1. Overview of the UK e-commerce market

The UK is the largest e-commerce market in Europe and the fourth largest in the world. Over the past three years, the UK's e-commerce sales share has continued to grow, and revenue is expected to reach $166,707.6 million in 2023, ahead of Germany.

According to the European E-Commerce 2022 report, UK e-commerce sales increased to €162.26 billion (£140 billion) in 2021. Between 2022 and 2024, UK e-commerce growth is expected to continue at 4% per year.

This article will briefly introduce some knowledge you need to know about entering the UK e-commerce market, including the current status of e-commerce development in the UK, market prospects, popular online shopping platforms, etc.

2. Background and current situation of e-commerce development in the UK

According to the latest data from the International Telecommunication Union (2021), the current internet penetration rate in the UK is 96.7%, a figure that has risen steadily since 90.7% in 2018. The UK's internet penetration rate is ahead of the European average (93.8%) and the global average (87.8%).

Online shopping user penetration is also rising. According to Statista, 81.5% of UK internet users are now online shoppers, up 7.5% from 74% in 2018. The largest year-on-year increases were seen in 2019 and 2020 over the past few years. The UK's online shopping user penetration rate is also higher than the European average (64.1%) and the global average (49.2%).

But it is worth noting that the growth rate of British consumers' e-commerce shopping expenditure is slowing down. According to data from the British Internet Retail Industry Association IMRG, British e-commerce sales have fallen for two consecutive years since the lifting of the epidemic blockade in 2020, but are still higher than in 2018 and 2019. This is mainly due to the resumption of offline shopping after the epidemic and the increase in online shopping prices.

3. Prospects of the UK e-commerce market

It is worth noting that various survey data show that the online shopping rate of British consumers is higher than that of other European countries.

Survey data shows that the British have more online shopping habits than other European countries. In the UK, 62.84 million people are Internet users (accounting for 96% of the total population), and nearly 60 million people shop online. 60.4% of British consumers shop online once a week, while the world average is 58.4% and Spain is 54.4%.

The latest research by payment company Klarna also shows that the UK is the only country in Europe where most people choose to shop online rather than in physical stores. More than half of British consumers believe that online shopping can get better prices, more choices and save time.

According to Statista, smartphones (65%) are the main online shopping channel for British people, followed by laptops (50%), tablets (33%), desktop computers (24%) and smart TVs (9%). Online shopping via smartphones in the retail industry is expected to exceed £100 billion by 2024, double the amount in 2020.

According to the Office for National Statistics, certain categories of products such as clothing, household appliances, sports equipment, and games and toys are being bought more and more in the UK.

4. Mainstream e-commerce platforms in the UK

According to a survey report by RetailX, Amazon, eBay, Etsy, British retailers Argos and Tesco occupy the top five of the TOP100 list of website traffic in the UK. 92% of the traffic of the TOP100 e-commerce websites comes from the first 50 platforms, while the website traffic of the last 50 platforms only accounts for 8%.

According to monthly traffic statistics released by SimilarWeb, the most visited e-commerce website in the UK is Amazon, followed by eBay, Argos and Etsy. Other most visited e-commerce stores in the UK include Temu, Tesco, Currys and Asda.

1. Amazon

According to Semrush data, Amazon is the most visited e-commerce and shopping website in the UK. The UK is Amazon's second largest market in Europe, second only to Germany. In 2022, Amazon also announced plans to invest more than 1.8 billion pounds in the construction and operation of data centers in the UK through Amazon Web Services over the next two years.

2. eBay

eBay is an online auction and shopping website that allows people around the world to buy and sell items online. The UK is one of eBay's main sales sites. In the UK, eBay's traffic is second only to Amazon.

3. Etsy

Etsy is the world's largest creative market e-commerce platform. Data surveys show that about half of the website's traffic comes from the UK, Europe, Canada, Australia and other places. As of August 2023, Etsy's total visits reached 463.5 million times.

4. Argos

Argos is one of the most visited retail websites in the UK, employs approximately 30,000 people, receives over 7 billion visits to its website each year and sells over 60,000 products.

5. Tesco

TESCO is a large supermarket chain in the UK and the largest retailer in the UK. It is the third largest supermarket group in the world after Wal-Mart (USA) and Carrefour (France). Currently, TESCO is actively expanding its online retail business.

