Germans and British the World’s Biggest Online Shoppers

Books Most Popular, Followed by DVDs/Videos/Games & Plane Reservations

Credit Cards the Most Popular Payment Method, with VISA No.1 Globally

19 October 2005
New York, NY
  
More than 627 million people have shopped online, including over 325 million within the last month, according to a study released today by ACNielsen, the world’s leading provider of consumer and marketplace information. Over 212 million online shoppers mention books as among the last 3 items they purchased online. In addition:

• 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.
  

The twice-yearly global ACNielsen Online Consumer Opinion Survey, the largest of its kind, polled over 21,100 respondents in 38 markets from North America, Europe, Asia Pacific, Latin America and South Africa (See Table 1 for market breakdown). The study asked Internet users around the world about their online shopping experiences, including when they last made an online purchase, what items were last purchased (see Table 2 for a list of items covered), the method(s) of payment used, what payment card was used the most for online purchases, and the most preferred payment method when shopping online.

Table 1: 38 Markets Covered

Table 2: 17 Categories of Items Covered

“The findings reinforce the work we already do in the different industries – Consumer Products, Finance, Internet, Technology & IT – showing that consumers behave differently depending not only where they are buying (online vs. offline) but also the category they are buying. 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,” said Deepak Varma, senior vice president, ACNielsen International (Customized) Research.

Not surprisingly, Europe and North America (both at 85%) have the highest incidence of online shoppers. Germany, Austria and the UK top the list, with at least 95 percent of Internet users having purchased online. In the U.S., 89 percent have made an online purchase.

The world’s most frequent online shoppers are in the UK and Germany, averaging seven and six purchases respectively in the past month. As a region, online shoppers in Europe made an average of five purchases in the last month. In fact, most of the markets in Europe display higher average purchases than North America, where U.S. shoppers made four purchases in the past month and Canadian shoppers made five.

In Asia Pacific, the average number of purchases in the past month is five. South Korea, despite its high proportion of online shoppers, generated an average of only four purchases last month.

It is Latin America which registers the lowest past month purchasing, with an average of only three 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.”

Seek and You Shall Buy…Entertainment and Travel

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%).

What people buy varies widely by market. “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,” said Boyd.

Meantime, airlines and online travel agents would be wise to target markets like Malaysia (55%), New Zealand (40%), Singapore (36%) and Australia (35%) for which airline tickets/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 U.S. were books (28%), clothing/accessories/shoes (25%), and videos/DVDs/games (22%).

“One in ten of the world’s population shopping online is not enough to ensure successful online sales,” warns Klaas Hommez, vice president of Consumer Products Group, ACNielsen. “It is still 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.”

Credit Cards the most popular payment method online

For most of these online purchases globally, a credit card (59%) or bank transfer (23%) was used to make the payment. In the U.S, 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 2nd most used payment method.

Cash-on-delivery is a popular payment method used in some Asia Pacific markets as well. China is most unique with COD (34%) as 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 come second to COD (32%) in China, indicating an unmet need for online credit card usage in this market.

An analysis of the findings shows an unmet demand for online payment cards in such markets as Russia, France, Poland, South Korea, Japan and China. In each of these markets, a significant number of people wanted to use a payment card but had to use another method or payment. In Canada, there was an unmet demand for PayPal.

“Our regional and country-specific consumer studies show that a major concern in less developed markets is the safety of online--and offline--payment methods, while in more developed markets, online shoppers are demanding more sophisticated methods,” says Bruce Paul, vice president of Financial Services Research at ACNielsen. “This represents both a challenge and an opportunity for payment card companies and their competitors to understand exact usage drivers as they evolve differently in each market.”

Nearly six in 10 online shoppers globally say that Visa is the payment card (credit/debit/charge/ATM/deferred debit) they use the most, while about a quarter use MasterCard the most. Visa ranks highest across most regions except South Africa where over half of consumers use MasterCard for online purchases; about four in 10 use Visa.

In the U.S., 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 shoppers in the U.S., followed by American Express (6%).

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; 29 percent use Visa.

In Europe, Visa (37%) is only second to MasterCard (50%) in the Netherlands. Both payment card brands are also almost equally split in markets like Austria (Visa at 44% and MasterCard at 46%) and Switzerland (Visa at 49% and MasterCard at 43%).

Meanwhile, American Express generates the highest usage incidence in Mexico, with 14 percent of online shoppers claiming to have used it the most for their online purchases. It also registers some 6-8% incidence in markets like Australia, Italy, Canada, Germany, Netherlands and Singapore.
  

About ACNielsen
ACNielsen, a VNU business, is the world’s leading marketing information provider. Offering services in more than 100 markets, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen’s market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.

ACNielsen is part of the VNU Marketing Information group. VNU is a global information and media company with leading market positions and recognized brands in marketing information (ACNielsen), media measurement and information (Nielsen Media Research) and business information (Billboard, The Hollywood Reporter, Computing, Intermediair). VNU is active in more than 100 countries, with headquarters in Haarlem, the Netherlands and New York, USA. The company employs 38,000 people. Total revenues under IFRS amounted to EUR 3.3 billion in 2004. VNU is listed on the Euronext Amsterdam (ASE: VNU) stock exchange.