The coronavirus pandemic saw an extraordinary surge in e-commerce exports around the world between 2019 and 2021, but online shopping is here to stay, it’s not just a passing trend. Indeed, cross-border e-commerce sellers can now take advantage of even more opportunities than before, including the UK market which is particularly worthy of attention. However, we as a multi-vendor e-commerce logistics chain, has recently found that cross-border selling into the UK is still plagued by export problems. This is especially said for those sellers who have just entered the UK market.
1)
How bright is the future for the UK e-commerce market?
2)
What should cross-border sellers do to prepare for the big VAT reform?
3)
In view of the new EU VAT rules, which came into effect on January 1 2022, how will the UK market continue to operate?
4)
Looking ahead to the period 2022–2025, what opportunities can be seized in the booming UK market?
5)
What are the most viable options?
Covid Analysis
Cross-border sellers want to understand the market landscape more thoroughly. The following text focuses on analyzing the opportunities and options presented by the UK market.
When the UK government ordered the closure of all non-essential retail stores in mid-2020 and again in 2021, as part of the strict national lockdowns, UK consumers who wanted to continue their regular purchasing habits could only do so online.
Even when high street shops reopened, the situation was far from normal: social distancing measures meant that queues were commonplace and there was limited foot traffic. In-store mask-wearing was strictly enforced. Much of the population continued to stay at home and many avoided shopping in physical stores altogether out of caution. It is no surprise then, that the popularity of e-commerce soared in 2021.
Jessica Zhou, EXELOT’s Business Development and Sales Director in China, said that the growth in annual parcel volume is a good indication of the degree of consumer demand. Most interestingly the conversion rate of e-commerce users in the UK is third only to Germany and the U.S.
Statistics
It has been estimated by Cybercrew UK that in 2021, UK consumers spent around £141.33 billion on online shopping ($192.12 billion) over the course of the year. E-commerce sales accounted for 36% of the total retail sales in the UK in November 2020. In 2020, 87% of UK consumers made online purchases, up from 78% in 2018. Clothing was the most popular online purchase category in the UK, with a 64% online purchase reach.
The UK has a long-tail economy, meaning the majority of its marketing efforts are mostly effective within small yet passionate market segments. In 2020, the UK in-bound parcel volume soared; Royal Mail released data for the fiscal year 2020-2021 showing that its revenue rose 9.8% during the reporting period, mainly benefiting from the rapid growth of the UK domestic postal service and the international GLS parcels business.
1.96%; UK: 1.88%. This is a very high conversion rate globally, indicating a high level of customer stickiness in the UK, outpacing Asian and South American markets (as well as most other European markets).
According to Datareportal, user penetration in the UK was 65.32 million individuals with an increasing expectation of up to 89.6% by 2025, while the average revenue per user (ARPU) will amount to £1,372.82, which strongly suggests that the e-commerce market will drive the spending of UK users over the coming years.
