It's official: One-tenth of the world's population shops online - mostly for books, and most of them using a credit card to pay - according to the latest ACNielsen Online Consumer Opinion Survey.
According to the survey of 21,000 consumers (in 38 markets covering North America, Europe, Asia Pacific, Latin America and South Africa), more than 627 million people have now shopped online, including more than 325 million within the past month. The study asked internet users about their online shopping experiences, including when they last made an online purchase, what items were last purchased, the methods of payment they used, what payment card was used the most for online purchases, and their preferred payment method when shopping online.
Top purchases
Representatively - extrapolated to world population proportions - books were mentioned as being among the last 3 items purchased online. Other popular purchases, measured by the same scale, included the following:
- Over 135 million people purchased DVDs and/or video games;
- Close to 135 million made plane reservations;
- Over 128 million purchased articles of clothing/accessories/shoes;
- Over 112 million paid for music downloads and/or CDs;
- Over 106 million purchased electronic devices (including cameras, etc);
- Close to 98 million bought computer hardware; and
- Over 86 million made hotel and/or tour bookings.
Deepak Varma, senior vice president for ACNielsen International's customised research division, explained: "These findings reinforce the work we've already done in different industries, showing that consumers behave differently depending not only where they are buying (online or offline) but also the category they are buying in. Therefore retailers in each category need to develop a clear understanding of how consumers behave and interact with their specific category and with their brand in order to successfully drive online sales."
Geography
Perhaps not surprisingly, Europe and North America (both at 85%) have the highest incidence of online shoppers. More specifically, Germany, Austria and the UK top the list with at least 95% of internet users having made purchases online in the past. In the USA, 89% have made an online purchase.
The world's most frequent online shoppers are in the UK and Germany, averaging 7 and 6 purchases respectively in the past month. As a region, online shoppers in Europe made an average of 5 purchases in the past month. In fact, most of the markets in Europe display higher average purchases than North America, where shoppers made 4 purchases in the past month (while Canadian shoppers made 5 purchases).
In Asia Pacific, the average number of purchases in the past month is 5. South Korea, despite its high proportion of online shoppers, generated an average of only 4 purchases for the month. But it is Latin America which registered the lowest monthly rate, with an average of only 3 purchases.
"Our recent e-commerce studies clearly show an upward trend in global online shopping," said David Boyd, vice president of internet industry research at ACNielsen. "While there is growth in nearly all global markets, the lesser developed markets are maturing faster than many of their more developed counterparts. It will not be long before we have a nearly level playing field across the globe."
What's being bought?
Across the globe, the most popular items purchased on the internet are books (34%), followed by videos/DVDs/games (22%), airline tickets/reservations (21%) and clothing/accessories/shoes (20%).
And what people buy varies widely by market. As Boyd warns, "International book sellers would want to make sure their websites accommodate Korean and Chinese languages as books top the list of the last three items purchased by the Chinese (56%) and South Koreans (50%). This represents tens of millions of consumers in those markets."
Boyd also says that airlines and online travel agents would be wise to target markets such as Malaysia (55%), New Zealand (40%), Singapore (36%) and Australia (35%) - for which airline tickets and reservations are a common online purchase.
In Japan, groceries (26%) are the second most popular item purchased online after books (30%). With an average of four purchases in the past month and over 69 million estimated online shoppers, Japan presents a big opportunity for online book sellers and grocery sites.
The last three items purchased by online shoppers in the US were books (28%), clothing/accessories/shoes (25%), and videos/DVDs/games (22%).
But 10% of the world's population being online shoppers is still not enough to ensure successful online sales, according to Klaas Hommez, vice president of the consumer products group at ACNielsen: "It is very important for both small and large retailers to understand the triggers that drive brand equity and site usage in their category. Our studies consistently show that websites and brands with higher brand equity attract higher traffic and sales."
How do they pay?
For most online purchases globally, a credit card (59%) or bank transfer (23%) was used to make the payment. In the USA, credit cards are the most popular form of payment for online purchases (64%), followed by debit cards (31%) and PayPal (26%). In Europe, however, cash-on-delivery (COD) is the second-most used payment method.
Cash-on-delivery is a popular payment method used in some Asia Pacific markets, too. China is unique with COD (34%) being the most used payment method, followed by bank transfers (31%). Credit cards rank only third (26%) in this market and are followed closely by money transfers (23%). Yet, when asked about preferred methods, credit cards (24%) actually came second to COD (32%) in China, indicating an unmet need for online credit card acceptance in this market.
The study also shows an unmet demand for online payment cards in markets such as Russia, France, Poland, South Korea, and Japan. In each, a significant number of people wanted to use a payment card but had to use another method of payment instead. In Canada, there was an unmet demand for PayPal.
Nearly six out of ten online shoppers globally say that Visa is the payment card (whether credit, debit, charge, ATM, or deferred debit) they use the most, while approximately one-quarter say they use MasterCard the most. Visa ranks highest throughout most regions (except South Africa, where more than half of consumers use MasterCard for online purchases).
In the USA, Visa (51%) is the payment card used most often by the highest percentage online purchasers, followed by MasterCard (30%). Discover Card is preferred by 7% of online US shoppers, followed by American Express (6%). In Europe, Visa (37%) is only second to MasterCard (50%) in the Netherlands. Both payment card brands are also almost equally split in markets such as Austria (Visa at 44% and MasterCard at 46%) and Switzerland (Visa at 49% and MasterCard at 43%). In Asia Pacific, Visa is most used for online purchases in all markets except China (where the local brand, China Union Pay, is used by over half of respondents).
Finally, American Express generates the highest usage incidence in Mexico, with 14% of online shoppers claiming to have used it the most for their online purchases. It also registers some 6% - 8% incidence in Australia, Italy, Canada, Germany, Netherlands and Singapore.
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