EC: A Booming Job Market for IT Engineers
PayPal, a global online payment platform used by 400 million people in more than 200 countries and regions, has released its 2021 PayPal International Shopping Report. The data concretely shows that online shopping has grown by leaps and bounds in the year 2020, despite the fact the lasting and devastating effects of COVID-19. From this report, which shows some interesting trends, let's take a look at three trends that businesses and IT engineers alike should pay attention to in global e-commerce.
Estimates of 100 trillion yen increase in 2020 and an increase of 66 trillion yen by the end of 2021.
"The pandemic has accelerated a wave of digital change in almost every industry for three to five years, bringing about fundamental and lasting structural change," said Dan Shulman, CEO of PayPal, an online payment platform with 400 million users worldwide, at the company's earnings announcement in February this year.
According to the "2021 PayPal International Shopping Report " released by the company, despite the fact that the global economy stagnated in 2020 due to the spread of the new coronavirus, global online retail sales increased from $3.35 trillion (365.15 trillion yen, converted to 109 yen to the dollar) in the previous year to $4.28 trillion (466.52 trillion yen). (365.15 trillion yen, converted to 109 yen to the dollar) to 4.28 trillion dollars (466.52 trillion yen). In Japanese yen, this is an increase of 100 trillion yen, which means that a new online retail market equivalent to one U.S. country has been created. It is estimated that global online retail sales will grow to $4.89 trillion (533.10 trillion yen) by the end of 2021.
The first trend is the global increase in the number of consumers who are new to online shopping. E-Commerce sales rose nearly 28% in 2020, and even countries with low e-Commerce penetration before COVID-19 saw a significant shift to online shopping, led by Mexico.
As consumers were unable to shop for even the most basic necessities during the lockdown and turned to online shopping, the unprecedented increase in their total amount of purchases was inevitable. Furthermore, in all 13 markets surveyed, the number of online shoppers who said they wanted to use online shopping more in the future was more than double that of those who said they wanted to refrain from using it. It seems that once you get used to the comfort of online shopping, you can't get away from it.
In India, more than two-thirds of the online shoppers were surveyed and have increased their online spending since before the new Corona, and 76% said they plan to increase their spending in 2021-2022. This is the highest figure in the survey, followed by 68% in China and 61% in Mexico.
As consumers increase their spending on online shopping, there is a growing sense of security among consumers about overseas shopping, or cross-border EC, in many markets, led by India, Brazil, and Mexico. As with comfort, consumer anxiety will increase if the EC seller is located in a foreign country, but once they have a smooth shopping experience, their anxiety will decrease.
More to the point, despite campaigns in many countries to support local retailers and encourage them to shop domestically, overseas online shoppers spent more overall than consumers who only buy domestically.Even in Japan, the world's third-largest e-commerce market, 44% of overseas online shoppers said they were looking for cheaper prices. Cross-border online shopping is likely to accelerate.
*The survey asked 13,000 consumers in 13 markets (Japan, China, Hong Kong, Singapore, India, Australia, the U.S., the U.K. France, Germany, Russia, Mexico, and Brazil) about their online shopping habits both within their own country and abroad. The Survey also enquired 13,000 consumers in 13 markets (Japan, China, Hong Kong, Singapore, India, Australia, the U.S, the U.K,France, Germany, Russia, Mexico, and Brazil) about their online shopping habits within their countries and overseas.
The second trend is the rise of new payment methods. As more people shop online, consumers are willing to use more types of digital payments. First on the list are digital wallets and a pay later payment scheme called BNPL (Buy Now, Pay Later).
BNPL, which allows people to pay later when they want to, has taken root in Australia and the UK and is gaining popularity among young consumers. Considering the financial concerns of consumers, the provision of such solutions is expected to increase in the future. For businesses, the BNPL will be a more manageable alternative to compensate for late payments.
In Japan, PAYD, which provides a service that allows easy post-payment with just a cell phone number and email address, has joined forces with PayPal to offer "next month post-payment" and "three installments post-payment" with no installment fees at 31 million merchants worldwide that accept PayPal payments.
Furthermore, virtual currencies are emerging as a means of payment. Traditionally, many people have purchased them for investment purposes, but virtual currencies have finally entered the stage of purchasing goods. In the US, PayPal users can now use Bitcoin, Litecoin, Ethereum, and Bitcoin Cash as payment methods. The flexibility of payment methods will be attractive to consumers.
The third trend is the rise of new concerns about fraud as online shopping increases. While expectations for new payment methods are rising, the survey found that people are becoming increasingly wary of privacy and online fraud, especially in markets with strong cash-based tendencies such as Japan and Mexico. In the U.S., there is a particularly high level of concern about the leakage of personal information when using overseas shopping.
For international online shoppers, security is the most important factor when choosing a payment method, followed by speed of payment and available payment methods. On the other hand, in Australia, the U.K., Mexico, Germany, and the U.S., buyer protection and anonymity of financial institutions were more important.
The insights gained from the three global e-commerce trends mentioned above may be that there are great business opportunities for Japanese businesses in overseas markets, and to seize them, they need to respond to the need for new payment methods and consumer concerns about fraud.
According to PayPal's "Global Survey on Mobile Commerce, 2019 Edition" released in December 2019, the percentage of sales made up by overseas customers of domestic merchants selling online was 26%, the lowest among the 11 countries surveyed. This means that there is an opportunity for Japanese businesses to expand their sales in the future by attracting overseas customers.
In other words, in an environment where inbound demand is not expected and business growth is difficult in the home market alone, turning to the still-unexplored cross-border EC is a promising measure if further growth is to be aimed for.
Security measures, such as dealing with new payment methods and fraud, can be met by using the latest services provided by online payment experts such as PayPal. As Sri Sivananda, CTO of PayPal, said at an Asian press event held in May this year, "We have a variety of anti-bot technologies to ensure that our payment platform customers are not disadvantaged if their data is misused”. Furthermore, PayPal's system does not provide credit card or bank account information to any merchant.
As it was mentioned earlier, Japan is the world’s third largest e-commerce market, which only accounts for the growing number of international users and shoppers. While this is an exciting opportunity for businesses to grow and expand, IT engineers in Japan should not turn a blind eye to the expanding job opportunities a growing EC industry brings.
In conclusion, as the EC sales reach new heights everyday, a jump in demand for software engineers is also predicted. For businesses and startups to make the online shopping experience safer and more convenient, they will be looking to hire more security engineers, application testers, ethical hackers, and web developers. With recent cross border shopping trends, more and more companies will be in search of remote workers as well.
Considering the consumer's insights will likely determine the services that e-commerce businesses should choose and at a time when EC is in a phase of global expansion, it is important to make the right choice.
You can find the full 2021 Paypal International Shopping Report by clicking this link: https://www.paypalobjects.com/marketing/brc/shared/lead-nurture/pdf/PayPal_Borderless-Commerce-Report_SG.pdf
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