Discover the British e-commerce market!

Demographics

The population of the United Kingdom in 2021 was over 67 million people. Moreover, out of them, over 59 million made online purchases in 2021, and forecasts predict this number to even rise to 62.1 million by 2025.

Average monthly salary in the United Kingdom

The British economy, in terms of GDP, was the second-largest in Europe in 2022. Only Germany surpassed it.

Meanwhile, the average annual salary in the United Kingdom amounted to 34,963 British pounds in 2023, which gives a monthly 2,913.58 GBP.

However, the average annual salary in London alone was 41,866 pounds (about 3,488.84 GBP).

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Access to mobile devices

Last year, there were nearly 60 million smartphone users in the United Kingdom, and in January of this year, nearly 98% of the population of the United Kingdom used the Internet.

Payment methods

The most popular payment method in the United Kingdom is card payments – both debit and credit. In 2023, 57% of domestic transactions were paid for using them.

Another popular method is also contactless payments. In 2020, British authorities increased the payment limit applicable to them to 45 pounds. Meanwhile, this method saw particular growth in connection with the Covid-19 pandemic. In 2021, 32% of consumers used contactless payments, and it is estimated that this option is offered by 91% of debit cards and 89% of credit cards.

Moreover, besides the above, 70% of payers at least once a month use virtual wallets, and 90% of consumers also opt for bank transfers. In 2021, about 4.6 billion of them were made.

Although cards are the most popular in the United Kingdom, cash should not be forgotten. However, it should be noted that this payment method consistently loses popularity. In 2021, 15% of payers used it.

Delivery methods and the largest courier companies in the United Kingdom

In the United Kingdom, 55% declare choosing home delivery because it is a convenient option for them. Conversely, for 40%, this choice is associated with the absence of fees.

The most deliveries of this type in the United Kingdom are provided by Royal Mail, which accounts for about 35% of the delivery volume, making it also the most commonly used provider in this country. Besides Royal Mail, the most popular delivery providers also include:

• Amazon Logistics with 15% of the market share in deliveries,
• Hermes, achieving about 10%,
• UPS, with a result of 8%,
• DHL, with 7%.

The above five companies together account for about ¾ of all deliveries in the United Kingdom.

Value of the British e-commerce market

The British e-commerce market generated 133 billion British pounds in revenue in 2022. It is also the largest e-commerce market in Europe and the third-largest in the world. The United Kingdom is only surpassed by China and the United States.

The most popular marketplace platforms in the United Kingdom

The undisputed leader among marketplace platforms on the British market is Amazon.co.uk. In January of this year, this site recorded over 369 million visits, which lasted an average of 6 minutes and 10 seconds.

The second place in the ranking of marketplace platforms on the British market is taken by eBay with a result of 229.9 million visits and their average length being 8 minutes and 40 seconds.

In turn, the platform Etsy (474.1 million views with an average visit length of 5 minutes and 48 seconds) closes the podium, and just outside of it places Argos (43.8 million visits with an average length of 4 minutes and 44 seconds).

Product categories

In 2022, the fashion industry accounted for the most transactions, as much as 31%, in the British e-commerce market.

The second place, with a result of 19%, was taken by the segment “toys, hobbies, and DIY,” and the third place with a result of 18% was taken by the category “electronics and media.”

What to remember before expanding into the British Market?

Returns

Returns are a natural part of e-commerce. However, in the United Kingdom and many Western European countries, returns collected by the courier are not common practice. Therefore, to ensure comfort for the customer who wants to make a return, it is worth having in your offer the services of Royal Mail, about which we wrote earlier, and which is the most popular provider in the United Kingdom. Royal Mail send/return parcel points are virtually “on every corner.”

Add that courier returns are possible, however, their price is usually very high, which makes them reluctantly used.

Moreover, before expanding to the United Kingdom, it is worth considering establishing a British return collection point. For customers, this may be a more comfortable solution, due to the lower prices of domestic shipments than sending a package back to Poland.

Shipping dangerous goods

If you run an online store, whose assortment includes goods that may be considered dangerous, it is worth preparing properly for their transport in advance. Examples might include replicas of bladed weapons or equipment used in ASG (Air Soft Gun) games.

Although we are talking about replicas, whose ammunition is plastic balls, wanting to transport such goods abroad, they must be properly packaged and meet the procedures in force in the country from which they are sent, as well as the carrier’s safety procedures.

It should also be kept in mind that regulations in the destination country must also be met. Therefore, it is also necessary to become familiar with them and meet the resulting requirements, e.g., provide the required documents in the country of delivery, or mark the package with the appropriate code. If we fail to meet such obligations, the goods may be detained or returned.

Adapting the order form

Entering the British market, it is also worth adapting the order forms to its requirements, because copying and translating the Polish template may not be sufficient.

Examples of elements that need to be adapted to British customers include, among others, the telephone number, which in the United Kingdom consists of 10 digits, or the address, which includes the name of the county.

Tax obligations related to expansion into the British Market

Entering the British market is often associated with many questions regarding tax issues. However, we have already answered many of them in our previous articles. You will learn from them, among others:

• When do you need to register for VAT in the UK?
• What are the rules for mail order sales to the United Kingdom?
• How to tax VAT sales to a customer in the UK?
• What problems can occur during VAT registration in the UK?

If you have any questions related to VAT in the United Kingdom, do not wait! Book a consultation, and we will dispel your doubts.

British e-commerce market – summary

Entering any new market, including the British e-commerce market, can be challenging. However, the risk associated with failure or making mistakes can be minimized with proper preparation, such as early market research and preparation of an appropriate expansion strategy.

This should also cover tax issues, which are an integral part of conducting business in the United Kingdom, especially e-commerce business. If you need support in aspects such as registrations, settlements, or VAT and VAT OSS declarations in EU or UK countries, or are looking for support in e-commerce accounting, schedule a consultation and tell us what the challenge is, and our specialists will take care of the rest!