices are also changing, Nielsen’s study showed. More than half (53%) of respondents globally who say they shopped online during the past six months paid with a traditional credit card (52% in the UK), but 43% used a digital payment system such as
UK respondents are also much more likely to use a debit card (70%) than the global average (39%).
The use of digital payment systems in China is extremely popular: 86% of Chinese respondents say they paid for some online purchases during the past six months via digital payment systems. This is also the most widely cited option by Western European survey respondents (56%), particularly in Germany (68%).
In India, direct debit and debit cards are common payment methods (61% and 71%, respectively) for online shoppers, but cash on delivery is the most widely used option, cited by 83% of online Indian respondents, Nielsen reported. In India, the popularity of cash on delivery is driven by a few factors. There is a sizeable group of unbanked consumers in the country, credit card penetration is relatively low, and many consumers with credit cards have security concerns.
“India illustrates that the growth of online shopping isn’t dependent on credit card penetration and development,” said Dodd. “Shoppers prioritise security above all else, and retailers need to collaborate with banks to ensure they’re providing secure and trusted ways to transact online.”
Cash on delivery is a popular e-commerce trend in many other developing markets, including Nigeria (76%), the Philippines (73%), Russia (70%), United Arab Emirates (68%), Saudi Arabia (59%), Colombia (57%) and Thailand (56%). In the UK, meanwhile, usage stands at just 16%.
