How can DTC clothing brands go global and win over the younger generation of consumers by handling the six major payment links?

How can DTC clothing brands go global and win over the younger generation of consumers by handling the six major payment links?

In the past two years, under the dual influence of the epidemic and international tensions, the public's yearning for a better life has become stronger, and the "self-pleasure" consumption trend is accelerating globally, driving the online sales of the two major categories of underwear and sportswear to double.

China has unique advantages in the clothing supply chain, but Chinese brands going overseas still have a long way to go in exploring how to build global brands and have deeper interactions with local consumers overseas.


 

This article will start from payment. We invite Michelle Gao, a business expert of Airwall ex, to talk about the following from the perspective of the operation and financial work of the overseas team :

1. How can DTC underwear and sportswear brands that are going global achieve rapid business growth by optimizing the payment process to increase overseas consumer favorability ?

2. How can overseas financial teams ensure the security and compliance of cross-border funds and reduce the cost of cross-border funds?

Operational perspective





Why should we pay attention to the payment link when expanding underwear and sportswear brands overseas?

 

In 2022, millennials accounted for 28% and 21% of the U.S. underwear and sportswear consumers respectively, ranking the highest among all generations.


Source: "2022 Underwear & Sportswear Overseas Industry Report"


Data shows that 70% of consumers have given up on purchasing due to poor checkout experience. As digital natives, millennials are more inclined to choose DTC brands that value shopping experience and product design.

 

Payment ability is the first key to opening up overseas markets. If overseas companies want to stand out among the DTC brands in Europe and the United States, the construction of the payment link cannot be ignored.

 

 

What are the payment habits of millennial consumers in Europe and the United States?

 

In 2022, 70% of American millennial consumers prefer to make consumer payments on mobile devices. Debit cards, Paypal and credit cards are their preferred online payment methods, accounting for 62%, 50% and 46% respectively. BNPL (buy now, pay later) has become a rising star and is increasingly popular among young people. In 2021, 30.3% of American millennials are using BNPL, and it is expected to rise to 40.6% in 2025.


Source: "2022 Underwear & Sportswear Overseas Industry Report"


How to create a smooth, high-conversion online payment experience?

 

By breaking down consumers' online payment scenarios, payment can be divided into the following steps: "click to pay - fill in information - select payment method - click to pay - process refund - repeat purchase". The experience of each step will directly affect the final conversion of the order.

 

【step1 click to pay】


The smoothness of the checkout page plays an important role in consumers' shopping experience. By embedding the checkout page, creating a payment page that is compatible with mobile devices, and adapting payment integration methods to mainstream website building tools, you can effectively ensure the smoothness of the payment experience after the site goes online and reduce consumer churn caused by operational issues.


 

Smoother payment experience: Airwallex provides a variety of acquiring interface docking solutions and optimization suggestions, such as: hosted payment pages, embedded templates or fields, customized interfaces, to meet the needs of customers of different types, regions, ages, etc.

 

【step2】Fill in payment information


As consumers become more aware of cybersecurity, they will pay more attention to the security of their payment information and payment process. Overseas merchants should actively add various information security annotations during the payment process, such as security identification of the payment environment, data privacy policy, and security tips for key payment links, to dispel consumers' concerns.



 

Safer payment environment: Airwallex can help overseas merchants provide automatic error correction and automatic filling of payment information on the checkout page, providing consumers with a reliable information security environment and realizing a short-path payment process.

 

【step3】Select payment method


When making localized layouts, clothing brands often adopt a multi-site model and adapt different languages, currency pricing and visual styles on their websites for different countries and regions. In the payment and checkout process, overseas merchants should also fully understand the mainstream payment methods in the target market. When choosing a payment acquiring partner, it is necessary to examine whether the partner's payment capabilities cover a wide range, so as to reduce consumer abandonment caused by insufficient payment method coverage and improve conversion rates.




 

More payment options: Airwallex can help merchants around the world acquire online payments, whether through cards, e-wallets and other payment methods preferred by consumers.

 

【step4】Click to pay


Blindly pursuing success rate will lead to insufficient risk control, bring various hidden costs, and ultimately affect the merchant's operating income, such as fraud and fraud. However, too strict risk control thresholds, such as adding multiple identity authentication, will inadvertently reject more potential high-quality consumers. Local acquiring, smart routing, smart retry and other methods or technologies can effectively improve the payment success rate. When choosing a payment partner, overseas merchants can focus on such technical service capabilities.


 

A more balanced risk control strategy: Airwallex provides overseas merchants with fully automated AI-based risk control management tools that can set their own rules, helping merchants to achieve an effective balance between risk control and customer experience. At the same time, local acquiring, intelligent routing, intelligent retries and other methods or technologies can effectively improve the payment success rate.


 

【step5】Repurchase


Underwear and sportswear merchants often use EDM email marketing and other methods to push new product promotions and promotions for the new season to customers. For repeat consumers, repeatedly entering payment information is often the most annoying step in online shopping. Merchants can consider using tokenization tools so that consumers only need to enter payment information when they make their first purchase, and then they can complete payment with one click every time they shop, improving payment fluency.


