The UK ecommerce market has shown remarkable resilience and growth in 2022 and 2023; adapting to post-pandemic consumer behaviours and technological advancements.
We have put together the main highlights to provide a detailed overview of the market, covering key trends, major players, and future outlook.
Let’s get stuck in!
In 2022, the UK ecommerce market continued to show significant growth, influenced by the increasing adoption of online shopping and technological advancements.
Industry reports reveal that the UK ecommerce market accounted for 30% of the total retail sector, with a Compound Annual Growth Rate (CAGR) of 8.4% expected from 2023 to 2027. The further projection is that the market will reach approximately $230.36 billion by the end of Q4 of ‘27.
Online shopping is the new high street
Internet shopping remains the dominant force in the UK, with 82% of the population purchasing online in 2021, up from 78% in 2018.
Top categories for ecommerce included clothing, gifts, groceries, and home furnishings. Interestingly, millennials make up 44% of the UK’s online shoppers, with a preference for computer-based purchases.
Who influences the market the most?
Market leaders in 2022 included major players like Amazon, eBay, ASOS, Currys PC World, and Gumtree; so pivoting to ecommerce will see you brush shoulders with the best in the field.
The year saw notable developments such as The Very Group partnering with True Fit to offer personalised size and fit guidance across its brands, aiming to reduce fit-related returns, and the Dutch fulfilment company Active Ants opening a distribution centre in Northampton to enhance its European presence.
What can we learn from British ecomm in the run up to 2024?
When looking at 2023, we can identify a few interesting trends and strategies.
Retailers like Next and ASOS continued to innovate and adapt their online strategies. Next, for instance, reported that its online sales accounted for more than 60% of total sales in 2021/22, with a shift towards enhancing online customer experiences through personalisation and integration of online and physical stores.
On the other hand, ASOS, facing challenges such as supply chain issues, focused on tighter stock management and investing in technology like AI for improved customer experience.
The overall ecommerce online share in the UK retail market was reported to be 24.9% and is projected to increase to 30.6% by 2027.
In January 2023 alone the UK ecommerce saw consumers spending £8bn post-Christmas 2022. This only further highlights the growing importance of ecommerce in the retail sector and reflects the continued shift of consumer behaviour towards online shopping.
It’s important to note that these insights provide a snapshot of the UK ecommerce market’s evolution, highlighting its resilience and adaptability in the face of changing consumer preferences in the context of global market trends.
The data indicates a sustained growth trajectory, underpinned by technological innovations and strategic business adaptations.
Report summary & highlights
Market size: The UK ecommerce sector continued its upward trajectory in 2022, with significant growth influenced by increased online shopping adoption.
Consumer behaviour: 82% of the UK population shopped online in 2021, a rise from 78% in 2018. Key shopping categories included clothing, gifts, groceries, and home furnishings.
Market leaders: Leading players included Amazon, eBay, ASOS, Currys PC World, and Gumtree.
Notable developments: Innovations such as The Very Group’s partnership with True Fit and Active Ants’ new distribution centre in Northampton marked the year.
Online sales share: Ecommerce is projected to constitute a larger portion of the UK retail market, reaching 30.6% by 2027.
Retail strategies: Major retailers like Next and ASOS focused on enhancing online customer experiences and integrating online and physical stores.
Technological investments: Emphasis on AI and digital developments for improved customer navigation and personalisation.
Technological advancements: The rise of 5G and online payment systems.
Consumer preferences: Increased preference for online shopping, with 41% of UK consumers favouring it for better deals.
Demographic trends: Millennials representing a significant portion of online shoppers.
Data security: With the rise in online transactions, data security remains a crucial challenge.
Supply chain issues: Retailers like ASOS faced supply chain challenges, impacting their growth trajectory.
Growth projections: The UK ecommerce market is expected to grow at a CAGR of 8.4% from 2023 to 2027, potentially reaching US$230.36 billion by 2027.
Sector innovations: Continued investment in AI, machine learning, and enhanced delivery and return systems are expected to shape the future ecommerce landscape.
The UK ecommerce market has demonstrated significant growth and adaptability, with a shift towards enhanced technological integration and a deeper understanding of consumer needs. The future of ecommerce in the UK looks promising, with ongoing innovations and strategic adaptations by key players poised to further drive market growth!
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