Local payment preferences are becoming a bigger factor in whether consumers in emerging markets complete an online purchase, according to new research from dLocal.
Its latest report found that 71 per cent of shoppers across seven high-growth markets are unlikely to buy from a website that does not support local currency or alternative payment methods, while buy now, pay later also emerged as a significant barrier when unavailable.
dLocal’s latest research report – The Next Wave of Global Consumers – provides key insights into the shopping preferences and purchasing drivers of consumers surveyed in seven of the largest or fastest-growing consumer economies in the Global South.
The research found that the availability of local payment methods was a profound ease of entry, with 71 per cent of consumers unlikely to buy from a site that didn’t accept their local currency or an alternative payment method, and nearly 99 per cent of respondents marking it as important. The report is based on a survey of 1,358 consumers in Mexico, Argentina, Brazil, Thailand, the Philippines, Kenya, and Nigeria.
By 2035, 65 per cent of global economic growth is expected to be driven by emerging markets, while by 2027, almost 90 per cent of millennials and Gen Z consumers are expected to reside there. However, detailed, comparable data on how shoppers actually behave in Latin America, Africa, and Southeast Asia is relatively scarce, and this report aims to give brands, retailers, and payment providers key insights on consumer preferences and behaviours. The seven markets sit in regions that will make up the majority of the world’s population growth within a generation.
Alternative payments preferences
The absence of buy now, pay later (BNPL) is one of the highest barriers to payments online at 39 per cent, followed by alternative payment methods such as e-wallets, bank transfers, mobile payments, or prepaid cards at 37 per cent. One in five (20 per cent) pointed specifically to products not being priced in their local currency.
93 per cent of respondents said being able to use their preferred local payment method (such as Pix, a bank transfer, or a mobile wallet) on an international site would make them more likely to buy from a foreign brand. Payment related changes are already the biggest driver of shifting shopping habits, with more than half of consumers selecting local payment methods and currencies as having the biggest impact on their online shopping.
“International brands and retailers waiting for emerging markets to adapt global payment methods risk entering them when they are already saturated,” said Horacio Raviolo, head of commercial partnerships, dLocal. “Everyone expects world-class shopping experiences, fast shipping and great customer service, however differentiation in these markets comes in the form of local currencies and payment methods.”
Regional snapshots
- In Argentina and Mexico only six per cent and five per cent respectively would buy without local payment support, the two lowest figures recorded.
- Chinese brands are purchased most often despite being least trusted, with 5.4 per cent negative sentiments (three times the negative rate of U.S. brands at 1.9 per cent), yet they’re purchased ‘often’ or ‘all the time’ by 44.3 per cent of respondents, compared with 31.5 per cent for US.
- The Philippines is the only market where accepting a preferred local payment method beats shipping entirely as the top driver for European brands (64 per cent).
- Nigeria and Kenya are the only two markets where faster shipping beats lower shipping costs as the top purchase driver, whereas everywhere else, cost wins.
- Kenya’s single biggest cited barrier is the unavailability of BNPL, at 59 per cent, nearly 14 points above any other market.
The report combines original survey data with dLocal’s prior LATAM research, and publicly available market data to provide insights into cross-border shopping, attitudes towards US, European, and Chinese brands, and triggers to convert consumers into loyal, repeat customers.
