Fashion retailers and brands are among the UK retailers set to benefit most from overseas online sales which are forecast to grow sevenfold to £28 billion by 2020, according to research just published from OC&C Strategy Consultants and Google. Britain’s Retail e-mpire study predicts that international sales will outpace homegrown sales and account for 40% of total online sales in the next 7 years.
The findings reveal that international sales of British goods were worth £4 billion last year, but are set to dramatically outpace UK sales in the next seven years and soar to a staggering £28 billion. The number of consumers from outside the UK searching for British brands and retailers such as ASOS, Burberry, Jimmy Choo, Net-a-Porter and Topshop has grown on average by 46% a year since 2010.
Sales in Western Europe are expected to grow to £9.8 billion in 2020, up from £1.5 billion in 2012, whilst the emerging economies of Central and Eastern Europe and Asia are forecast to reach £6.9 billion and £4.5 billion respectively by 2020. North America will continue to be the single biggest regional market for British online goods, with sales increasing from £0.8 billion in 2012 to £2.7 billion in 2020, however growth will be slower due to the maturity of the market and tougher competition from national brands.
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 enables consumers to seek out the best offers from around the world. Secondly, the nature of risk has changed. International expansion is much less capital intensive and this is creating increased growth opportunities. 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.
Anita Balchandani, Partner at OC&C, commented, “E-commerce has transformed what was once a game anchored in local markets to one where retailers can pursue internationalisation at the same time as domestic expansion. It is perhaps no surprise that companies such as Amazon and Ebay now generate about half of their revenues from international markets in a fraction of the time that it has taken the likes of Walmart and Tesco”.
Google reveals that it has also witnessed a significant increase in the volume of searches for British retailers and brands from overseas, driven by the increased popularity of UK brands in Europe and Asia.
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