 

Smarter data feedback: Airwallex can provide real-time transaction panels to monitor business performance and optimize the payment experience during consumption through data feedback. Segmented data can help overseas merchants conduct business analysis and operation optimization, extend consumer LTV, and ultimately increase consumer repurchase rate.

 

 

【step6】Apply for a refund and customer service will intervene


The return rate of clothing products has remained high. When refunds and credit card disputes occur, merchants cannot communicate quickly through emails or phone calls, which can easily lead to ambiguity, misunderstandings, complaints and other bad experiences. Overseas merchants should provide localized customer service support or use intelligent dispute systems to quickly and effectively resolve common disputes such as refunds and refusal to pay. At the same time, in terms of order inquiries and refund policies, overseas merchants should also be as flexible as possible and in line with local consumer habits.


 

More local customer service: Exclusive local customer service team can easily and promptly meet daily payment management needs such as reconciliation, risk control optimization, payment success rate improvement, dispute resolution, etc.



 

What challenges do overseas finance teams often encounter when transferring funds across borders?


For overseas merchants, in addition to paying attention to the consumer shopping experience in the payment process to improve order conversion rates and achieve business growth, cross-border payments are equally important and challenging in the work of the financial team . For example :

 

1. Fund security and compliance : Different countries have different regulations and policies, and it is not known how to transfer funds across borders safely and compliantly.

 

2. Efficiency of capital circulation : Many acquiring services often have long settlement times and long margin cycles, and the income is not recorded in the account for a long time, which greatly affects cash flow and inhibits the company's development.

 

3. Fund settlement costs : The single currency for acquiring and settlement results in unnecessary exchange costs, which can lead to a large loss of profits over time.

 

4. Funding chain management : In the traditional model, operations and financial teams are often required to connect with different financial service institutions such as "gateways, acquiring institutions, banks, foreign exchange settlement and sales, and RMB inbound", which is costly and labor-intensive.

 

 

As a leading global financial technology company, Airwallex not only provides payment acquiring solutions for overseas merchants, but also efficiently optimizes consumers' online payment experience and improves order conversion.

 

At the same time, Airwallex also provides overseas merchants with a one-stop cross-border payment service that integrates payment and collection, opening up and improving global capital operations from acquiring to payment, and enhancing the efficiency of capital circulation. This has greatly alleviated the various problems of human and material resources of the financial team.

 

In response to the above problems that financial teams often encounter, Airwallex can help sellers achieve:

 

【Fund security and compliance】——Direct connection with card group, safe and stable

 

Airwallex is a global member of international card organizations such as Visa, Mastercard, and UnionPay. As an acquiring bank directly connected to the card group, it can ensure the highest fund security and compliance stability of bank card acquiring. At the same time, it has better rates, faster settlement speed, and higher fund turnover efficiency. One merchant has one merchant number, avoiding fund security and compliance risks caused by multiple merchants sharing the wrong merchant number.

 

【Efficiency of capital circulation】—— Settlement is as fast as T+3, and the margin period is only 30 days

 

We provide high-quality merchants with settlement cycles and margin cycles that are far superior to the market average, significantly enhancing capital turnover efficiency and allowing each revenue to be quickly converted into a new driving force for your business development.

 

【Fund Settlement Cost】—— Multiple Settlement Currency Options

 

You can select the merchant settlement currency from 10 currencies including USD, HKD, EUR, etc. If the merchant sets the price in USD, you can directly settle the merchant in USD and use USD to pay for suppliers, advertising and other expenses, thus reducing the foreign exchange cost of the merchant who needs to conduct a secondary currency exchange due to the inconsistency between the store pricing currency and the merchant settlement currency, and retaining the profit of each transaction to the greatest extent.

 

【Fund Chain Management】—— One-stop full-chain fund management

 

You only need one choice for the five funding links. From acquiring, fund management, to currency exchange, payment, and card issuance - enhance end-to-end timeliness and save comprehensive funding costs.

 

How can underwear and sportswear brands develop a global strategy that combines product quality and effectiveness?

 

In summary, by exploring the payment habits of overseas consumers of underwear and sportswear, we learned how to create a smoother and higher-conversion payment experience from the consumer's perspective.


By building a good payment infrastructure, merchants going overseas can explore overseas markets more easily.

 

Are you still unsatisfied and want to learn more about how to develop a global strategy that combines product quality and effectiveness, and keep up with the general trend of clothing going global? In the underwear and sportswear industry, which subcategories and functional products have more potential? How do industry leaders Lululemon and Thirdlove achieve growth through social media?




Airwallex said it will work with more partners to delve deeper into the industry, jointly explore the opportunities, trends and challenges of the global e-commerce market, and help more Chinese companies going overseas increase their competitiveness.


Brand Overseas

Payment Methods

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