Cross-Border eCommerce Sales Poised for Explosive Growth: Visa Study
• International sales are major drivers for Singaporean eCommerce businesses, which accounted for over a third (35 percent) of their revenues
• Ninety-six percent of Singapore business owners agreed that having an international presence is key to their company’s success in five years
• Today, 92 percent of Singapore business owners are prepared to handle international transactions
Online businesses see a world of opportunity for cross-border sales. According to The Visa Global Merchant eCommerce Study (GME Study), eCommerce leaders globally view international expansion and finding new cross-border customers critical to driving growth, particularly heading into the prime holiday shopping period.
While a vast majority of leaders (87 percent) surveyed believe expanding cross-border eCommerce is one of their company’s biggest growth opportunities, almost all Singapore business owners (96 percent) agree that having an international presence is key to their company’s success in the years ahead.
Today, two in three businesses (66 percent) that sell online have international customers. These sales account for nearly a third (31 percent) of those business’ revenues. Even with the significant revenue from cross-border sales, more than half (51 percent) of companies who are selling to international customers need help to optimise their international online sales processes.
In Singapore, almost three in four (72 percent) eCommerce businesses are already engaging in cross-border sales. On average, these sales account for over a third (35 percent) in revenue. Unlike any other countries surveyed, 50 percent of those eCommerce businesses found cultural barriers to be an issue when expanding overseas. The study shows that Singapore business owners feel unsupported in their efforts, with 98 percent in agreement that business solutions tend to favour larger companies.
End of Year Holidays Mean Sales Worldwide
The end of year holiday season makes up more than a quarter of annual revenues for almost all Singapore businesses surveyed (94 percent). This peak period is critical for eCommerce merchants around the world. eCommerce leaders remain bullish about penetrating new markets to remain competitive during this key period.
“In Singapore, eCommerce sales in December last year increased more than 20 percent compared to the year before.1 Cross-border eCommerce contributes close to 25 per cent of total eCommerce spend, likely due to many international merchants holding year-end sales during the festive season,” said Kunal Chatterjee, Visa Country Manager for Singapore & Brunei.
“Cross-border is a major growth opportunity for businesses. However, it is not easy, especially for small businesses. As a global network, Visa wants to ensure that we work with merchants to create frictionless and secure payment experiences for consumers when they shop online,” he added.
The full study, which will be issued in January 2020, dives into merchant attitudes, behaviours and perceptions of cross-border eCommerce for 10 global markets. Additional key findings include:
- Seamless Experience: Whether purchasing goods domestically or internationally, customers want a similar experience. Leaders cite the most important factors: quick delivery (44 percent), easy checkout (41 percent) and convenient payment methods (41 percent).
- New Markets: Two in three (66 percent) of businesses that do not sell cross-border plan to do so in the near future, with 90 percent eyeing the next three years.
- Buckle Up: The international expansion journey can be a daunting venture. A vast majority of those who haven’t expanded internationally (87 percent) haven’t even made attempts to do so. Top challenges cited are accepting and processing foreign transactions (37 percent) and shipping issues (42 percent) as lead barriers.
1 VisaNet data as of December 2018
About Visa Global Merchant eCommerce Study (GME Study) 2019
The Visa Global Merchant eCommerce Study (GME Study) analyzed responses of 1,000 C-level executives or business owners who work at companies with ecommerce capabilities across 10 global markets: Australia, Canada, China/Hong Kong, France, Germany, Mexico, Singapore, Spain, United Kingdom and United States. The Visa GME Study is part of Visa’s continued commitment to helping industry players in their pursuit of developing the cross-border ecommerce ecosystem. The GME Study was conducted in conjunction with research and business intelligence firm Wakefield Research in July/August 2019.
About Visa Inc.
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of digital commerce on any device for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit www.visa.com.sg