UPS: 2018 Online Shopping Consumer Behavior Survey Report

The "Online Shopping Consumer Behavior Survey" report released by UPS shows that in the highly competitive retail market environment, as the number of online shoppers in Asia continues to increase, their growing expectations are driving the demand for free shipping, expedited delivery and customer-centric return policies to be included in industry standards.

This year marks the sixth year that UPS has conducted the "Online Shopping Consumer Behavior Survey". The report shows that under the influence of continued norms and emerging trends, the behaviors and preferences of online shoppers in China, Hong Kong Special Administrative Region, Japan, the United States, Canada, Mexico, Europe and Brazil are changing. The results of this survey are divided into three categories: norms, changes and emerging trends.

“Analysis of the thoughts and motivations of thousands of consumers around the world shows that smart shipping and returns solutions are not a sunk cost, but a strategy that enables retailers to win and retain customers, drive repeat sales, and encourage customers to buy more online and in stores,” said Sylvie Van den Kerkhof, vice president of marketing for UPS Asia Pacific.

Harld Peters, President of UPS China, said: "In 2017, the overall transaction volume of China's cross-border e-commerce reached 7.6 trillion yuan, an increase of 20.6%. As Asian consumers gradually open their arms to welcome the "new retail" era, Chinese companies need to create a consumer-centric retail environment. Better flexibility and convenience are key factors affecting consumer purchasing behavior. Companies can use logistics solutions such as UPS Access PointTM and My ChoiceTM to provide consumers with a seamless retail experience and stand out from the fierce industry competition."

Normal: Asian online shoppers have low satisfaction and continue to seek free and fast delivery and return services.

It is worth noting that only 57% of Asian shoppers are satisfied with their online shopping experience, which is the lowest proportion compared with other surveyed regions. Since 2015 (when the survey satisfaction rate was 46%), the index has only increased by 11 percentage points, indicating that the improvement process of customer satisfaction in Asia is very slow.

Other aspects of the retail experience that are becoming increasingly important each year and influencing online shoppers’ purchasing behavior include free, fast shipping, and free and easy return policies. Interestingly, Asian online shoppers receive free shipping on an average of 85% of their orders, suggesting that free shipping can provide a competitive advantage for retailers that offer it.

Nearly two-thirds of Asian online shoppers said free delivery is an important factor in the checkout process, and 46% of consumers will buy more products to meet this condition. In addition, about half of Asian online shoppers have given up shopping because the delivery date cannot be provided or the delivery time is too long. The average delivery wait time of 11 days will cause consumers to give up purchasing.

At the same time, a convenient and easy-to-understand return policy can increase sales and customer satisfaction. 67% of Asian consumers said that free shipping returns are very important when choosing online retailers. Although only 40% of Asian online shoppers have actually returned online shopping in the past year, only 47% of shoppers are satisfied with the convenience of returns. Asian retailers must take more measures to improve services in this area.

In addition, for 79% of consumers, their return rate is only 10% or less. Among them, 69% of consumers will buy new products after returning online purchases in stores, while 67% of consumers choose to buy new products after returning online, which proves the huge business opportunities brought by worry-free return services.

Changes: In recent years, Asian consumers have become more accustomed to using smartphones to shop, choosing in-store pickup, and shopping at international and smaller retailers.

Smartphone use is growing among Asian shoppers, and using smartphones to shop has become commonplace. 77% of consumers have made an order on their mobile phone (the highest rate in the world), up from 55% in 2015. In contrast, only 48% of US smartphone users have made an online purchase on their device.

In-store pickup is becoming increasingly popular (37% of consumers used it last year, with 59% planning to do so more in the next year). Significantly, this could be a lucrative option for retailers. 60% of online shoppers in Asia who used in-store pickup in the past year purchased other items in the store. This percentage is even higher in mainland China, at 74%.

Sylvie Van den Kerkhof, head of the Asia Business School, said: “Our research shows that online shoppers in Asia are now shopping at a wider variety of retailers, from large malls to boutiques, and from domestic to international stores. Importantly, this tells us that small businesses in Asia have a viable opportunity and customer base to expand internationally, and their business is only set to grow.”

The study found that 55% of Asian online shoppers are open to international retailers, of which 49% shop at overseas retailers because the brand or product is not available domestically, or because the overseas market offers better quality (39%) or price (38%).

It is worth noting for Asian businesses that Asian online shoppers have a strong preference for shopping at Asian retailers.

77% of Asian consumers who purchased international goods purchased them from retailers in their region, while 31% had placed orders with retailers in the United States. The proportion of online shoppers in Hong Kong, China, who purchased international goods was the highest at 82%, followed by mainland China at 64%. Meanwhile, only 21% of Japanese consumers purchased goods from outside their own country, indicating a strong preference for domestic goods.

Emerging trends: New areas of retail that may play a bigger role in the future:

Compared to other regions, alternative delivery stations are most popular in Asia. 71% of consumers, especially millennials and urban consumers, prefer to wait longer for their parcels to be delivered to alternative delivery stations to save on shipping costs. Shoppers’ preference for alternative delivery locations has increased significantly from 46% in 2015 to 59% in 2018.

Asian consumers also love online shopping, with 98% having shopped at an online store and more than a third saying they will use online shopping more in the next year. Better prices (64%) and reduced shipping costs (42%) are the main reasons consumers choose to shop online rather than directly at a retailer.

Sylvie Van den Kerkhof, chief executive of UPS, added: “The UPS Online Shopping Consumer Behavior Survey report repeatedly shows that as online shoppers benefit from more choices, they are placing more and more emphasis on the shopping experience - it is critical for retailers to know how to cater to and adapt to their changing needs.”

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