Ecommerce is booming in the UK. And why is that?
Internet shopping in the UK is more popular than in any other country, according to trade.gov. The nation is also Europe’s most profitable ecommerce market.
If you’re interested in opening an ecommerce shop to serve UK shoppers, the market is ready for you! But there are several things you should take into consideration before jumping in. To take advantage of this trend, you’ll need to understand the foundational aspects of starting a business.
In this article, we look at more such trends, ways to start an ecommerce store, and how a 3PL can make the business easier, automated, and profitable.
Ecommerce in the UK statistics and trends
Today, ecommerce makes up 30% of the total retail market. A lot of the growth in retail sales started with the coronavirus pandemic. In 2020 alone, internet retail sales grew by 47%.
Ecommerce UK revenue forecast shows a compound annual growth rate (CAGR) of 8.4% in the 2023-2027 period. This would result in a future market volume of $243,961 million USD by 2027. These statistics show us the sheer potential of the UK ecommerce market.
But what are UK shoppers buying?
In 2022, most of the online orders were placed via mobile phones. Yet, more money is spent per order when UK customers shop via their computers. The average order value in 2021 was $125 on desktops, $102 on tablets, and $96 on smartphones.
Online customers in the UK also love access to product reviews, free returns, and free and sustainable deliveries
There is a growing trend to try at the store and purchase online. Click and collect is also a model that is becoming increasingly popular among UK shoppers.
Even after Brexit, there is still huge potential for cross-border shipping. In fact, 36% of British online shoppers buy from other countries.
To fortify their logistics operations and counter inflation, more online retailers are establishing fulfilment centres in Europe, updating their shipping policies, offering multiple shipping options, and talking to their suppliers to mitigate risks of supply chain disruptions.
UK ecommerce rules and regulations
Here are some laws to consider when starting or establishing an ecommerce company in the UK:
- E-Commerce Regulations 2002: Commercial website operators have the responsibility to provide shoppers with specific information about themselves and their services.
- Consumer Rights Act 2015: It safeguards UK consumer rights by featuring statutory implied terms in consumer contracts and outlines the remedies for contract breaches that customers can avail of.
- Consumer Protection from Unfair Trading Regulations 2008: This regulation prevents unfair practices by traders, including any misleading actions or omissions. This document also has a “blacklist” of prohibited commercial practices.
- Provision of Services Regulations Act of 2009: As per this regulation, traders need to share specific information with customers. Also, while handling complaints, they need to meet certain standards.
- UK GDPR: The General Data Protection Regulation (GDPR) is all about protecting shoppers and website users’ personal data.
- Privacy and Electronic Communications Regulations 2003: This regulation is concerned with direct marketing via electronic communication.
- Online Intermediation Services for Business Users Regulations 2020: This regulation highlights the obligations of providers of online platforms or search engines used by businesses to reach consumers.
- Intellectual property rights (IPR): UK is very serious about IPR protection (of patents, designs, trademarks etc.) and its enforcement mechanisms are as solid as that in the United States.
Top 4 ecommerce platforms and websites in the UK
As you’re considering opening an ecommerce store, you should be aware of the various platforms and retailers that exist.
The largest player in the market is Amazon UK. Its revenues of $17,078 million USD in 2021. This is followed by Tesco, which had revenues of $7,654.4 million USD and Sainsburys with revenues of $7,555.2 million USD.
Other top players in the UK ecommerce solution market are eBay UK, Asos, Currys PC World, Gumtree, Argos, and John Lewis & Partners.
In this section, we provide information on the top ecommerce platforms to use with their costs, advantages, disadvantages, and so on.
With an estimated 220.7 million monthly visitors, this is the UK’s top-ranking ecommerce site. You can list your goods on this ecommerce platform and sell everything from electronics and toys, to furniture and devices.
Here are details of the plans they offer to retailers:
*Information in this table has been sourced from the Amazon website.
Meanwhile, in terms of fulfilment and storage, you only pay for the services you use.
If you need a very customizable and scalable ecommerce platform then Shopify’s long list of features and extensions and app market is perfect for you.
A one-stop shop for ecommerce, Shopify predicts your business’ website needs. Additionally, Shopify apps improve business control and efficiency, be it scaling via multi-channel integration options or improving communication via automated SMS and email marketing.
Another perk of this ecommerce brand is its clean and intuitive UX that is free of jargon and complex workflows, making online store creation simple. It’s no wonder that Shopify holds 20% of the market share in the UK.
