The United Kingdom (UK) is one of the most advanced and mature e-commerce markets in Europe — and the rest of the world. With a population of above 69 million and a high internet penetration rate of 97.8%, the UK offers a large and lucrative online customer base for both domestic and foreign businesses.
In this article, we will provide an overview of the UK e-commerce market, covering its size, growth, consumer behavior, payment methods, social media usage, and logistics challenges.
E-commerce overview
The UK retail e-commerce sales are projected to reach $220.22 billion in 2024 (£177.11 billion). This growth is driven by several factors, including the increasing adoption of online payments, which has enhanced consumer convenience and streamlined the purchasing process.
E-commerce in this country is flourishing, with a substantial customer base of over 65 million online shoppers. The average spending per shopper has reached an impressive $4,679, which reflects the strong appetite for online purchasing. Moreover, smartphone usage is also on the rise, with 69% of consumers using their mobile devices for online purchases.
Additionally, Gen Z is becoming a major force in e-commerce, with 55% of users in this age group making online purchases.
E-commerce market leaders in the UK include Amazon, eBay, Asos, Currys PC World, and Gumtree. Here’s why:
- Known for its extensive product range, from electronics to groceries, Amazon has set the standard for customer service with its fast delivery options, including Prime membership, which offers next-day delivery on millions of items.
- eBay is another major player in the UK e-commerce market, which offers a unique platform for both individuals and businesses to buy and sell new and used goods. eBay’s auction-style listings and “Buy It Now” options attract customers looking for everything from collectibles to everyday items.
- ASOS is a leading online fashion retailer that is particularly popular among younger people. The company offers a vast selection of clothing, accessories, and beauty products from both its own labels and a variety of global brands.
- Currys PC World is a top retailer of consumer electronics and home appliances in the UK. The company operates both online and through physical stores. It provides customers with different products, including laptops, TVs, and kitchen appliances.
- Gumtree is one of the UK’s most popular classified ads websites, where users can buy and sell items, find services, and even look for jobs. The platform is especially known for local transactions. It allows users to connect within their communities to trade goods and services.
On the other hand, the most popular e-commerce segments in the UK are fashion, shoes, and food with beverages. However, on the list are also categories like:
- books, movies, music, and games
- cosmetics and body care products
- consumer electronics
- pet products
- and more
Consumer behavior
UK consumers are savvy and demanding when it comes to online shopping. They expect fast, convenient, and personalized experiences across multiple channels and devices. They also value trust, security, and transparency when choosing an online retailer and payment method.
When asked about attitudes toward online shopping, the majority of UK respondents (54%) say that when they plan a major purchase, they always research it on the Internet first. Half of the respondents said customer reviews are very helpful. Also, people prefer to purchase products online from various sellers but in the same place – for example, on marketplaces like Amazon.
In 2024, UK consumer behavior still reflects cautious optimism amid ongoing economic challenges. Although concerns about the cost of living remain high, with 70% of people still worried, this is a slight improvement from 2023, where 73% expressed concern. People are becoming more confident in the value of their homes and are less likely to take on debt, though they are less optimistic about wage growth and job mobility.
Price sensitivity has become a key factor in purchasing decisions, with buyers increasingly seeking value in their shopping. This trend is particularly evident in non-food retail, where there has been a shift back to physical and omni-channel shopping, moving away from online-only retailers. While there is still some interest in sustainable products, the momentum for switching to these options remains limited.
Interestingly, UK consumers are prioritizing spending on travel, with 30% planning to increase their holiday budgets this year. In contrast, dining out seems to be under pressure, although spending on entertainment remains relatively stable. Overall, while economic concerns persist, UK shoppers carefully navigate their spending and balance value with selective indulgences like travel and entertainment.
Another trend in UK e-commerce is the growing demand for transparency and control over personal data. Therefore, e-commerce merchants need to adopt a customer-centric approach to data management and comply with the General Data Protection Regulation (GDPR), among other relevant regulations. This means they need to inform customers about:
- what data they collect
- why do they collect it
- how they use it
- who they share it with
- and how they protect it
They also need to provide customers with easy access to their data and give them the ability to modify or delete it if they wish.
Payment
The UK payment landscape is diverse and dynamic, with various payment methods available for online shoppers. The top online payment method used in the UK is PayPal. Credit cards and bank transfers are also on the podium.
The rest of the places belong to Apple Pay, BNPL, gift cards, loyalty points, cryptocurrency, and NFTs.
