PayPal announced yesterday that it has surpassed 100 million registered users. Not bad for a seven-year-old company.
What jumped out at me is that these 100 million users are distributed across 55 countries. Although eBay won’t release the ratio of US PayPal users to non-US PayPal users, my guess is that roughly 65% of registered PayPal users are American. Although eBay now has more non-US registered users than US users, PayPal is destined to play catch up. While eBay does business in 30+ markets, PayPal does business in 14 (up from 10 last year). That’s because it’s one thing to localize a Web site, it’s another thing to get regulatory approval to support a new currency; PayPal currently supports seven.
The only threat I see to PayPal’s success is this incessant amount of phishing spam I keep getting. The stuff is getting more and more sophisticated and I can’t imagine the damage it’s doing to people who get lured to some dummy site to input their account information. It’s getting so I just assume the latest PayPal (or eBay) email I get is spam, which it usually is. That said, I’ve learned to sort the credible from the spam and perhaps the rest of the world will do it too — at least until Google launches its payment tool.
According to this WSJ interview, the Chairman of Starbucks, Howard Schultz, says he plans to significantly increase the number of Starbucks locations in the years ahead to 30,000 (from 11,000 today), half of which will be located outside of the US.
Currently, about a third of all Starbucks stores are located outside the US, in 37 countries. Only 209 stores are based in China, but that’s where the bulk of the expansion will take place. Schultz didn’t say how many locations are planned for China, but I wouldn’t be surprised to see China account for 20% of those 30,000 locations, which translates to 6,000. Of course, that’s an easy number to come up with when there is no target date given. And the underlying assumption is that China will continue its robust growth and local competitors don’t make a large dent.
But so far so good. Starubucks has taken a page from McDonald’s global playbook and improved it: It has the same global ambitions but has largely freed itself from any US-centric branding. But as Starbucks grows abroad it will need to pay close attention to undercurrents back home. I’m still a Starbucks regular, but I order Peets by direct mail. And the minute they open a store in the neighborhood, my daily habits may change.
For an online retailer, going global isn’t easy. That’s because retailers have to figure out how to deliver products to consumers around the world cost effectively and how to process payments online while minimizing risk. Now this sounds simple enough — just take credit cards and use FedEx — except that international shipping isn’t exactly cheap and not all customers around the world are comfortable using credit cards.
But these two barriers appear to be falling, as shippers get more affordable and the world increasingly adopts credit cards. According to Internet Retailer, ecommerce spending on Visa cards increased a whopping 44% last year, up more than $20 billion.
And Batteries.com worked with DHL to lower intl. shipping costs by more than half. This is allowing the company the go after those 11 foreign markets that it departed from just last fall.
As the many global barriers to success — payment processing, delivery, customer support, returns management — continue to fall, the pressure on retailers to look beyond borders will increase. That’s not to say going global is going to be easy, but it will at least be doable.