PayU flags major US opportunity for international online merchants

New research from PayU reveals a big opportunity for international merchants to capitalise on US consumer demand not being met domestically.

The company surveyed 1,092 Americans. 48% who have bought online from retailers based abroad in the last year, have done so at least once a month.

Furthermore, 53% have purchased products from China over the past 12 months. Other than China, Americans have purchased products from Europe (33%), Canada (28%), Southeast Asia (21%), and Latin America (21%).

Looking at those who have not shopped online from abroad in the last 12 months, only a quarter of this group said feeling they should support stores located in their own country was a reason for not doing so.

Furthermore, only 30% of those who have not shopped online from retailers based abroad said this was because they could get everything they need from US-based retailers.

A significant barrier to shopping online from abroad amongst 29% of those who had not shopped this way in the past 12 months was high delivery costs (including tax).

For those between the ages of 18-24 who hadn’t shopped online from abroad, the main reasons to not do that were high delivery costs and complicated return processes (23%), while just 6% of people in this age group indicated that they could get everything they need from the local retailers.

Fashion, shoes and bags were the most popular items to purchase for American consumers, with a third having bought or said they considered buying these products from abroad in the last 12 months.

This was followed by electronics (phones, tablets, laptops, computers, including accessories and peripherals) (29%), books (26%), toys, hobby and DIY (25%).

The survey also showed that payment options are a key factor for American consumers when it comes to purchasing from abroad, with 55% saying they would look elsewhere or not make the purchase at all if their preferred method was not available.

Additionally, 73% of respondents noted that they felt safer making purchases online – whether domestic or abroad – if they recognised the brand of the Payment Service Provider, with 36% of those surveyed saying that their knowledge of the Payment Service Provider influences their purchase decision.

The data also showed that when shopping online with retailers based abroad, the appetite for using buy now pay later is relatively weak in the US market, with only one in ten Americans who had bought from abroad in the past 12 months using the option.

This compared to 55% of those surveyed who noted that they used credit cards most often.

Mario Shiliashki, PayU’s CEO of Global Payments, says: “It is clear that the trend for shopping internationally is accelerating, even in well served markets like the US.”

“This growing trend represents an ever more attractive opportunity for retailers to boost their growth by extending their business outside their home countries.”

“To capitalise on this opportunity, it is important that merchants have the right technology partners to navigate the complex payments and logistics landscape in order to provide the best consumer shopping experience locally - one critical aspect of that is to optimise their ability to offer the most relevant payment methods in every market they expand to.”

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