• More overseas shoppers have bought from UK online businesses than any other European country
• Department for International Trade calls the report ‘great news for Britain’
• British companies urged to seize the opportunity and sell overseas to reap the rewards of a global marketplace
• Case study available: UK start-up Castore has seen rapid growth in 2 years thanks to high international demand

More overseas shoppers are buying online from UK businesses than any other nation in Europe, with British goods in high demand among foreign shoppers, new research conducted by Ipsos for PayPal has revealed.

The global study found that 1 in 7 (14%) of global online shoppers have bought goods from the UK in the past 12 months.[i]

The next popular destination in Europe is Germany, with 1 in 10 (10%) global online shoppers buying from this country.

Europe’s top 5 online exporters are:

1. UK
2. Germany
3. France
4. Italy
5. Netherlands

 Which nations are buying British?

The fourth-annual Global Cross-Border Commerce report, conducted by Ipsos on behalf of PayPal, interviewed 34,000 people across 31 countries and reveals the importance of American consumers to British businesses.

The US is the largest export market for UK online businesses. Shoppers from the US bought an estimated £12.5 billion worth of goods from the UK in the past 12 months – more than any previous year.

China has been identified as another key market for UK online businesses, buying an estimated £5.7 billion worth of products in the past 12 months.

The new research also reveals the importance of European markets to British exports, with cross-border shoppers in France, Greece, Ireland, Italy, Norway, Spain and Sweden all choosing the UK as one of the ‘top 3’ countries to buy from. 

Why are shoppers browsing abroad?

The main reason why shoppers buy from foreign countries is to seek a bargain, with 7 in 10 (72%) respondents who shop cross-border indicating that they buy from other countries because of cheaper prices.

The fall in the pound following the EU referendum, PayPal’s data suggests that this has made UK goods even more attractive.

Other reasons why consumers shop online internationally rather than in their own country include:

• Because certain products are not available in their own country (49%)
• To discover new and interesting products (34%)
• Because product quality is higher from overseas (29%)
• Because shipping costs are affordable (24%)

 What are global shoppers buying?

Globally, clothing is the most popular category for cross-border purchases, with 7 in 10 (68%) of online cross-border shoppers buying clothes from other countries in the past year. Other popular products include:

• Consumer electronics (53%)
• Toys and hobbies (53%)
• Jewellery and watches (51%)
• Cosmetics and beauty products (46%)

 How are people shopping?

The majority of online purchases are still made via desktop or laptop – but smartphone shopping is fast catching up.

Across Europe and the US, the proportion of smartphone purchases has almost doubled since 2016, with the UK’s top export markets of US and China frequently shopping on their mobiles.

In the US, 61% of cross-border shoppers have made an online purchase in the past 12 months via smartphone, whilst in China this figure is 84% – the highest of all markets surveyed.

Nicola Longfield, Director of Small Business at PayPal UK, said: “As growth in the UK economy remains modest, it’s time for all British businesses to open their doors to the international shopper.

“International shopping is increasing at a rapid pace, and this study highlights the small adjustments that businesses can make to capture more global sales. If you set a border around your business, you are simply putting a limit on your sales.

“Shoppers from Austria to Australia, Belgium to Brazil have all bought from UK online businesses in the past 12 months. With the UK punching above its weight and leading Europe when it comes to global ecommerce, we hope that other businesses are encouraged to sell their products online and overseas.”

PayPal has been helping to enable British businesses to sell overseas for 15 years in over 200 markets and 25 currencies.

Baroness Fairhead, Minister of State for the Department for International Trade, said:

 “PayPal’s global study is great news for Britain – a clear sign of the strong demand for our goods and the success that UK retailers are already having online.

“To build on this achievement, the Department for International Trade is making it easier and cheaper for UK firms to sell online to customers around the world – with face-to face support from our eCommerce Advisers, negotiated preferred rates on online marketplaces and information via great.gov.uk.

“Our recently published Export Strategy sets out our ambition to grow exports as a percentage of GDP to 35%, and getting more UK firms to sell online is key to achieving this.” 

 Castore: a cross-border case study

Castore, a premium sportswear brand, was created in Liverpool by brothers Tom and Phil Beahon in 2016. Thanks to strong exports, the start-up has rapidly expanded over the past two years.

Castore has forecast that its sales will rise to £2.7m this year, up from £750,000 in 2017. More than half of its total sales in the past three months has come from North America and Asia. 

Tom Beahon, co-founder of Castore, said: “The speed and ease of online buying and selling has changed the retail game. It’s meant that UK start-ups have been able to quickly grow and thrive on a global scale.”

PayPal’s report suggests that the future is bright for UK companies, with 2 in 5 (42%) of global online shoppers saying that their spend would increase over the next 12 months. 

Barriers for consumers who shop online

A quarter of global cross-border shoppers (25%) cited shipping costs as the top barrier to buying from international websites; whilst half of online shoppers said that they would not feel comfortable buying from a foreign website in a different language (57%) or paying in foreign currency (47%).

To help UK online businesses tap into lucrative foreign markets, PayPal covers the cost of returning unwanted goods for international shoppers in more than 40 overseas markets including Australia, USA, France and Spain. Return Shipping on Us gives customers who pay with PayPal the option to receive a refund for the cost of return shipping to the UK on eligible purchases, with the value and frequency of claims varying per market. Limitations apply.

PayPal’s Global Sellers programme also allows UK businesses to translate, localise and launch their online web store in over 60 countries, making their products more attractive to international audiences.

If you are looking for specific insights by country, all of the data has been uploaded to the PayPal PassPort site.

[i]Source of all statistics included in this document unless otherwise indicated: PayPal Cross-Border Consumer Research 2018 conducted by Ipsos.