PayPal insights 2015 rus_report

© 2015 PayPal Inc. All rights reserved. Confidential and proprietary.

PayPal Cross-Border Consumer Research 2015 Russia Report PayPal Cross Border contacts: Melissa O’Malley, Astrid Huijssoon, Ritesh Arora

PayPal Market Research Contact: Daniel Jenkinson

Ipsos MORI Contacts: Eleanor Pettit & Peter Attwell


Background & Objectives

Understanding that we are going through a commerce revolution, PayPal in partnership with Ipsos, conducted a global 29 market survey with approximately 23,000 consumers to examine how people shop online and across borders.

Advancement of technology is helping to open up commerce opportunities for everyone - across borders, anywhere, anytime and via any device.

This survey is designed to gain insight into 3 main areas: • How online commerce, and specifically cross-border commerce is evolving • How and why consumers shop online across borders • How consumers pay for cross-border transactions


Research Methodology This study was conducted across 29 markets and approx. 23,000 consumers globally.

3

Screening

Transaction & Spend: Past 12 Months & Next 12 Months

Cross-Border transactions &

spend

Cross-Border Payment

Online survey

Global Fieldwork conducted Sept-Oct 2015 Russia fieldwork 29th Sept – 13th Oct 2015

20 minute questionnaire

Respondents recruited from online panels

Own and/or use an Internet-enabled device*

Nationally representative of online population Aged 18+

Fieldwork Sample, per market

Questionnaire

This research was carried out to the international quality standard for market research, ISO 20252:2012

Data weighted to adjust for known population incidence

29 markets

Sample of 800 per market.

Drivers, barriers and attitudes to cross-border shopping

*Desktop computer/Laptop/ notebook computer/Tablet /Smartphone/Some other type of mobile phone/Electronic

organizer / PDA with wireless voice and data features/Games console with Internet connectivity (e.g. Wii) /Smart TV


RUSSIA FINDINGS

4


Domestic and cross-border online shopping behaviour

5

73% Shopped Online in Past 12 Months Base: Internet users n= 801

80% of Online Shoppers Shopped

Cross-Border in Past 12 Months

38%

9%

19%

34%

Domestic Only Shoppers

Cross-Border Shoppers Proportion of online spend cross-border:

1-10%

11-50%

Mix of Domestic and Cross-Border Shoppers

51-100%

38% only shop domestically 54% shop both domestically and cross-border 8% only shop cross-border

Among online shoppers:

Q27. Thinking about shopping online, from which of the following country or geographies’ websites have you purchased in the past 12 months? Please include your home country if applicable.Base: Online shoppers n=584

Q36d In the past 12 months, how much do you think you have spent on websites from other countries? .Base: Online shoppers n=584

62% shopped cross-border in 2015 vs 58% in 2014 Change in cross border aware shopping since

2014: +4 ppts


Automotive

Baby/children’s supplies

Toys and hobbies

Collectibles, memorabilia and art

Clothing/apparel, footwear and accessories

Jewellery/watches

Consumer electronics

Cosmetics/beauty products

Health products

Entertainment/education (digital)

Entertainment/education (physical items)

Garden, tools, and home improvement

Household appliances, goods and furniture

Groceries, food, drink and alcohol

Sports and outdoors equipment

Tickets (event & sport tickets)

Travel and transportation

Other

Cross-border purchase categories

6

20

11

35

7

57

17

39

24

9

16

13

11

21

8

13

10

13

11

Incidence of Categories for Cross-Border Shopping (%)

Q28. In the past 12 months what kinds of products have you purchased from websites in other countries? Base: Cross-Border shoppers n = 362

Incidence of Categories for Shopping Online

(%) 23

15

36

10

50

16

40

33

15

32

24

17

33

17

18

32

30

19

Q6. Thinking about each of the categories below, please estimate your total spend in each category over the past 12 months: Base: Online Shoppers n = 584


Ways of accessing websites in other countries

7

Q35. Which of the following best describe how you access online stores in other countries Base: Cross Border shoppers n = 362

62

48

41

27

20

16

13

13

10

8

7

Go directly to websites I have used in the past

Go directly to websites I know the web address for

I go to sites recommended by friends/family

When I search for particular brands or products on a search engine, sometimes this leads me to foreign sites