As more consumers shop online, they also face more risks and challenges related to payment security and data protection. As many as 83% of UK shoppers are concerned about how their card details are processed and stored during transactions. Moreover, 34% of shoppers rank data security and payment encryption as the most important element of a positive online payment experience.
The result? E-commerce merchants should address these trends – they must provide secure and transparent payment solutions that can improve customer trust and loyalty.
Social media
Social media is an essential channel for e-commerce in the UK, as it enables online retailers and marketplaces to reach, engage, and convert potential customers. They play a crucial role in the daily lives of UK residents, with 56.20 million users active on various platforms, representing 82.8% of the population.
WhatsApp is the most used social media platform, and it is used by 79.0% of the population. The next one is Facebook, with 73.0%. The platform saw a slight increase in its ad reach, growing by 300 thousand users between October 2023 and January 2024. Another place belongs to Facebook Messenger – it remains popular, as 60.1% of the population uses it.
On the list is also Instagram – it has 33.10 million users, and its ad reach increased by 15.1% year-over-year. TikTok, known for its younger audience, had 22.71 million users aged 18 and above, with a nearly equal gender split and a 15.5% growth in ad reach.
The growth of social media usage is driven by several factors, such as the increasing adoption of social media platforms by UK consumers and the development of new features and tools by social media platforms that facilitate e-commerce activities, such as product discovery, browsing, comparison, and purchase.
Some of these features include Facebook Shops, Instagram Shopping, WhatsApp Business, YouTube Shopping, and TikTok For Business. These features allow businesses to create an online store on social media, tag products in their posts and stories, display product information and links on their videos, communicate with customers, and accept payments.
Logistics
Logistics is a crucial aspect of e-commerce, as it determines how fast, reliable, and cost-effective the delivery of products is for both sellers and buyers. The UK has a well-developed logistics infrastructure that supports e-commerce activities across the country and beyond.
The total port traffic is expected to reach 10.24 million TEU (Twenty-Foot Equivalent Units) in 2024. Similarly, air freight is forecasted to amount to 5.23 billion TKM (ton-kilometers) – which demonstrates the importance of air freight for UK logistics.
Logistics in this country is still one of the UK’s largest employers: 214,160 logistics businesses operated in the UK in March 2023, which translates to employing around 8% of the workforce. However, the types of jobs are changing as technology and automation advance. According to statistics, managerial and directorial roles have increased in purchasing, transportation, and distribution.
What about deliveries? The UK offers a variety of delivery options for e-commerce businesses and customers, ranging from standard delivery (2-5 days) to next-day delivery (1 day) to same-day delivery (within hours). Also, UK buyers have different preferences when it comes to delivery options, depending on factors such as urgency, convenience, cost, and environmental impact.
69% of UK shoppers use click & collect. More specifically, 24.9% use it to get products faster, and 28.9% to save money on home delivery costs. Over the next three years, it’s expected that the click & collect service will gain an even larger share.
The UK e-commerce logistics industry also faces some challenges that may affect the efficiency and quality of delivery services. Some of these challenges are:
Brexit: Brexit has had a profound impact on UK logistics, introducing new challenges and opportunities. The departure from the EU has led to increased customs checks, trade agreement changes, and supply chain management adjustments. These changes have required businesses to navigate new regulatory landscapes, which have caused delays and increased costs in some cases. However, Brexit has also prompted the logistics sector to innovate, adapt, and find new routes or markets to maintain efficiency and competitiveness.
Competition: The UK e-commerce logistics market is highly competitive, with many players vying for market share and customer loyalty. Moreover, the growth of e-commerce and technology has increased the demand for fast and reliable delivery services and has forced logistics companies to improve their offerings. Some of the emerging competitors include Amazon Logistics, which has its own fleet of delivery trucks and drivers, or DHL Parcel UK, which has partnered with PayPoint to offer more than 3,500 parcel stores across the UK.
Conclusion
As you can see, there are big things happening in the UK. This e-commerce market is one of the largest and most developed in the world and Europe. You can see this through the statistics above, which highlight the dynamic and evolving nature of this country in 2024.
The UK offers a huge opportunity for businesses that want to tap into the country’s growing online customer base. However, to succeed in the UK e-commerce market, first understand and adapt to its unique characteristics, such as its payment methods, social media platforms, and logistics challenges. Why should you do so? Because then, you will offer your UK customers a seamless and satisfying online shopping experience.
Take your chance and start selling!
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