While concerns of volatile macroeconomic conditions persist into 2024, there are signs that point to continued growth in global cross-border e-commerce, including for consumers and merchants in Singapore.

In a recent global study conducted by global payments and financial platform Airwallex and strategy consulting firm Edgar, Dunn & Company, 62% of consumers in Singapore plan to ramp up their international online shopping over the next 6 to 12 months, surpassing the global average, which stands at 54%.

The study also found, however, that despite a strong inclination among Singapore consumers towards cross-border e-commerce activities, 79% of consumers from Singapore said they would abandon their cart if their preferred payment method was not offered.

Additionally, close to half of Singaporean consumers are unlikely to return to online stores that do not transparently disclose additional fees like currency conversion and international transaction fees.

As a key player in cross-border payments and financial services, Airwallex has launched this report to better understand the intricacies of cross-border e-commerce, focusing on core markets including Australia, China, Hong Kong, Singapore, the UK, and the US.

The “Cross-Border E-commerce: Key Trends and Strategies for Global Success” report aims to shed light on consumer sentiments, preferences, and the varying dynamics of international e-commerce markets.

While the report focuses on global cross-border trends, the study also uncovered key insights into cross-border e-commerce activities among consumers in Singapore.

Trust is crucial for cross-border e-commerce success among Singapore online shoppers

Compared to other international markets including Australia, the US, and the UK, Singapore consumers have a higher trust towards international merchants, with 65% expressing confidence in their reliability.

Similarly, they also express confidence in the security of their personal and financial information when dealing with these merchants, with 65% indicating trust in their data security.

A similar sentiment is held by Singaporean merchants, with Wine Kin emphasising the importance of trust when selecting a financial and payments partner.

“As a new SME entering the Singapore market, I knew that to compete, I had to offer lower prices and better value while retaining margins and delivering an excellent customer experience.

It’s crucial that our clients can process payments on our website confidently, and we can rely on receiving the payments in a timely and secure manner,”

said Desmond Yeo, Founder of Wine Kin, an online retailer of fine wines, spirits, and sake.

China, US, and Canada top online shopping choices

Global markets hold unique appeal. 35% of Singaporean consumers favour China as their top online shopping destination, followed closely by the US (31%) and Canada (10%).

The primary motivation driving consumers in Singapore to shop online from international merchants lies in the promise of greater product options (33%), closely followed by considerations of product quality (28%) and the ability to access lower prices or better deals (22%).

This is consistent with global findings, which also highlight more options, product quality and lower prices as motivations to shop internationally.

Transparency and multiple payment options are favoured in cross-border e-commerce

Transparency emerges as a key consideration in consumer decision-making globally and in Singapore. Among Singapore consumers, 49% express a reluctance to patronise online stores that obscure additional fees, such as currency conversion and international transaction charges.

When it comes to payment methods, cards dominate both globally and locally. Credit cards are the top choice for 39% of global consumers and 45% of those in Singapore, making them the most frequently used payment method for international online shopping.

Among Singaporean consumers, debit cards (31%) and global digital wallets (16%) are also popular, trailing closely behind credit card use.

Little Blossom, a Singaporean organic baby food brand, recognised the importance of scaling their finance operations efficiently.

“As our business expanded from Singapore to multiple countries in Asia, we had to manage three different providers for corporate cards and payments.

Now, we enjoy the convenience of having just one integrated finance solution with Airwallex, significantly aiding the growth of our retail business,

said Gillian Choo and Yi Jun Kwek, the founders of Little Blossom.

Shipping costs and transparency are top of mind 

Beyond payment methods, shipping policies wield considerable influence, with shipping costs and transparency ranking as top concerns for 45% of consumers in Singapore as they evaluate the shipping policies of international merchants.

Additionally, shipping speed options (22%) and shipping carrier options (12%) were also key considerations for consumers in Singapore during their evaluation of international merchants’ shipping policies.

TikTok ranks highest for cross-border e-commerce

The continued growth of social media platforms has reshaped the retail landscape. In Singapore, 62% of consumers are likely to make online purchases from international merchants through these channels, which is one of the highest percentages among the surveyed markets.

TikTok, used by 25% of Singaporean consumers for international online shopping, is the most popular platform, followed closely by Instagram (23%) and Facebook (22%).

Accessing better deals and offers (52%) on social media platforms (60%), followed by a preference for personal recommendations (47%) and interactive online selling (43%) were the top motivations for Singaporean consumers to buy from international merchants via social media

As e-commerce businesses look to grow and scale internationally, understanding and adapting to consumer habits, recognising the challenges and considerations they take into account when shopping internally are critical to ensure the success of the business.

Airwallex is an end-to-end payments and financial platform designed to empower e-commerce businesses of all shapes and sizes to scale globally.

With Airwallex as a partner, your business can accept payments from overseas customers through a fully localised and optimised checkout, settle multiple currencies into a Global Account without forced currency conversions, and pay international suppliers via high-speed transfers and multi-currency cards.

To learn more about the intricacies of cross-border e-commerce, download Airwallex’s report here. 

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• Source: https://fintechnews.sg/93449/payments/cross-border-ecommerce-airwallex/