Europe and Asia set to drive UK online sales
Online sales generated by UK retailers from international markets are expected to soar sevenfold to £28 billion by 2020, according to new research published today by OC&C Strategy Consultants in collaboration with Google.
Whilst in 2012 online sales from outside the UK were worth £4 billion and made up 14% of total online sales, the OC&C and Google research predicts that international sales growth will outpace domestic growth to make up 40% of total online sales by 2020.
This increase in the international sales of British goods by 2020 will come from across the globe, and represents a promising pool of opportunity from a range of geographies:
Sales in Western Europe are expected to soar to £9.8 billion in 2020 from £1.5 billion in 2012.
As the emerging economies of Central and Eastern Europe and Asia continue to expand, sales are predicted 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.
North America will continue to be the single biggest regional market for British online goods, with sales expected to increase from £0.8 billion in 2012 to £2.7 billion in 2020, but the growth rate will be slower than other countries.
The OC&C and Google study shows that the number of consumers searching online for British brands and retailers from outside of the UK is growing on average by 46% a year since 2010. Flying the flag for British online retail abroad are well-known brands, such as – Asos, Burberry, Jimmy Choo, Net-A-Porter, The Outnet, Topshop and Wiggle, who already receive over half of their traffic from overseas.
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.”
The research reveals that many smaller UK-based retailers – such as Farfetch, Isabella Oliver, Surfdome and Corsets UK – are embracing international opportunities more rapidly than their larger counterparts. Small and mid-sized companies currently receive nearly half (47%) of their online searches from overseas, tend to ship to more countries and offer multi-lingual sites. Conversely, only 13% of online searches for retailers with turnovers of more than £250 million come from outside the UK.
Anita Balchandani, Partner at OC&C, said: “E-commerce has transformed what was once a game anchored in local markets - with retailers choosing to expand internationally when they reached saturation nationally - into one where they can pursue internationalisation at the same time as domestic expansion. It is perhaps no surprise that companies like Amazon and eBay now generate about half of their revenues from international markets in a fraction of the time that it has taken the likes of Walmart and Tesco”.
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