In a report carried out by the US consultancy group Boston Consulting, it has been revealed that the UK is a global leader in the field of e-commerce, with the highest online spend per capita in the world. The internet has contributed approximately £100bn – 7.2% of GDP – to the British economy in 2009, and represents the second largest online advertising spend after the USA.
According to search engine optimisation experts QueryClick uk.queryclick.com, the dominance of the UK in the e-commerce sector has been borne out of a growing tendency of the British public to utilise online shopping services due to a marked desire to receive value for money.
“Many people in the UK feel they are able to get a better deal online, and often this is the case. The atmosphere of economy in Britain drives many to seek out better value for money via online shopping. The rise in dominance of the world of e-commerce has resulted in a greater level of competition which, for us, equates to a greater opportunity to offer our services in a region in which we are market leaders.”
The internet as an independent sector would be classed as the fifth largest industry in Britain, just behind the financial services, which accounted for 9% of GDP in 2009. The BCG study, aptly entitled The Connected Kingdom, discovered that internet companies in the UK employ over 250,000 staff, with many of these positions made available by various SMEs.
Co-author of the report and partner at BCG, Paul Zwillenberg, provided an insight into the report's findings:
“Everyone thinks the global Silicon-Valley-based companies are driving growth, but this report makes clear that in the UK it is coming from the 'mom and pop' businesses. They now have global footprints, they are selling to the 'long tail' and they are making their businesses more efficient.”
The driving force behind the lead status of the UK for e-commerce stems from the notable amounts of money spent by Brits online. Research by eMarketer tells us that some 28.5 million Britons make online purchases, whilst around 40% partake in online shopping at least once a month, spending on average £71 monthly.
All this has come despite the relatively slow broadband speeds experienced within the UK, as well as the recent recession, in which, as SEO company QueryClick [http://uk.queryclick.com/search-engine-optimisation-seo] points out, online advertising spend continued to grow YOY despite the overall contraction in advertising expenditure.
In financial terms, e-commerce is a real asset to the British economy. With 21%of all UK internet users selling their services or products online, it is perhaps unsurprising that the UK is a net exporter of e-commerce goods, where each £1 spent on importation is more than compensated for by the £2.50 redeemed via exportation. In 2009, Britain exported £9.5bn in e-commerce goods, whilst only importing goods to the value of £3.4bn
Whilst the recent findings demonstrate the significance of the internet for the economy, figures are set to grow over the next 5 years. The BCG report predicts that the percentage of GDP accounted for by the internet could reach 10-13% by 2015. Over the past year, online shopping has increased by 25%, with the proportion of Britons shopping online rising from just over 50% in 2008 to 62% the following year.