UK is number two destination for online shoppers, discovers new PayPal report

UK: second most popular online destination for shoppers

UK: second most popular online destination for shoppers

The UK is the second most popular shopping destination for online shoppers overseas, after the US and ahead of China and Germany, according to an analysis of cross-border online shopping attitudes, behaviours and spend by Nielsen for PayPal.

Britain’s world-beating retail industry has seized the export opportunity created by the online revolution to make the UK the world’s marketplace, researchers found with sales of fashion, technology and home electronics products driving a British online export boom to five key markets across the globe.

Published in the report, Modern Spice Routes (Key export markets), the research maps for the first time corridors of online trade from consumers buying directly from businesses in other parts of the world. The research was based on a survey of 6,000 cross-border shoppers in Australia, Brazil, China, Germany, the UK and the US.

The top global destinations for cross-border online shoppers were unveiled as:

 1.       United States    (favoured by 45% of respondents)

2.       United Kingdom               (37%)

3.       Mainland China                 (26%)

4.       Hong Kong                          (25%)

5.       Canada                                 (18%)

6.       Australia                              (16%)

7.       Germany                             (14%)

The UK’s high ranking will be welcome news at a time when the balance of payments deficit remains high – the 2012 balance of payments figures revealed that the UK ran a current account deficit of £57.7bn.  

According to the Modern Spice Routes report, cross-border online shopping will generate £10.3 billion for the UK in 2013 from consumers in the five overseas markets surveyed (Australia, Brazil, China, Germany and the US). This is forecast to reach £24.4bn in the next five years, suggesting even greater opportunities exist for British businesses prepared to look beyond the domestic market for sales.

The report reveals:

  • The UK is the top destination for American cross-border shoppers, with nearly half (49%) buying £6.4 billion worth of British goods this year. This number is expected to nearly double by 2018 to £12.7billion
  • In China, cross-border shoppers will spend £1.5 billion on British goods this year, but will spend nearly five times as much (£7.2 billion) in 2018
  • In Australia, the UK is the second most popular destination for online shopping, where 47% of those surveyed will spend £794 million on British goods this year, which is forecast to increase to £2 billion by 2018



Cameron McLean, managing director, PayPal UK, said: “In a tough economy it’s great to see the positive effects that online exports are having for British business as a whole. It’s a testament to the pioneering role many UK retailers have played in enabling e-commerce early on, as well as the variety and quality of goods we produce that generates demand from around the world.

“Any business can take advantage of this opportunity, and with PayPal it’s easy to start selling across borders. Our merchants don’t have to worry about all the different payment methods used in different parts of the world as we are the universal adaptor for paying internationally,” Cameron added.

The global view

 The report also revealed the size of the global market for cross-border online shopping across the six major markets researched. Key findings include:

  • Cross-border online shopping will be worth US$105 billion this year, with 94 million consumers regularly buying from overseas websites. By 2018, this will increase nearly 200% to US$307 billion, with 130 million cross-border online shoppers
  • Top purchase categories for cross-border shoppers are: clothes, shoes and accessories (US$12.5 billion); health and beauty products (US$7.6 billion); personal electronics (US$6.0 billion); computer hardware (US$6.0 billion); jewellery, gems and watches (US$5.8 billion); and home electronics (US$5.4 billion)
  • Top reasons for consumers buying online from overseas are: to save money (80%) and “more variety that cannot be found locally” (79%), highlighting an appetite for high-quality, authentic items, as well as discounts

“Cross border trade is nothing new.  Our local stores are filled with goods from around the world. What is new is how easy it has now become for consumers to shop online directly from merchants around the world and the massive opportunity that represents,” said David Marcus, president, PayPal.

“The emergence of these “modern spice routes” is great news for businesses the world over. Our message to merchants is if you are looking for new ways to grow your sales, especially in an economic downturn, start selling directly to 94 million cross-border shoppers in these six markets and own a piece of this $105 billion market.  For consumers, paying for items in a different currency or country has never been easier and we help make it safer with our buyer protection policy available in 193 markets worldwide.”

Growth markets

PayPal’s own data reinforces the report’s findings, indicating that online exports are growing even as the traditional export sector for many economies remains challenging. Cross-border trade today accounts for around a quarter of PayPal’s total payment volume, with new and sometimes surprising online export corridors emerging. For example, PayPal’s own transaction data indicates:

  • The fastest growing online export markets for the UK are Israel (growing 51% from 2011 to 2012), Norway (38%), Australia (37%), Russia (36%) and Canada (35%)
  • Globally, Russia is one of the five hottest export opportunities, growing significantly for businesses in the UK (36%), US (41%), Germany (75%), Australia (67%), China (55%), and Brazil (168%)
  • Israel is also among the fastest growing markets for exporters, growing for the UK (51%), US (34%), Australia (55%), China (73%), and Brazil (77%)

The Modern Spice Routes report is available from