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E‐Commerce » Trends, Tips & Facts, Country Focus | 01/31/2014

UK becomes world’s largest e-commerce exporter

 

According to a new report by OC&C Strategy Consultants, the British online retail sector generated an estimated trade surplus of £720m in 2013 – with an increasing percentage of total online sales coming from overseas customers.

‘Global Retail E-mpire’ was produced in collaboration with Google and examines online sales trends in the domestic and international markets. As the e-commerce industry continues to develop, the report also aims to predict the composition of online sales by 2020.

The importance of the Western European e-Commerce market
In 2012, international transactions were worth £4bn to the British economy, or 14% of total online sales, while the number of customers outside the UK searching online for British brands has been growing on average by 46% a year since 2010.

The ‘Global Retail E-mpire’ study predicts that by 2020, international sales will constitute 40%, or an estimated £28bn, of online retail sales in Britain. Western Europe currently makes up half of the global e-commerce market (alongside the USA) and it may prove to be a crucial trading area in 2020. Helped by the European Union’s free movement policy, online sales between countries in Western Europe are expected to reach £79bn by 2020, with £9.8bn destined for British brands and retailers.


“E-commerce has transformed what was once a game anchored in local markets - with retailers choosing to expand internationally when they reached saturation nationally.”

 

Flying the flag in the e-commerce sector
British luxury and fashion brands are the standout sectors for e-commerce, with several well-known retailers, such as ASOS and Topshop, receiving over half of their traffic internationally. However, the report has found that small and mid-sized retailers are making the biggest strides into the international market – while the ‘megabrands’ attract 13% of their overall online searches from overseas, smaller companies can boast 47% in comparison.

Anita Balchandani, Partner at OC&C, said: “Retailers need to bear in mind that international e-commerce requires new capabilities. Whether it’s the ability to respond quickly and tailor to local consumer demand or navigate international regulation and pricing, international e-commerce requires a healthy dose of all of these skills. Notwithstanding these challenges, there are a number of countries which present UK businesses with growth that is relatively easy to access.”

The global e-Commerce market
It is expected that British e-commerce sales in Western Europe will reach £9.8 billion in 2020 from £1.5 billion in 2012. With favourable trading conditions as a result of low barriers to entry through the European Union and ease of delivery across the continent will see significant cross-border sales activity.

Elsewhere in the world it is expected that the emerging economies of Central and Eastern Europe and Asia will continue to expand with sales expected to reach £6.9 billion by 2020 from £400 million in 2012 and £4.5 billion by 2020, up from £400 million in 2012 respectively.

As the UK’s single biggest international market for online goods North America is expected to continue to grow with sales expected to increase from £0.8 billion in 2012 to £2.7 billion in 2020.

Peter Fitzgerald, Director at Google, said:  “We have seen a significant increase in the volume of searches for British retailers and brands coming from overseas. The majority of non-UK searches are currently coming from Europe, followed by North America and Asia, driven by the increased popularity of British brands abroad. Retailers can use search data to identify pockets of demand and move quickly to meet the needs of customers.”

To find out more about this report and its findings visit the OC&C Strategy web site here.

 

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