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78.5% Expected To Growth In Cross Border Commerce By 2016: Report

Cross border trade is forecasted to grow in India by 78.5 per cent from 2015 to 2016, according to PayPal and IPSOS research report.

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Cross border trade is forecasted to grow in India by 78.5 per cent from 2015 to 2016, according to PayPal and IPSOS research report.

The research highlights that desktops account for the highest proportion (53 per cent) of purchases made by cross border shoppers from websites in another country in the last 12 months, however the future belongs to mobile for cross border shopping: 41 per cent of the purchases made by cross border shoppers from websites in another country in the last 12 months were made using a smartphone (30 per cent) or tablet (11 per cent).

“PayPal is used as a cross-border payment option by 84 per cent of the cross border shoppers. PayPal’s unique offerings like Buyer Protection and Refunded Returns have helped address some of the barriers like safety and security and return shipping faced by shoppers while transacting cross border, said Vikram Narayan, Country Manager and Managing Director, PayPal India.

High customs duty and high delivery shipping costs are key deterrents: 52 per cent of online shoppers who have not shopped cross border state delivery shipping costs as preventing them from shopping cross-border, and 43 per cent say having to pay customs/fees and or taxes is a barrier.

Other key barriers also include difficult process for returning products (selected by 48 per cent of online shoppers who don’t shop cross-border), having to make payments in foreign currency (44 per cent), return shipping costs (41 per cent) and concerns about identity theft and fraud (41 per cent).

‘Cart abandonment’ is also a key issue on cross border shopping, where consumers abandon their online shopping carts after having chosen their products for purchase. Reasons for cart abandonment –include amongst others preferred payment option not available (selected by 30 per cent of online shoppers who have abandoned an online purchase from a website in another country) , lack of clarity about how much duty, tax, or custom fees would have to be paid (27 per cent ) and concerns about website security (25 per cent) .

Online Spends On The Rise
The research estimates overall online spends inclusive of cross border shopping to touch Rs 7,02,900 crore by 2017

Consumer electronics and entertainment are estimated to be the highest growth categories for online spends in 2016

Total online spend in the consumer electronics category is forecast to grow 48 per cent by 2016 while the total online spend in groceries, food and alcohol category is forecast to grow by 43 per cent in 2016. Health & Beauty (41 per cent growth predicted) as well as travel & transport (40 per cent growth predicted) are also expected to be high growth categories for overall online sales,

Average Online Spends Among Indians
Average spend on cross-border transactions by the estimated 3.8 million cross border shoppers was estimated to be Rs.1.42 lakh per cross-border shopper in 2015.


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e-commerce paypal ipsos survey vikram narayan