This is B2C Europe Solutions Platforms What’s new Contact Get a quote EN Brexite-commerceEurope Martin Hooker 4 minutes Global e-commerce markets: The United Kingdom The UK is the third biggest eCommerce market in the world Worldwide eCommerce continues to grow rapidly every year. In most countries the favorite method of purchase is buying products online. By 2040, the predication is that eCommerce will facilitate 95% of purchases [1]. Therefore, it is wise for online stores to not only focus on domestic sales, but also on cross-border sales. Cross-border eCommerce is a smart way for e-tailers 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 eCommerce markets. In previous editions we discussed selling online in the United States and the Netherlands, today part 3: The United Kingdom. The UK is the third biggest eCommerce market in the world, with China and the US in first and second place Ecommerce market share The UK is the third biggest eCommerce market in the world, with China and the US in first and second place [2]. The business-to-consumer eCommerce turnover in the United Kingdom was worth €175 billion in 2018. At the end of 2019, the expectation is that the eCommerce turnover will over €200 billion [3]. 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 eCommerce 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, eCommerce in the UK will account for 53% of the country’s total retail sales [4]. 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 etailers, dominate the United Kingdom. The main explanation that American platforms dominate the UK eCommerce 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 Lewis4. 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 [5]. 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. Consumer behavior and preferences When selling products to Brits, it is important that their standards, expectations and preferences are taken into account. It is in the first place important to know what products are popular with British online consumers. When the Brit shops online, he mainly buys fashion and sporting items. Followed by travel items, household items, movies & music and books & magazines [6]. In addition to offering the right products, it is also important that British online shoppers can pay with the method they prefer to use. The most popular payment methods among British online shoppers is PayPal (40%), followed by credit card (24%) and prepaid cards (17%). Deliver preferences If British consumers have ordered their desired products, they would prefer to have them delivered to their home, followed by delivery to a mailbox or multi-occupancy mailbox by the mail carrier and delivery to their workplace. When looking at innovative delivery methods such as in-car delivery, in-home delivery and delivery to an unmanned safe. British online-shoppers have the most confidence in delivery to an unmanned safe, followed by in-car and in-home delivery[7]. Return the parcel UK online shoppers are seen as “serial returners” who send back a lot of items. The total worth of these items was last year around €8.7 billion. This is a problem for e-tailers who want to sell their products in the UK, as this causes additional costs. Fashion retailers are among the worst hit, with 37% reporting increased levels of returns. Regarding the return of products, it is important that British online shoppers have a choice between different methods that they can use for this. UK customer’s preferences for the method of returns varies, but the preference is to return the package at the post office (73%). Followed by courier collection (62%), the retail store (61%), a collection point (47% and a locker (28%) [8]. For e-tailers who want to sell in the UK, it is important that the return process is optimized. It appears that a large proportion of UK online shoppers choose to never shop with a brand again when they have had a negative returns experience. This mainly applies to young customers between the ages of 18 and 25 (60%) and 26 to 35 (57%) [9]. Never again a negative returns experience? Make sure that your web shop makes use of our service ReturnYourParcel. The consequences of Brexit Since UK voted to leave the EU, there is a lot of uncertainty and expected change to the eCommerce landscape. Nothing is certain yet. However, it is expected that the Brexit will have consequences in various areas within eCommerce in the UK [10]. For example, it will affect the rates and fees, because free trade between the UK and the EU and other EU-enabled countries will change with the arrival of the Brexit. It is likely to be more expensive for EU countries to ship to consumers in the UK than to customers in other EU countries. In addition, import rules other than those between EU countries and new border controls will delay delivery of online orders to British consumers. Furthermore, it may be that some UK shoppers start to feel uncertainty with looking abroad for products, because of the negative reporting surrounding Brexit. Ecommerce trends in the United Kingdom Digitalization has completely changed the way UK consumers shop. Currently, the UK is the third largest mobile commerce market in the world. Only China and the US have larger mobile commerce markets than the UK. M-commerce in the UK is worth €55,9 billion and is the fastest growing channel [11]. This is because that more and more consumers in the UK own a smartphone and because they have more confidence in the safety and ease of mobile purchases and payments. Therefore, it is also predicted that e-wallets will play an increasingly important role within e- commerce in the UK. If retailers want to sell their products to British consumers, it is important that they, in addition to the developments in the field of digitization, also respond to the sustainability trend. Research from inRiver shows that sustainability is a key element in today’s purchase decision process or UK online shoppers [12]. UK consumers are always looking for information about sustainability and the ways in which their products are made and shipped. They expect greater transparency and product information around sustainable purchases. 62% of UK online shoppers even indicate that they would reconsider buying if retailers better communicated about the environmental impact. 62% would stop using a brand due to its detrimental impact on the environment. View all blogs Martin Hooker founded Interpost and has led it as managing director since 1993. Interpost Ltd. is the wholesale subsidiary of the B2C Europe Group, which is based in Slough, UK. Within the B2C Europe Group, Interpost offers domestic and international mail solutions through postal operators such as PostNL, Eestipost and Swedenpost. Save on logistics costs and increase your turnover? Optimise your cross-border strategy and enter new e-commerce markets easily! Request a free consult Continue reading: Choosing a multi-carrier strategy is best for e-commerce logistics. Here’s why. How do you scale up your business while ensuring you provide the highest standard of shipping services? A multi-carrier strategy could be the answer. Read more Black Friday Cyber Monday 2021: tips for webshops With supply chain shortages and changing consumer behaviour, Black Friday Cyber Monday (BFCM) could be particularly stressful for online shops this year. As an entrepreneur, should you also want to participate in this trend, which has been on the rise in recent years? 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