Future drivers 2023 - 2024: The eCommerce economy (shorts)
by Gosia Furmanik on May 10, 2023
The ecommerce economy has been growing rapidly in the UK and the EU in recent years, driven by factors such as changing consumer behaviour, technological advancements, and the COVID-19 pandemic. This analysis will provide an overview of the ecommerce economy in the UK and the EU in the last 2 years, including its size, growth rate, and key trends. We will also explore the challenges and opportunities facing the industry and propose some predictions for how it will grow and develop in the next 2 years.
Overview of the eCommerce Economy in the UK
The ecommerce market in the UK is one of the most developed in the world. According to data from the Office for National Statistics (ONS), online sales accounted for 28.5% of all retail sales in the UK in May 2021. This represents a significant increase from the 19.9% share recorded in May 2020.
The growth in ecommerce in the UK has been driven by changing consumer behaviour, which has been influenced by factors such as convenience, affordability, and access to a wide range of products. In addition, the COVID-19 pandemic has had a significant impact on the ecommerce economy, as consumers were forced to shop online due to lockdowns and social distancing measures.
The UK ecommerce market is dominated by a few large players, such as Amazon, eBay, and ASOS. However, there are also many smaller ecommerce businesses operating in a variety of sectors, such as fashion, electronics, and food.
Overview of the eCommerce Economy in the EU
The ecommerce market in the EU is also growing rapidly, although it is not as developed as the UK market. According to data from the European Ecommerce Report 2021, the ecommerce market in the EU was worth €717 billion in 2020, representing a growth rate of 13.6% compared to the previous year.
The growth in ecommerce in the EU has been driven by a similar set of factors to those in the UK, including changing consumer behaviour and the impact of the COVID-19 pandemic. In addition, the EU ecommerce market is characterised by a large number of smaller players, as well as some larger players such as Amazon and Zalando.
The EU ecommerce market is highly diverse, with significant variation in the size and growth rates of different countries. For example, the ecommerce market in Germany is one of the largest in Europe, while the market in countries such as Bulgaria and Romania is relatively small.
Key Trends in the eCommerce Economy
Mobile Commerce:The rise of mobile devices has had a significant impact on the ecommerce economy, with an increasing number of consumers using their smartphones and tablets to shop online. According to data from the UK's Centre for Retail Research, mobile commerce accounted for 46.5% of all online sales in the UK in 2020. Easy mobile payment plays an important role in enabling the growth of mobile commerce. Here, at Fena, we empower merchants to get paid directly to their bank account across their mobile commerce. With support of QR codes and payment links, Fena is a comprehensive mobile payment provider.
Social Commerce:Social media platforms such as Instagram and Facebook have become increasingly important in the ecommerce economy, with many businesses using them to promote their products and reach new customers. In addition, some social media platforms such as Instagram and Pinterest have launched their own ecommerce features, allowing users to buy products directly from within the app.
Sustainability:The growing awareness of environmental issues has led to an increasing focus on sustainability in the ecommerce industry. Many businesses are adopting eco-friendly practices such as using recycled materials and reducing packaging waste.
Personalisation:The use of data and AI technologies is enabling ecommerce businesses to personalise their offerings to individual consumers, providing a more tailored shopping experience.
Challenges and Opportunities
The ecommerce industry faces a number of challenges, such as increasing competition, changing consumer behaviour, and the need to keep up with technological advancements. In addition, there are regulatory challenges, such as ensuring compliance with data protection and consumer rights regulations.
However, there are also many opportunities for growth and development in the ecommerce industry. For example, the continued growth of mobile and social commerce, as well as the increasing focus on sustainability and personalization, present significant opportunities for businesses to expand their offerings and reach new customers.
Another key opportunity for ecommerce businesses is the growing trend of cross-border ecommerce, with consumers increasingly purchasing products from overseas websites. This presents an opportunity for businesses to expand their reach beyond their domestic markets and tap into new customer bases.
Predictions for the Future
Looking ahead, the ecommerce industry in the UK and the EU is expected to continue to grow and develop in the coming years. Some key predictions for the future include:
Mobile commerce will continue to grow, with an increasing number of consumers using their smartphones and tablets to shop online.
Social commerce will become increasingly important, with businesses continuing to use social media platforms to promote their products and reach new customers.
The focus on sustainability will intensify, with more businesses adopting eco-friendly practices and customers becoming increasingly conscious of the environmental impact of their purchasing decisions.
Personalisation will become even more sophisticated, with businesses using data and AI technologies to provide highly tailored shopping experiences.
Cross-border ecommerce will continue to grow, with businesses increasingly targeting customers in other countries and adapting their offerings to local markets.
The ecommerce economy in the UK and the EU has experienced significant growth in the last two years, driven by changing consumer behaviour, technological advancements, and the impact of the COVID-19 pandemic. Key trends such as mobile and social commerce, sustainability, and personalization have emerged, and the industry faces both challenges and opportunities as it continues to grow and develop.
Looking ahead, the future of the ecommerce industry looks bright, with continued growth and development expected in the coming years. Businesses that can adapt to changing consumer behaviour and technological advancements, and that prioritise sustainability, personalisation, and cross-border commerce, are likely to thrive in this rapidly evolving industry.