How much of the e-commerce cake is eaten abroad?
Online orders from abroad represent roughly three percent of retail e-commerce revenue in the United States and Canada. This share may seem small, but considering the spike experienced in online sales in recent years, cross-border e-commerce has also expanded. As affordability is the main motivator for cross-border purchasing, it is no surprise that developing economies show higher cross-border activity. In North America, Mexico shows the highest cross-border e-commerce share, at six percent.Compared to the United States, Mexico and Canada harbor some of the most open-minded consumers to ordering online from overseas. Whereas six in ten surveyed Mexican and Canadian respondents buy from foreign websites, only one-third answered the same in the U.S. In the largest North American market, online shoppers also favor local merchants to a greater extent, as over 60 percent buy mainly from U.S.-based e-retailers.
To each their own
Whether it be by share of U.S. consumers who shop abroad or by market share, China is the favorite country to buy from abroad in the United States. The United Kingdom, Canada, and Japan are the other most-preferred markets to purchase outside of the U.S. But several factors can keep shoppers away from buying abroad. In a recent survey, around two-thirds of U.S. respondents said they often abandon their online carts with UK brands if shipping costs are too high or if delivery takes too long.In Canada, digital buyers are generally drawn to shopping on U.S. websites. This country accounted for almost half of the Canadian cross-border e-commerce market in 2022. Two of the top-three reasons why Canadian buyers shop cross-border are related to lower costs. And, as is the case with the U.S. and Mexico, Canadians mostly buy clothing when purchasing outside of their country.
Finally, Mexican consumers mainly buy abroad from either the United States or China. What attracts Mexicans the most about buying abroad is the possibility of discovering new and exciting products. The comfort of ordering via a smartphone may also play a role, as 90 percent of consumers in Mexico bought abroad using this device in 2022.
