March 7, 2021

The world economy and Scotland’s ecommerce champions place within it

Dr Peter Mowforth

Over the past year it would have been easy to think of doom and gloom when you read about the economy. However, if you look at the data rather than headlines then it’s a different story.For example, if you look at world growth product (The cumulative sum of all national gross domestic product figures) then you would be hard pushed to find an equivalent five year period of such relative stability coupled with steady growth:

While it’s the developing markets such as India and China that are contributing most, the older established economies of Europe and N.America remain stable and positive. World stock markets are also stable and growing (ref) and we are at a time in history when there have never been such a small proportion of the world’s population involved in war (ref).Turning to ecommerce, according to eMarketer, Chinese retail ecommerce will rise to $1.132 trillion in 2017. This compares to equivalent retail ecommerce figures for the US ($450.81bn), UK ($110.07bn) and Japan ($95.33bn). It’s worth noting that when you factor in procurement and B2B ecommerce the Chinese advantage is much less pronounced (according to the ONS, UK retail ecommerce only represents around 20% of the overall figure).

Overall then, while global growth is progressing at around 3.5%, ecommerce growth is progressing at around 20% - i.e. around six times faster than the rest of the economy. It’s worth noting that if around a quarter of the retail economy is growing six times faster than the remaining three quarters of the retail economy then the remaining three quarters of the retail economy must be close to flat (if not slightly negative).One important factor with the online/offline omnichannel world is that the offline business benefits from having a strong online presence. For example, the Glasgow-based Wholesale Domestic bathstore business is growing at around 20% on top of an eight figure turnover (ref). Importantly, their ecommerce business is by far the fastest channel for growth which in turn has led to increased footfall in their physical bathstore. Their Hillington-based bathstore is already the largest in Scotland and is about to get a lot bigger. The story here is that success breeds success and it’s ecommerce that’s the primary driving factor.On the 5th July, Scotland’s growth figures were announced which indicate an impressive 0.8% growth over the last quarter (ref). This is great news and should provide an impetus for still better growth figures in the future. To help make this happen we might all feel inspired by how Scottish businesses are now seeing momentum being led by those investing in online trade.

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