Ecommerce has long been a driver for retail growth in the UK with a whopping 98% of consumers having made an online purchase. Internet sales contribute to 8.3% of the UK economy and in 2010 was worth £121bn – that’s more than £2,000 per person. Also in 2010, 13.5% of all UK purchases were conducted over the internet and projected to rise to 23% by 2016 (stats Boston Consulting Group).
But as the trend towards online shopping continues to rise, more online stores equals more competition, and the potential of untapped overseas marketplaces starts to look more appealing.
Over the next 5 years, it’s estimated that global consumer spending will increase by 8.8%; 49.2% of which being online. Much of this growth is being driven by Eastern Europe and Asia, who are learning from the early adopters like the UK, Germany and France, with the largest adopter being China, bringing massive opportunity to savvy ecommerce business in the UK. For example, in China, 30 million customers are expected to shop online for the first time every year until 2015, at which point China will surpass the USA to become the largest ecommerce market in the world. (My thanks to Chris Bishop, 7thingsmedia for these amazing statistics).
So this should indicate the scale of the untapped market outside of Britain, and the possibilities this creates for your online business.
Okay, with the stats established and the general consensus that ecommerce is going to continue to grow and international marketplaces are getting closer, the next question to ask yourself is “should I target the global marketplace?” Obviously, this will depend on the products you sell, how you fulfill them, and the potential demand for your products overseas. If you have a unique or exclusive line of products, or you sell items that are manufactured in the UK, then most likely the answer is “yes”.
A reasonably low cost and useful way to determine your international selling power is to sell via the online channels that customers from these locations already use and trust (i.e. eBay, Amazon and Google Shopping). These well respected online marketplaces with their millions of loyal customers should give some indication on how your products might be received out-with the UK, and provide a cost effective way for you to sell abroad without the need to drastically change your own website or invest in “internationalising” just yet.
Another simple way to gauge the demand is to look at your own web stats and sales. Are you getting traffic from outside the UK? Do you have many orders from overseas customers? If you are getting much overseas traffic but limited sales this could indicate potential for internationalisation and an opportunity to turn those browsers into buyers.
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