The British e-commerce market is one of the most developed ecosystems in the world when it comes to online shopping.
Do companies from all industries have the same potential to succeed in it? Shopping trends and consumer preferences are evolving rapidly, so it makes sense to stay abreast of what UK internet users really need.
In this article, I'll take a look at the sectors that have the greatest opportunities in this context, and suggest how brands can take advantage of these changes to sell effectively in the demanding UK market.
E-commerce in the UK. What's worth knowing?
Are you running an online store or considering expanding your business into the UK market? You need to start with a basic step: understanding the dynamics of online shopping in this country.
The UK is one of the largest e-commerce markets in Europe. It is predicted that by 2025 share of online retail sales across the UK will be 38.1%, which will translate into a value of £152 billion or $194.1 billion, and by 2027 as much as 22.6% of all retail sales will be conducted online.
The global e-commerce market is projected to be worth as much as $6.3 trillion in 2024 - up from $5.8 trillion in 2023. By 2027, it is expected to be as high as $7.9 trillion.
Where did the numbers come from?
Well, in the UK more than 80% of the population makes purchases through e-commerce! In other words, more than four out of five UK consumers are digital buyers.
Over the past few decades, online shopping has become ubiquitous not only in the UK, but around the world, and, worth noting, the numbers continue to grow. By 2027, for example, the rate of online shoppers in the UK is expected to reach more than 86 percent (!).
One of the main factors driving e-commerce growth in the UK is the ease of access to technology and developed logistics infrastructure.
Such services as fast "same-day" delivery, advanced payment options (e.g. Apple Pay, Google Pay) have become standard.
Consumers expect instant gratification and a seamless experience. Investing in automation technologies, AI and optimizing the site for user experience (UX) can help in this context.
Companies must also take into account the growing environmental awareness of consumers and adjust their marketing strategies to emphasize sustainable and environmentally friendly products and services. And note: users are beginning to unabashedly "detect" green washing!
Is it profitable to run an online store in the UK?
Considering opening an online store in the UK? The idea is great, but the first step should always be to analyze the profitability of such a decision.
At first glance, it may seem that competition in the UK market is enormous - and that's true. Nevertheless, the high level of competition is also evidence that there is a huge demand for online products. Industries such as fashion, technology, health, fitness, as well as organic and sustainable products are experiencing rapid sales growth. I'll talk more about this in a moment.
To answer the question of whether running an online store in the UK is profitable, you need to recalculate the costs of running an online business, including, for example, for renting warehouses, handling logistics or advertising on search engines. It's worth mentioning the various ways to optimize these costs, if only through efficient supply chain management, process automation or cooperation with local logistics operators.
Success in the British market depends on an effective marketing strategy that takes into account local consumer preferences. Brits value transparency, easy contact with the seller and fast and hassle-free returns. By investing in quality customer service, you can win customer loyalty and set yourself apart from the competition.
What else. Developing SEO strategy targeting the UK market - this will help you achieve high rankings in search results and translate into more traffic and higher sales.
Industries to bet on if you want to sell online
Want to sell online in the UK, but haven't decided on a specific industry yet? Now is a good time to think about what might be most profitable for you. The numbers don't lie - below you'll find black and white statistics on the "strongest" industries in the UK e-commerce market.
What industries do we think are particularly worth investing in?
Fashion
The fashion sector has long dominated e-commerce in the UK - accounts for as much as 31% of the market share. In 2024, men's fashion and the second-hand market (here it's worth mentioning platforms such as Vinted and Depop) are attracting particular attention, with huge traffic increases of 80% and 40% year-on-year, respectively.
Consumers are increasingly looking for brands that offer sustainable and eco-friendly solutions - one of the most important trends in the fashion industry.
Footwear is also popular - in 2023, the keyword ("boots") "shoes" received the highest competitive score in the UK (94), while "sneakers" and "sandals" scored 70 and 65 respectively.
Interestingly, the fastest growing brand in the UK e-commerce market is sportswear manufacturer Gymshark. In 2023, the company generated annual revenue of nearly $372 million.
The list of leading online stores in terms of development also includes Lyst, which offers branded fashion, among others.
Luxury goods
The luxury sector, primarily jewelry, is recording annual growth of 15.8% globally and 5.4% in the UK, despite global slowdowns in other categories. Brands that are able to capitalize on popular social media trends, such as the slogan "quiet luxury," have a good chance of success in this segment.
Technologies
The market for virtual reality and immersive technology is growing rapidly, reaching a value of £2.8 billion by 2023. The sector, which includes games or simulation training, for example, will score further growth - especially in educational and entertainment applications.
The coronavirus pandemic in 2020 also accelerated the development of the education technology (EdTech) sector, which saw a significant increase in investment. Investment in the sector is estimated to have reached £150 million in 2021, opening up huge opportunities for companies offering remote courses, learning platforms and artificial intelligence-based tools.
Food industry
The food sector also remains popular with e-commerce consumers.
Food and beverage is one of the most sought-after categories for online sales.
The market share of groceries purchased online in the UK is as high as 13.1% of all grocery purchases.
It is projected that the retail market of online groceries will grow by 3.1% in 2024. It's also worth keeping in mind that as many as a quarter of online grocery shoppers now use fast delivery services.
What should you know when setting up an online store in the UK?
When setting up an online store in the UK, you must, of course, first register your business under British law and choose an e-commerce platform that suits you, such as Shopify, WooCommerce or BigCommerce.
In the UK, providing seamless and fast payment methods via PayPal, Google Pay or Apple Pay is also an important step to success - it's already a standard for UK consumers. It's also worth implementing technologies that enable deferred payment, such as Klarna.
Don't forget about SEO optimization - Your store needs to be visible to potential customers. Competition in the UK market is high, so your SEO strategy should target keywords related to the local market, as well as creating a user-friendly website. While this goes without saying, you need to remember one thing: good search engine optimization can significantly increase traffic to your store!
UK customers value fast and reliable delivery. 24% of them abandon online shoppingwhen shipping is too slow. Brits expect fast delivery, and delays in order fulfillment often drive them to seek competitive offers with better delivery times. Next-day delivery or same-day delivery services are standard in the British market. Working with local logistics providers such as Royal Mail, DPD or Hermes will help you meet your customers' expectations.
What else to keep in mind?
As many as 34% of shoppers shop online at least once a week. For many people, online shopping has become a habit, and the regularity of these transactions creates an opportunity for many businesses, including yours. By sending out weekly offers and product updates via email marketing, you can effectively encourage customers to make more purchases.
Also invest in a solid customer service system. UK consumers are aware of their rights, and clear and transparent rules regarding returns and after-sales service can help build customer loyalty. Here it is worth "harnessing" to work... artificial intelligence - but that's a topic for a person article :)
Summary
The e-commerce market in the UK is an area of enormous opportunity - especially for those who can adapt to the changing needs of consumers. The green, health, technology and broader lifestyle industries have a bright future.
However, if you want to succeed, you need to bet on investing in data-driven marketing strategies, refined SEO optimization and constant monitoring of trends. This is how you can stay ahead in a competitive market and achieve sustained, rewarding growth
