According to research from OC&C Strategy Consultants and Google, British retailers could see their overseas online sales soar to £28 billion by the end of the decade.
Researchers concluded that growth in online sales will outpace domestic growth and eventually account for 40 percent of total online sales by 2020.
British retailers are already doing quite well abroad. In fact, international consumers spent £7.4 billion on British online retail sites last year, making up about 14 percent of total online sales. This year British retailers are expected to net £10 billion from cross-border sales.
OC&C Strategy Consultants and Google found that growth will come from multiple regions, with western Europea leading the way. Sales in western Europe are expected to hit £9.8 billion by 2020, up from £1.5 billion last year. Central and Eastern Europe will see plenty of growth as well, with sales reaching £6.9 billion by the end of the decade, up from £400 million last year.
Sales in Asia are expected to hit £4.5 billion by 2020, while North America will lose its position as the top market for British online retailers. The North American market is currently estimated at £800 million and it is set to expand to £2.7 billion in 2020. The American market is simply more mature than the rest of the world, which translates into slower growth.
“We have seen a significant increase in the volume of searches for British retailers and brands coming from overseas,” Peter Fitzgerald, director at Google, said. “The majority of non-UK searches are currently coming from Europe, followed by North America and Asia, driven by the increased popularity of British brands abroad. Retailers can use search data to identify pockets of demand and move quickly to meet the needs of customers.”
Anita Balchandani, partner at OC&C, said e-commerce has already transformed the retail game, which was once anchored in local markets.
“There are a number of reasons why growth in e-commerce is changing the rules of internationalisation. Firstly, geographical proximity no longer determines which market is best suited for expansion – the internet allows customers seek out the best offers from around the world,” she said. “Secondly, the nature of risk has changed. International expansion is much less capital intensive and this is creating growth opportunities which have a more controlled exposure to risk. Thirdly, the speed with which companies expand has also accelerated – over 40 of Britain’s top-100 etailers serve customers in more than 40 countries.”
