News & Insights

Market Snapshot 

Study Period:	2020-2027
Base Year:	2021
CAGR:	21.76 %

Market Overview

The United Kingdom E-Commerce Market is anticipated to grow with a CAGR of 21.76 % during the forecast period (2022- 2027). E-commerce has grown in popularity in recent decades as consumers shift their spending to online outlets. On the supply side, investment from Internet-focused enterprises, paired with sellers whose operations were built by supplying customers through physical channels, has resulted in the expansion of choice to domestic and international markets. While traditional retail sales have remained stagnant, regional revenues from Internet shopping have risen dramatically.

• The growth of online retailing is augmenting a relentless pursuit of value for money. Shoppers continue to look online for the best prices and deals, expanding the proportion of money being spent online. The internet has become the natural place for shoppers to look for fashion, health and beauty, consumer electronics, home and garden, and travel services.
• Almost all online businesses based in the UK allow customers to pay with credit or debit cards. Visa and MasterCard are the most accepted, while American Express, Diners Club, and JCB are less. Several websites use Pay Pal or other similar services. Consumers in the country are becoming much more aware of online identity theft and will generally only conduct financial transactions on secure websites.
• With the continuous rise of social networking and mobile internet access, social media marketing is a crucial channel in which firms are most likely to be boosting their investment in e-commerce over the coming years. The advantages and strength of online sales contrast with the gloom in bricks-and-mortar retailing, with physical stores falling into bankruptcy or administration.
• According to the statistics released by Eurostat, the percentage of the population accessing the internet increased to 98% in 2020, along with a forecasted figure of reaching 99% by the end of 2021. The increasing internet population is also a critical factor in the growth of the e-commerce industry across the country.
• The COVID-19 epidemic has had a long-term impact on the retail industry, changing consumer shopping habits and store and brand priorities. Most notably, companies see a significant shift to the internet as consumers have become reliant on it due to a slew of store closures. Strong eCommerce businesses, such as Amazon will undoubtedly benefit substantially from this.

Key Market Trends

Growing Ease of Using Alternate Payment Methods will Drive the Market

• The UK has been turning toward eCommerce like never before, and according to Hootsuite, in 2021, more than 85% of the country's residents were already shopping online. The ease of using alternate payment methods apart from the traditional cash transactions is driving the growth of e-commerce sales in the country.
• Similar to most of the developed world, nearly every financial transaction in the country relies on some form of technology. However, unlike its counterparts, the UK market witnesses a considerable percentage of purchases made through an alternative payment method. Consumers in the UK are increasingly making regular payments with contactless, buy now-pay later, and bank transfer services.
• Debit and Credit cards are the key form of payment method in the country. According to the Bank of England, debit card is significantly used in the UK, and the popularity of debit cards has taken over cash in recent years.
• An increasing percentage of transactions are inclining toward contactless payments. Moreover, the majority of these consumers use mobile and tap cards. Two of the most popular contactless payment methods include Google Pay and Apple Pay.
• Further, the growth of mobile shopping in the country is gradually accelerating the popularity of eWallets. eWallet utilization is growing at twice the pace of cards, with PayPal leading the way. The adoption of eWallets in the UK may accelerate even more as online shoppers embrace more cross-border shopping with the rest of Europe.