UK ecommerce statistics 2021. Analysts have noted that e-commerce now accounts for more than one quarter of all retail sales in the UK. This number is expected to steadily increase in the years ahead, and would reach nearly one-third of all retail sales by 2024.
Online shopping has become a daily norm for millions of UK consumers. Which means, UK shoppers are well familiar with receiving (and returning) merchandise bought online. With such a high level of online shopping experience, UK consumers have great expectations when it comes to delivery speed, user experience and smooth returns procedures. To succeed in this thriving market, e-commerce companies set up in the UK must take these expectations into account.
Expected Market Size in 2021
n the United Kingdom, revenue in the e-commerce market is projected to reach £80,678 million in 2021 according to Statista. Revenue is expected to show an annual growth rate (CAGR 2021-2025) of 3.5%, resulting in a projected market volume of £92,464 million by 2025. The UK e-commerce market’s largest segment is Fashion with a projected market volume of £27,060 million in 2021.
How Covid-19 Has Impacted UK’s E-commerce
When the UK government enforced the closure of nonessential retail stores as part of strict lockdown measures mid 2020 and again this year in 2021, UK consumers who wanted to purchase anything other than groceries or medications could not do so in-store.
Even when the high street opened back up, things were far from normal: Social-distancing measures meant queues were commonplace and footfall in stores was limited. In-store mask wearing was strictly enforced. Large proportions of the population continued to shelter at home, while many went without physical shopping altogether out of caution. It’s little wonder, then, that retail e-commerce had a bumper year in 2020.
Last year, it was forecasted that UK consumers will spend £141.33 billion ($180.39 billion) online this year, up a massive 34.7% from 2019. This significant increase will see e-commerce account for more than 30% of total retail sales in the UK for the first time. In 2019, that share stood at just 21.8%.
Amazon is expected to benefit the most from this surge in demand for online retail, adding an extra £2 billion in UK sales, totalling £31.1 billion by the end of 2020, up from analysts’ initial £29.1 billion prediction prior to the pandemic.
UK Retail E-commerce Sales, 2019-2024 (billions of £, % change, and % of retail sales)This pandemic bump won’t carry over into next year, though, and a more normal outlook will resume through the end of the forecast period in 2024. In fact, as the market rights itself, 2021 will see a 6.3% decline in UK retail e-commerce sales according to eMarketer’s prediction. It will take a few years for the retail e-commerce sales total to reach 2020’s height, but when they do in 2023, the numbers will be well in excess of anything pre-pandemic, at £143.51 billion ($183.17 billion).
According to Growcode, Germany leads with an average conversion rate of 2.22% while Italy lags behind at 0.99%. Typical e-commerce conversion rate in countries: Germany: 2.22%; United States: 1.96%; United Kingdom: 1.88%; Denmark: 1.80%; Netherlands: 1.78%; Greece: 1.44%; France: 1.10%; India: 1.10%; Italy: 0.99%
What about the UK? E-commerce websites in the UK have an average conversion rate of 1.88%. While this is a high conversion rate in a global context, surpassing Asian and South American markets (along with most other European markets), it still lags behind the US and Germany.
User penetration will be 86.2% in 2021 in the UK and is expected to hit 89.6% by 2025, while the average revenue per user (ARPU) is expected to amount to £1,372.82.
According to Statista, in the UK, 55% of the population shop online and the consumers’ favorite item to buy online were clothes and sports goods. According to the 2020 interview conducted by the Office for National Statistics, 32% of UK online shoppers purchased deliveries from restaurants, fast-food chains or catering services. Services and products least popular with online consumers were bicycles, mopeds, cars or other spare parts, where less than 10% of households choose to purchase them online.
Most Popular Payment Methods
In the United Kingdom (UK), PayPal was the most used online payment method in 2019. According to the 2019 survey by Attest, 49% of shoppers were using their PayPal accounts to make payments, while 37% used a credit or debit card.
Where UK’s Online Customers are Shopping From
The majority of purchases (73%) are made within the UK according to E-commerce News EU. 16% of purchases come from EU markets and 11% from outside the EU. The biggest export market is the US, with sales totalling USD $58.4 billion, followed closely by Germany, with sales totalling USD $46.6 billion.
2020 saw record retail e-commerce sales for the UK, with a total of USD $180.39 billion in sales, only third behind China (USD $2,296.95 billion) and the US (USD $794.50 billion). However, as the market rights itself post initial Covid peak, 2021 will see a 6.3% decline in UK retail e-commerce sales, to USD $169.02 billion according to eMarketer.
The UK leads in Europe for retail e-commerce sales, with Germany and France lagging behind at spots number 6 and 7. This year, India is projected to see the biggest percentage change in e-commerce revenue, up 22% from 2020.
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