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A PayPal and Ipsos report reveals that 35 per cent of Chinese online shoppers purchased from across the border, a practice known as ‘haitao’

Online payment systems provider PayPal and global market research company Ipsos recently launched their second annual global cross-border survey and it reveals the prominent role of cross-border online shopping in China.

A practice commonly known as ‘haitao’, the research saw an increase in the number of Chinese online shoppers who looked for goods overseas (35 per cent as compared with 2014’s number of 26 per cent).

“Safety, convenience and authenticity remain the top drivers for Chinese haitao consumers,” said a written statement accompanying the research.

The top two motivations for cross-border purchases in 2015 were payment safety (49 per cent) and proof of product authenticity (45 per cent), followed by the availability of Chinese language customer support (40 per cent) and favourable buyer protection (35 per cent).

The report also divulged that Chinese haitao shoppers are among the most mobile savvy in the world, with 41 per cent of their cross-border online shopping done via mobile.

e27 compiled key findings from the research below:

Also Read: Over a third of total online transactions processed via mobile: Report

Where did you get that from?

The top three countries where Chinese haitao shoppers bought their purchase were the United States, Japan, and South Korea. In 2014, only 14 per cent of shoppers purchased from US-based sites, but this number rose to 22 per cent in 2015. Meanwhile, for South Korea and Japan, the number has increased steadily at a rate of 10 per cent every year.

The report cited ‘greater variety of authentic, high quality products at better prices’ and ‘discovering new and interesting products that are not available domestically’ as the primary reasons why these particular countries are popular.

But before that, how did these shoppers find the right site in which to shop? The answers are familiarity and deals.

In 2015, the majority of shoppers went directly to sites they have either used previously or had familiarity with the web address (47 and 45 per cent respectively).

Meanwhile, 43 per cent of them looked for foreign sites when they know that there will be promotions — such as on Black Friday or Single’s Day.

Also Read: China is the biggest online spender in APAC: PayPal report

Abandoning the shopping cart

Clothing and footwear were the most popular products Chinese haitao shoppers bought in 2015 at 59 per cent, and this number grew steadily at a rate of 14 per cent every year. Following closely were cosmetic and beauty products at 57 per cent.

Food and drink products trailed at 42 per cent.

Despite the popularity of haitao, shoppers still faced several barriers that prevented them from buying more, or hindered them from completing purchases.

Over a third of shoppers claimed their top concerns about shopping overseas were counterfeited goods (38 per cent), difficult return process (37 per cent), and not receiving sufficient help should they have encountered a problem (35 per cent).

Chinese haitao shoppers are also concerned about cost and delivery. High shipping charges (27 per cent) and long delivery time (26 per cent) are the top reasons why shoppers abandoned their online shopping carts in 2015, followed by unclear duty, tax, or customs fees, as well as high cost of returns.

Haitao shoppers are becoming ever more common in China, and according to the PayPal report, it is time for global merchants to adjust.

Image Credit: Joshua Earle on Unsplash.com

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