It offers a free three-day trial and the pricing starts at £19 per month. The plans that Shopify offers are as outlined below:
|£19 per month (billed yearly)||£49 per month (billed yearly)||£259 per month (billed yearly)|
*Pricing as per the Shopify website.
Much like Amazon, eBay is a marketplace for goods from a variety of categories. It has an estimated 146.3 million visitors per month.
The UK has 25% of all eBay sellers. And it generates net revenue worth £1.35 billion in the region.
eBay mostly lists sellers who retail second-hand items or cheap household goods.
|Pay as you sell||£27 a month||£77 a month||£437 a month|
* Rates listed in the table above have been secured from the eBay website.
If you have a smaller inventory (20 SKUs or less), Wix might be a good option for your brand. It boasts design flexibility and customizability and an accessible help and support team.
Its app market has features that allow for sales via multiple channels including Facebook and other marketplaces and offer multiple payment options, secure checkout, and abandoned cart recovery.
With prices starting at £15 per month, it is ideal for smaller retail stores. And Wix has a free trial with a 14-day money-back guarantee.
|Business Basic||Business Unlimited||Business VIP|
|£15 per month (billed annually)||£20 per month (billed annually)||£27 per month (billed annually)|
How to start a UK-based ecommerce business
The people of the UK love to shop online. And if you want to capitalise on this trend, here is a step-by-step guide to starting an ecommerce store in the region.
Look for product opportunities
Certain products are only available in some parts of the country. Find your product niche, be it in fashion, health and beauty, home and garden, consumer electronics, or travel services. So when you start to sell, you will do so in a low-competition blue ocean and not a cluttered red sea.
Know your customers, the local legislation, the competitors and everything there is to know about the UK ecommerce market. This information will come in handy when you wish to strategize and grow your business.
Choose a platform, name, and logo
Branding is everything when it comes to a new retail company. Choose a relevant and catchy brand name and logo. And pick the ecommerce platform that best suits your needs to act as your online storefront. You could also integrate your inventory management systems and billing platform into this portal.
Check your legal compliance
When you sell and ship goods, you need to be careful that you are not breaking any rules. For instance, you cannot send my air any goods with lithium-ion batteries in them. To ensure you are legally compliant, be sure to speak to your legal expert and shipping partner.
Choose a shipping partner
To win the supply chain game, you need to outsource your logistics and transport to a third-party logistics company such as ShipBob. They take the stress of supply chain and inventory management off your shoulders so that you can focus on what is really important, selling your goods.
How can 3PLs help ecommerce businesses?
UK internet shopping is on the rise, and merchants who want to take advantage of this trend should consider a 3PL like ShipBob.
Whether you are shipping from UK (or any country in the world), ShipBob can help with everything from order fulfilment, picking and packing, warehousing, and inventory management to returns management, and more.
By automating the supply chain workflows, we not only help your online business save on time (otherwise spent on mundane and repetitive tasks) but also free up your time to make much more money.
Get started with ShipBob
If your UK-based ecommerce business needs a fulfilment partner, connect with our team to see if ShipBob is the right fit for you.
Ecommerce in the UK FAQs
Below are answers to the most common questions about ecommerce in the UK.
How do I start an ecommerce store in the UK?
- Choose your market niche
- Create a brand
- Create an online store on portals like BigCommerce, Amazon, or Etsy
- Purchase inventory from suppliers
- Partner with a 3PL like ShipBob to manage the entire supply chain
- Start selling
What are the advantages of ecommerce in the UK?
Ecommerce is a fairly advanced concept in the United Kingdom, it’s as powerful as offline stores. 82% of the nation’s demographics have purchased at least one product online in 2021. The nation is one of the largest online shopping markets. The average shopper’s spending keeps increasing year over year. The shoppers are comfortable using a credit card, debit card or PayPal.
What are the best ecommerce sites in the UK?
Amazon, Tesco, eBay UK, Asos, Currys PC World, Gumtree, and Argos are some of the best ecommerce website in the UK.
How much does it cost to start an ecommerce business in the UK?
Each ecommerce business is unique. So, it can cost between £2,000 to £20,000 to start an ecommerce business in the UK.
How can ShipBob help with UK ecommerce?
ShipBob is an end-to-end supply chain management platform. We can support your UK ecommerce business with order fulfilment, picking and packing, warehousing, and inventory management to return management.