5. British Consumer Profile

According to RetailX, in the UK, consumers of all ages and income levels shop online, with a lower percentage of consumers aged 18 to 24 (14%) and 55 to 64 (18%) compared to those aged 25 to 54 (23%). In addition, low-income consumers shop online at almost the same level as middle- and high-income consumers.

In terms of gender distribution, the proportion of female online shoppers in the UK (51%) is slightly higher than that of male online shoppers (49%), which is consistent with the UK's population structure.

In terms of online shopping frequency, people who shop online more than once a week account for the largest proportion, increasing by 4% year-on-year to 47% in 2022; followed by people who shop online more than once a month, increasing by 1% year-on-year to 33% in 2022; the number of people who shop online more than once a day decreased by 2% to 8%.

UK consumers are spending more online every month, with 53% spending between £10 and £100 online per month in 2021, compared to just 34% in 2022. At the same time, the number of people spending in a higher range is also rising. In 2022, 10% of consumers will spend between £500 and £1,000 online per month, while 4% will spend more than that.

When asked about their spending attitudes in 2023, 62.6% expected they would maintain similar spending levels on online shopping as in 2022. Among those who buy both online and in-store, the majority tend to buy offline (72.4%) and online (27.6%).

When it comes to online shopping drivers, UK consumers’ top priorities are home delivery (46.9%), cheaper prices (41.9%) and time saving (38.9%). Other important factors include good deals (32.4%) and 24-hour availability (23.2%).

Smartphones are the preferred channel for online shopping in the UK, with 45.3% always using them and 27.9% often using them. Laptops (always 14.2%, often 23.3%) and desktop computers (always 10.3%, often 17.3%) are the most popular.

Advice on meeting the needs of UK consumers

1. Mobilize the shopping experience

Demand for digital shopping is rising among UK consumers, and so is the demand for mobile shopping. Providing customers with mobile-based features, including in-store navigation apps and apps they can use to track the status of their orders in real time, can help merchants meet the expectations of these mobile consumers and boost sales.

2. Offer contactless options at the point of sale

Digital wallets are continuing to grow in the UK’s payments ecosystem and UK merchants must ensure they offer in-store customers the contactless payment options they want to maximise their conversion potential.

3. Ensure door-to-door delivery and try to offer in-store pickup

It’s unclear whether the low demand for in-store pickup among UK consumers is because there’s little demand or because consumers are unaware of the existence of such services, so offering this delivery option may help improve conversion rates.

6. Product selection trend

Relevant survey data shows that fashion is still one of the largest online shopping categories in the UK, with online sales reaching 36.2 billion pounds in 2022, followed by electronics (21.6 billion pounds), beauty and personal care (11.4 billion pounds) and furniture (5.1 billion pounds).

According to Statista, the categories of beauty and personal care (+20.5%), electronics (+17.3%), and “other” (+38.5%) saw the largest spending increases in 2020. Since then, spending growth has slowed or declined.

Online spending on electronics fell 1% in 2021, followed by a further 9.8% drop in 2022; sales of beauty and personal care continued to grow, but at a slower pace, in 2021 (+6.3%) and 2022 (+6.5%).

According to research by RetailX, in 2022, British consumers will shop a wide range of goods online, with 62% and 61% of consumers shopping for groceries and fashion online respectively, and more than 50% of consumers buying cosmetics, but a lower proportion of consumers buying books or consumer electronics.

Statista's research results show that consumers who shop online for fashion tend to spend more on average than those who shop for other types of products. Although a smaller proportion of consumers shop for consumer electronics online, their spending is high, peaking in 2020 and has been declining since then.

In the coming year, Britons will spend more on groceries, clothing and fashion, home decoration and consumer electronics.

7. Main Marketing Nodes

In the UK, the Christmas season is the main peak season for online shopping. Black Friday, Cyber ​​Monday and Boxing Day are the holidays with the highest online shopping sales in the year. Online consumption levels are also high on Valentine's Day, Easter, Mother's Day and Father's Day, as well as the back-to-school season before the start of the new school term.

However, it is worth noting that the research shows that British consumers' online shopping consumption on Valentine's Day in 2023 fell by 2%, the average order value fell by 16%, the shopping cart size increased by 12%, and the number of online shopping orders increased by 14%. This shows that British consumers are buying more low-priced goods.

Overall, due to inflation, the purchasing sentiment of British consumers in 2023 has been affected to a certain extent, but judging from the high online shopping rate in the UK and its large scale and relatively complete facilities, the UK e-commerce market still has room for growth to be explored in the future.