I look on foreign sites when I know there will be promotions

I follow links from shopping comparison sites

I Search for online stores in countries where the exchange rate is most beneficial to me

I go to sites recommended or shown as links on social media sites

I click on online banners/ advertisements

I click on advertisements or company pages on social media

Look for websites in the country I want an item shipped to

Ways of accessing Online stores in other countries (%)


Attitudes to shopping cross-border

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It is not important to me if the online retailer is based overseas or not

It does not matter to me where the items are shipped from, as long as the total price is good

I prefer large ‘global’ stores (e.g. Amazon) when purchasing from another country

Sometimes it is not clear whether I am shopping on a domestic or international online store

I am generally comfortable buying from an online store in another country

I trust online stores from other countries as much as stores from the country I live in

I have in the past made purchases on websites not in my own language

I would not feel comfortable making purchases from a foreign website that is not in my own language

Q34b. To what extent do you agree or disagree with each of the following statements? Base: Online shoppers n = 584

50

71

54

29

61

47

43

66

34

22

21

54

14

31

47

22

15

7

25

17

25

22

10

12

% Agree % Disagree % Don’t Know


China Base = 270

USA Base = 71*

Germany Base = 30**

Better prices

Favourable exchange rate

Higher product quality

Trust in product authenticity

Access to items not available in my own country

Better customer service

Website/customer support is available in my preferred language

I can discover new and interesting products

Online stores in this country are more trustworthy

More variety/availability of products/styles

Returns policies are generally better

Shipping is more affordable

Faster delivery speed

I can use my preferred payment method

I can access special deals in this country

Reputation of online store

Reasons for shopping from top import markets

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Q34c. You say you have made purchases online from the “country”/”countries” shown at the top of the “column”/”columns” on the right. Please select your main reasons for shopping on websites from this/these “country”/”countries” rather than the country where you live Base: Cross Border shoppers spending in each country Caution: *Small base **Very small base

87

23

12

8

58

20

37

60

17

57

32

64

22

47

23

41

45

17

58

60

64

36

37

51

39

46

33

15

21

42

37

58

43

31

69

54

54

43

34

43

54

37

31

20

37

37

20

60


58

56

48

47

44

43

41

39

39

37

Free shipping

Safe way to pay

Website available in my language or translation available

Can find items which are hard-to-find locally

Lower overall cost to buy items from another country

Customer support in my language

Costs shown/payment possible in your local currency

Offer delivery tracking/notifications

Wider product selection

Lower shipping costs

General drivers for cross-border shopping

10

Top 10 Potential Drivers for Cross-Border Shopping (%)

Q39. Which, if any, of the following would make you more likely to buy from a website from another country? Base: Online shoppers n = 584


47

42

42

40

44

34

28

33

31

30

28

50

50

45

44

43

38

38

35

35

34

34

Concern that the item I receive would not be as described

Concern that I may not receive the item

Delivery shipping costs

Difficult process for returning products

Delivery time not fast enough

Concerns about counterfeit goods

It is not clear how much duties/customs fees/taxes I will have to pay

Currency conversion rate not favourable

May not receive sufficient help if I encounter problems

Concern about identity theft / fraud

Different language of websites, product descriptions and customer support

36

32

27

26

20

16

16

15

15

14

Shipping / postage charges were too high

Wanted to look for a better price

Delivery time was too long

Checkout process was confusing

Preferred payment option was not available

The checkout process was not in my language

Experienced technical difficulties

Item was no longer available at checkout

Currency conversion rate was poor

Was not clear how much duty, tax, or custom fees I would have to pay

Cross-border barriers & purchase abandonment

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Q36. Which, if any, of the following reasons prevent you purchasing from websites in another country (more often)? Base: Online shoppers

% of those who shop cross-border

% of those who do not shop cross-border

Top 10 Barriers to Cross-Border Shopping

(Base = 222)

(Base = 362)

Top 10 Reasons for abandoning cross-border purchases

Q38. Which of the following have been reasons for you to abandon an online purchase from a website in another country? Base: Online shoppers who have abandoned an online cross-border purchase (n = 337)


Freight forwarding

12

Q42. Have you ever done any of the following when buying products online from other countries? Base: Cross-border shoppers (n =362)

