If we thought that Singapore’s online stores cater only to the Southeast Asian market, PayPal’s Cross Border Trade Insights 2013 report, released yesterday, is an eye-opener. It’s not Indonesia or Malaysia, which anyone would presume. The largest online export market for Singapore is USA, followed by Australia and United Kingdom. In fourth place is China and fifth is Germany.
The report is based on payments done through PayPal by its 500,000 active members (sellers and buyers) in Singapore.
Local PayPal merchants’ exports to the United States and Europe grew by 26 per cent and 48 per cent respectively in terms of volumes. The payment solutions provider company did not reveal the growth in value terms.
China: The future export market
Meanwhile, China and Hong Kong have emerged as the two fastest growing corridors with a 158 per cent and 85 per cent year-on-year growth in transactions respectively.
PayPal attributes the aggressive demand from Greater China to a fast-growing and connected middle class with a strong appetite for online purchases. eMarketer projects that more than 44 per cent of the world’s digital buyers will reside in Asia Pacific, nearly two and a half times the size of that in Western Europe, which will have the second-largest number of digital buyers.
“The international demand we are seeing is a clear signal to businesses in Singapore to look for new ways to grow their sales by expanding across borders. This is especially so for SMEs who form the backbone of our economy,” said Lawrence Chan, Vice President of Asia Pacific Merchant Services and General Manager of Southeast Asia and India, PayPal.
PayPal claims to have over 143 million active users in 193 markets worldwide. Asia Pacific has over 10 million active PayPal accounts, and Southeast Asia has over 1.5 million active accounts. It also claims to have processed a total payment volume of US$180 billion in 2013, a 24 per cent increase from the previous year. Cross-border trade accounted to approximately 25 per cent of PayPal’s total payment volume last year.
Chan adds, “It has never been easier for consumers to shop online directly from merchants around the world. Coupled with the new government initiatives to help SMEs internationalise, there is no better time to ride the e-commerce wave and tap into a very lucrative global revenue channel.”
What’s being exported?
Travel services is the No 1 cross-border transactional category. It saw a 60 per cent YOY growth in 2013. The No 2 and No 3 spot spot are taken by software and fashion, which saw a 78 per cent and 85 per cent growth respectively. The growth figures for fashion, make it the fifth most fastest growing category. However, it’s ‘group buying’ which grew the fastest in 2013, clocking a growth of 130 per cent.
Online luxury store Reebonz, which uses PayPal as one of its payment gateways, claims that 50 per cent of its transactions come from international customers. Sharanjit Kaur, Global Marketing, Reebonz, who is concerned about online fraudulent transactions, said that the Seller Protection Policy introduced by PayPal last year in September for the APAC region, reduces the company’s risk “keeping our transactions safe”. The policy covers merchants against chargebacks for items that aren’t received, and for unauthorised payments and payment reversals for items paid for using PayPal.
Focus on mobile
PayPal also claims to be the leader in transactions done through the mobile. Chan said that it enabled US$27 billion worth of global mobile payment volume in 2013, up from US$14 billion in 2012. He also said that 15 per cent of the total payment volume on PayPal comes from mobile.
PayPal has collaborated with Samsung to provide fingerprint sign-ins and authentication into PayPal to make transactions faster. Samsung Galaxy S5 will be the first device to carry the biometric authentication feature.
Considering that the future of e-commerce is on the mobile, Chan says that PayPal has a programme for SMEs to make their websites mobile-ready within “seven minutes”. Having said that, he reiterated that the company wants to “play in the commerce field and not just in the e-commerce field”.
He said that sellers who make their websites mobile-friendly see “two to three times growth in transactions”. Chan feels that SMEs have an edge over big sellers when it comes to “mobilising the websites” considering the technology being used. Big sellers who have been there for some time have huge content to be mobilised and infrastructure too needs to be upgraded.
For those who want to have a peek into the summary of the PayPal Cross Border Trade Insights 2013 Report, here’s a summary: