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E-commerce in the UK: World leader with record growth

by Editorial Office

The UK is one of the world’s leading e-commerce markets and is considered the most advanced market in Europe. Although international suppliers will have to adapt to new trade rules following the UK’s exit from the EU, cross-border business is still worthwhile: in 2020, estimated online retail sales rose to 222 billion euros – with cross-border purchases accounting for a growing share of this figure.

British e-commerce during Corona

Online shopping is very popular in the UK and is experiencing further impetus during the pandemic: Meanwhile, 95 percent of Britons already surf the Internet, and nine out of ten users also shop online.

According to the Office for National Statistics (ONS), total e-commerce values increased by 46.1 percent in the Corona year 2020 – the highest annual growth since 2008. This does not only make the UK e-commerce market the largest in Europe by far. In terms of the forecasted per capita sales of EUR 2,666 in 2020, the UK is the world’s top e-commerce market after China and the US.

Cross-border sales in the UK

Although the majority of UK online purchases are made domestically, British consumers are increasingly opting for goods shipped from abroad. Last year, 40 percent of online shoppers purchased products from around the world. Thus, the upward trend of recent years is continued: the total number of Britons making cross-border online purchases rose by four percent in 2020.

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Local consumer demands: from payment to delivery time

In order to inspire local consumers to make cross-border purchases even after the UK’s exit of the EU trading community, non-UK providers are faced with new tasks. If they want to keep up with local offers, they have to meet the demands regarding delivery time – despite changed trade regulations. INTERNAL LINK: Brexit info The expectations of the British with regard to customer service are high overall, including  the after-sales area. Last but not least, country-specific payment preferences must be taken into account. In the UK, the use of credit and debit cards continues to dominate (51 percent), while 44 percent of shoppers already use online payment methods such as PayPal.

Mobile commerce in Great Britain

Eight out of ten Britons reach for their cell phone in their quest for a convenient shopping experience. But while British online shoppers use their smartphones for purchases during the day, they prefer to shop using their desktops in the evening.

Particularly popular segments are clothing and sporting goods, followed by electronic goods, books and audiobooks. Online purchases by local consumers are primarily determined by price and quality: More than half of consumers (54 percent) say they look for price advantages when shopping online, according to the Ecommerce Foundation’s United Kingdom 2020 Country Report. They also assume that there is a greater variety to choose from online (51 percent). Almost every other consumer (46 percent) regards online and mobile shopping as a leisure activity.

E-commerce platforms in the UK

Dominant marketplaces for cross-border commerce in the UK are Amazon and eBay. Both platform operators reported significant growth in 2020. Amazon UK reported more than $26 billion in sales, an increase of around 50 percent year-on-year.

Fruugo is also proving to be an ideal place for international expansion: the online marketplace is trying to simplify the cross-border sales process for merchants and was recently listed as the second-fastest growing e-commerce website in the UK by the Financial Times.

However, due to Brexit, there are some changes to marketplaces in terms of VAT processing and fulfillment offerings that international sellers should be familiar with.

Profiting well prepared from the e-commerce boom

Online retailing in the UK is still on the up: it’s a good time for international suppliers to expand. However, entering the local e-commerce market should be done carefully. Experienced service providers such as Hermes Germany can help overcome Brexit-related hurdles and handle customs and cross-border logistics processes quickly and professionally.

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