March 7, 2021

UK Ecommerce Shows Fastest Acceleration … Ever

Dr Peter Mowforth

Anyone thinking that online trade has peaked, think again.

The UK Government Office of National Statistics have just announced that the total UK turnover for 2018 is a whopping £688 Billion. If you class ecommerce as a sector then that makes it larger than oil and gas and food and drink and pharmaceuticals …. all combined.

Not only is it massive, during 2018 online trade grew by 18% from £582 billion the previous year making it the largest annual growth seen since comparable records began.

Within these numbers there is also a progressive shift in the underlying technology used for ecommerce. Ecommerce is generally split between EDI and web-based approaches. Since 2014, EDI growth has increased by £37 billion. Over the same period, web-based ecommerce grew by £138 billion. To put £138 billion into context, that is more than double the size of the entire military expenditure of Russia.

Businesses with 10 or more employees showed growth of 17%. This means that smaller companies are showing slightly higher rates of ecommerce growth than in larger companies. The number of micro-enterprises far exceeds the number of larger businesses with 1,000 or more employees. For this reason, micro-enterprises have a larger impact on the proportion of businesses making ecommerce sales.

For the first time, the ONS looked at the split between businesses making sales through their own website compared to third party websites such as the marketplaces run by companies such as Amazon or eBay. According to the ONS, 10.7% of businesses made sales through their own websites with around half that number, 5.6% of businesses, selling products through third party sites.

In terms of what types of businesses are making the best use of ecommerce, the report shows that businesses such as wholesale, retail, manufacturing, IT, transport and storage make over 40% of their sales online. Meanwhile, businesses with a focus on food, accommodation, utilities and construction struggle to have more than 10% of sales over the Internet.

The ONS figures show that smaller businesses make proportionately more use of social media. Worryingly, less than half of micro businesses even have their own website.

Around 20% of larger businesses have suffered major ICT security issues during 2018.

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