E-commerce is the facilitation or trading in products or services using computer network. Such computer networks include online social network or the internet. This kind of trading draws on technologies as automated data collection, electronic funds, internet marketing, mobile commerce, supply chain management and electronic data interchange (EDI). The UK is one of the leading countries in the western world in internet penetration and ecommerce. The country has a population of 64.91 million people (Itu, 2016). Out of these, 92% are avid internet users. Such a high number of internet users create a huge potential for ecommerce businesses. In the year 2015, 77% of the UK internet users purchased items online.
Retail research in the UK stated that in 2015 alone, online sales grew by 16.2% with current predictions stating that growth in online sales in 2016 is expected to be about 14.9% (Retailresearch, 2016). The growth is shown by the amount of money that was exchanged which topped $170 billion in 2015 alone. Internet penetration in the country has aided growth in online sales due to its effectiveness and simplicity. Additionally, the fast internet provided in the UK ensures that buying something is at the fingertips of a consumer. A phone can easily be used to purchase any item one wishes to or even sale a product. Center for Retail research shows that in the United Kingdom in 2014, online sales accounted for about 10.7% of all the retail sales (The National Archives, 2016).
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There are many big companies that have also stationed itself in the United Kingdom. One such company is Amazon which is the biggest online retail company in the world. The biggest players in the UK’s online retail market include eBay, Tesco and Amazon. Amazon accounts for about 16% of the total market share followed by Tesco at 9% and then closely by eBay at 8%. Other online retail companies in the UK include play.cm, Asos, Next and John Lewis and Argos (BuddeComm, 2016).
Ecommerce in the UK has been boosted by the launch of an ecommerce platform by UK’s leading ecommerce provider Actinic. For those people using mobile phones or tablets, the cloud-based solution has optimized online sales and purchase. The company has more than 10,000 customers who purchase and sale items frequently online (Ecommerce News, 2016). In the last quarter of 2015, tablets and smartphones accounted for more than half of online retail sales. This shows how mobile based shopping is important in the ecommerce sector in the United Kingdom.
Since the year 2003, internet speeds in the UK has been increasing. Currently, upload/download speeds are offered at 256kbit/s, 512kbit/s, 1Mbit/s or 2Mbit/s. Areas like London Aldgate region have an upward/download speeds of up to 8Mbit/s ADSL services (Ofcom, 2016). Since the year 2006, many companies which initially offered different services such as television and telephone subscriptions began to offer broadband services. Despite the growth of internet penetration in the UK, some rural areas still suffer from connection speeds as low as 256kbit/s which can occur during daytime and speeds of more than 1 Mbit/s during the night.
Ecommerce in the UK depends on a number of services to make transactions successful. Credit card is the most used method of payment for online purchase. Forty percent of all online transactions were paid using credit card in the UK. Debit cards are second in line amounting to about 3 in every 10 transactions. PayPal which is a giant in online payment is third amounting to 21% of the total transactions carried out (Ecommerce News, 2016). The three payment methods account for 96% of the total online transactions. The simplicity and effectiveness of these three online payment methods has enabled the UK to be leading ecommerce country in Europe.
One of the problems in the ecommerce sector in the UK is currency fluctuations. Many ecommerce sites in the UK use US software in one way or another such as hosting provider, an abandoned basket, or the platform itself. Some of these software charge in pounds while others in dollars. The problem arises when the pound is weak. In such a case, the immediate cost of products increases. Physical retailers also suffer from this problem. Shipping of the products become expensive if the pound is weak. Shipping cost will include the cost of the goods itself as well as operational expenses for some products. The second problem is legislation. The cookie law for example has been an issue for many people who transact online. After Brexit, the UK cannot benefit from combined investment with the EU (Ecommerce News, 2016).
The biggest opportunity for ecommerce sector in the UK is the number of big online corporation offices. Some of these companies include Samsung, Amazon, eBay and Microsoft. These are big technology companies that can aid in ecommerce. To conquer the online community, a clear vision, planning and execution is needed. Having such companies in the UK can make it easier to strike deals. Additionally, many US businesses have chosen the UK as the home of its business in Europe. Being an English speaking country makes it even easier to communicate with people from other parts of the world. These are the opportunities that the UK should concentrate on to establish itself as the leading ecommerce country in the world.
- BuddeComm. (2016). Global Digital Economy – E-Commerce and M-Commerce Key Trends and Statistics – Budde.com.au. Retrieved 30 October 2016, from https://www.budde.com.au/Research/Global-Digital-Economy-E-Commerce-and-M-Commerce-Key-Trends-and-Statistics
- The National Archives. (2016). [ARCHIVED CONTENT] UK Government Web Archive Webarchive.nationalarchives.gov.uk. Retrieved 30 October 2016, from http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/rsi/retail-sales/december-2014/sty-overview-of-internet-retail-sales-in-2014.html
- Ofcom. (2016). Average UK broadband speed continues to rise – Ofcom.org.uk. Retrieved 30 October 2016, from https://www.ofcom.org.uk/about-ofcom/latest/media/media-releases/2013/average-uk-broadband-speed-continues-to-rise
- Itu. (2016). Itu.int. Retrieved 30 October 2016, from http://www.itu.int/en/ITU-D/Statistics/Documents/statistics/2016/Mobile_cellular_2000-2015.xls
- Retailresearch. (2016). Online Retailing Research – Centre for Retail Research, Nottingham UK. (2016). Retailresearch.org. Retrieved 30 October 2016, from http://www.retailresearch.org/onlineretailing.php
- Ecommerce News. (2016). Ecommerce in The United Kingdom – Ecommerce News. Retrieved 30 October 2016, from http://ecommercenews.eu/ecommerce-per-country/ecommerce-the-united-kingdom/