Q43. What were your reasons for delivering to an address in the country of purchase/using a freight forwarding company? Base: Cross-border shoppers who have used freight forwarding (n = 137)

31% of cross-border shoppers have used a forwarding address (e.g. family or friends)

9% of cross-border shoppers have used a freight forwarding company

Reasons for freight forwarding (%)

37

27

22

17

17

8

1

It was cheaper than using the store's international delivery

The online store I was purchasing from did not ship to my country

To combine purchases from multiple stores into a single shipment

To avoid or reduce income duties/tax or other fees

Because the purchase was a gift for a person I sent it to

Because I was travelling in the country at the time

Other


Using different currencies for cross-border transactions

13

I would prefer to have the option of paying either in local currency or my own currency

I check currency conversion rates before making purchases in foreign currencies

I would not feel comfortable making purchases online in a foreign currency

I have in the past made purchases online paid in a foreign currency

My bank charges me for making payments in foreign currencies

PayPal charges me for making payments in foreign currencies

The fees charged by PayPal when shopping online from other countries are generally lower than the fees that would be charged if I used other payment methods

77

63

57

42

37

25

23

10

20

28

46

27

17

15

13

17

15

12

36

57

62

% Agree % Disagree % Don’t Know

Q47. Please state whether you agree or disagree with each of the following statements about shopping online in other countries: Base: Online shoppers (n = 584)


Appendix A: Guidelines for News Releases

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Guidelines for News Releases (1/2) - Citing IPSOS We are duty bound to protect both our client's and our own credibility and reputation by ensuring that our surveys are accurate, balanced, not biased and that our findings are reported objectively and accurately.

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Ipsos MORI should always appear correctly capitalised, and without a hyphen never as Ipsos Mori or Ipsos-MORI; Please insure any finding or documentation (such as toplines) released to clients or the press carries the Ipsos MORI logo — everything should be clearly branded Ipsos MORI (preferably on every page – need not be the logo, just the name); Although this process is called Polls for Publication, the words 'poll' or 'polling' should not be used. Use words such as research or survey: for instance, 'an Ipsos MORI survey' or 'the Ipsos MORI research shows, reveals, shows, says demonstrates, indicates, illustrates, explains', etc.; The media release must clearly differentiate between what are Ipsos MORI survey findings and what are not , and which text is based on Ipsos MORI findings and which is not;

Please ensure that figures are described correctly. For instance, if the figures relate to a sub-sample of those who 'ever use a mobile phone', this must be clear in the text. It would be wrong to state "75% send at least 15 text messages a day" as this implies it is 75% of British adults – which is incorrect. It should say ‘75% of those who ever use a mobile phone say they send at least 15 text messages a day’;

Watch out for a common error when describing changes in % findings over time. For instance, a shift from 40% to 60% is not ‘an increase of 20%’. It is an increase of 50% (the difference, 20, divided by 40), and we usually describe it as ‘an increase of 20 percentage points’;


Guidelines for News Releases (2/2) – Citing IPSOS

References to Ipsos MORI data should be clarified using the actual survey results . For instance, simply stating 'most people feel they are not getting value for money' does not clearly reflect the research findings. Instead, the text should be 'two-thirds of the British public (67%) feel they are not getting value for money'; If charts or graphs are being used, all should have: Heading, full question wording, fieldwork dates, 'Source Ipsos MORI' in a bottom corner and the base size must be noted for each different audience being reported upon (either full or for sub-sample groupings being reported upon). Never “Base All” or “Base all asked”; Please insure that the text used in a news release does not subtly or significantly alter the question wording, or précis the question, so much so that the meaning changes. The exact words of the question should be reported in full.

Regional press releases are popular, but often the sample sizes involved (such as in Wales) are too small to justify separate analysis and reporting (i.e. are not statistically reliable). As a guideline, to report the percentage results based on any sub-sample, the (un-weighted) sample size should be at least 100; between bases of 50 and 99 indications of proportional results can be given – along with a clear health warning about the small sample size. The ‘Technical Note’ on slide 4 should be included with all press releases and materials for publication. PLEASE NOTE: All materials for publication by PayPal should be sent to the Ipsos MORI team for approval before publishing

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PayPal insights 2015 rus_report

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