At a time when cross-border sales are increasingly targeted as a key growth opportunity for online merchants, new cart abandonment statistics show that expansion in fast-growing Asian economies is not an easy task.
Even so, for companies that decide to take the plunge, the inclusion of just one factor – the use of localized payments – proves to be perhaps the biggest determinant between success and failure for businesses. Western companies seeking to develop in the East.
Exploring the question, PYMNTS surveyed 500 business leaders in the US, UK and Canada for “The Emerging APAC Opportunity” study, a collaboration between PYMNTS and Citcon. The results showed that while shipping costs remain the top reason consumers forgo these purchases, payment friction is a close second, turning off potential buyers and causing alarming levels of cart abandonment.
According to the report, 41% of merchants who do not offer localized payment options to their customers in Asia lost 60% or more of their sales due to cart abandonment. Add to that other pain points, and around a third of merchants said shoppers abandon their carts due to unexpected checkout friction, such as being unable to pay for a purchase using their preferred payment method or due to security concerns resulting from unknown payment issues. payment methods and sites.
The results are remarkable, as research found that 17% of merchants in the United States and 16% of those in Canada who are not yet operating in the Asia-Pacific (APAC) region plan to relocate within the next year. , and would therefore be wise to consider the pros and cons of not localizing payments for APAC buyers.
UK businesses are better represented in APAC with 31% already selling there, with UK merchants in the study generating on average 13% of their revenue from cross-border sales originating in APAC. For these merchants, cart abandonment reduces established revenue streams and makes tracking payments even more urgent.
Not providing APAC shoppers with localized payments, such as Rakuten in Japan, WeChat Pay and Alipay in China, and Kakao Pay in South Korea, for example, is costing merchants and sellers alike, with PYMNTS research indicating that cart abandonment is 32% higher for merchants not offering localized payments in a region ripe for e-commerce growth.
“Forty-one percent of merchants who don’t offer localized payment options to APAC shoppers lose 60% or more of their sales to cart abandonment,” the study found. “Among merchants who offer localized payment options to APAC shoppers, only 32% report losing 60% or more of their sales due to cart abandonment.”
Partnership for higher APAC conversions
E-commerce businesses in the US, UK and Canada are beginning to understand the power of localized payments and the benefits it brings. Many associate accordingly.
In addition to local methods preferred by APAC buyers – which PYMNTS also finds when researching other emerging markets from Europe, Middle East and Africa (EMEA) to Latin America – there has obvious advantages when processing payments through platforms that have expertise with localized payments.
“Reliability, high authorization rates and reputation may also influence merchants’ choices of payment providers,” the study says, noting that 49% of merchants “cite reliable payment processing as a determining factor in their choice. payment provider, for example, while 46% cite high authorization rates and 43% cite a strong reputation.All three factors take on increased importance for businesses looking to expand their presence in APAC.”
For these reasons, PYMNTS has found more merchants choosing payment partners that support location with gateway integrations that enable the choice of local payments at checkout.
Data showed that more than half (55%) of merchants selling to APAC consumers select their payment providers based on the range of payment methods they offer, with 62% looking for providers that offer payment processing services reliable in the region.
See also: CITCON CEO sees stronger companies forging in tough times
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