Besides China and the US, UK is an important E-commerce market in the world
2022-02-10 14:47:00
The United Kingdom is an important e-commerce market in the world
Worldwide e-commerce continues to grow rapidly every year. In most countries the favorite method of purchase is buying products online. By 2040,the predication is that e-commerce will facilitate 95% of purchases. Therefore, it is wise for online stores to not only focus on domestic sales, but also on cross-border sales. Cross-border e-commerce is a smart way for retailers to create a wider market, which can lead to increased sales. Nevertheless, it is important to consider that selling products to foreign customers is not the same as selling products to domestic consumers. After all, consumers in every country have different habits and preferences with regards to online shopping. In this blog series we analyse various e-commerce markets. In previous editions we discussed selling online in the United States and the Netherlands, today part 3: The United Kingdom.
E-commerce market share
The UK is the third biggest e-commerce market in the world, with China and the US in first and second place. The business-to-consumer e-commerce turnover in the United Kingdom was worth €175 billion in 2018. At the end of 2019, the expectation is that the e-commerce turnover will over €200 billion. If this turns out to be the case, this would mean an increase of 14.6% compared to last year. This would also mean that 7.94% of the UK’s gross domestic product would be made up by e-commerce sales.
It is also predicted that 96% of the British population will use the internet this year. This is a small increase compared to previous years, when the share of the British population using the internet was 95%. Just like other years, 87% of UK internet users are expected to shop online in 2019. These online shoppers spent € 3254 per person last year and the prediction is that this amount will increase to € 3620.
By 2028, e-commerce in the United Kingdom will account for 53% of the country’s total retail sales. For comparison: currently, this accounts for 19,2%. By 2028, about half of the adult population in the UK will consist of Generation Z and Millennials, which will greatly boost the growth of online shopping. In addition, it is predicted that there will be significantly in 2028, stimulating online growth and merging physical and online retail channels.
Biggest online retailers and markets
Great American online retailers, together with some strong local retailers, dominate the United Kingdom. The main explanation that American platforms dominate the United Kingdom e-commerce market is by the large home market size of American online retailers and the early development of these companies in the UK. With the exception of Tesco, a British retailer, the largest online stores in the UK are American, namely Amazon and eBay. Other big online retailers are Asos, Argos, Play.com, Next and John Lewis.
UK consumers do not only buy their products from UK online retailers. On the contrary: consumers in the UK shop a lot at foreign online stores and do this more often than consumers in most Western countries. 73% of the products purchased online come from domestic online stores. Of the remaining 27%, 16% of the goods purchased online are purchased outside the EU and 11% are ordered from an EU country. The foreign markets from which UK consumers order most products online from are the United States, Germany and France. The United States accounts for over 13% of total UK exports. From the United States, UK online shoppers mainly order fashion-related items, from Germany electronics, from France, UK online shoppers often order perfumes and cosmetics.
