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600,000 people now work in ecommerce in the UK

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Online businesses are a growing force in the UK jobs market, generating wealth for the nation’s economy, reducing the cost of living and driving new export business, says IMRG as it releases statistics on the number of people now working in ecommerce in the UK and on the likely future growth of staff numbers in UK businesses.

The first UK e-retailers began trading in 1994, just sixteen years ago, and since then the Compound Average Growth Rate (CAGR) of employment in online retail has been 18.9%, the trade association has found. If growth continues at this rate, there will be one million e-jobs by 2013, and approaching three million by 2020.

83% of the online retail businesses (160), surveyed in new research by IMRG and IMRWorld, started trading after 1st January 2000. Three percent started trading in 2010.

The survey reveals that more than 600,000 British jobs are now either directly created in or support the UK’s estimated 150,000 online retail businesses.

The e-retailers surveyed now, on average, employ six times as many staff as when they started trading. The average number of staff that their businesses employed when they started trading was five (5.1). Today the average number of employees is thirty (29.51), a growth rate of 579%.

78% of the businesses surveyed expect to take on more personnel during the coming year, while 39% say that they intend to recruit additional staff within the next three months.

“It is clear that being competitive in the online marketplace is critical both for businesses and the economy,” says James Roper, chief executive of IMRG. “E-retail is making a huge contribution to the UK’s wider economic health, creating revenue, new employment and opportunities for people to purchase goods at lower prices.”

“Britain is recognised as leading the world in online retailing, representing a third of all online shopping in Europe, which presents unique and immediate opportunities to create more British jobs by expanding our cross-border trading, helped by global use of the English language, our respect as a trusted trading nation, our advanced payments, security and delivery infrastructures,” he added.

“The internet empowers the entrepreneurs on whose success Britain’s future prosperity will rely, so it is vital that the next Government keeps itself well informed about e-business to ensure that it recognises when and why its help may be necessary, and to avoid making unworkable political demands that routinely undermine online trading,” Roper concludes.

The IMRG/IMRWorld survey results also showed that, of the e-retailers surveyed:

  • 45% earn 90-100% of their revenue via e-commerce

  • 25% recorded sales increases of more than 50% during the past year

  • 52% recorded sales increases of more than 20% during the past year

  • 64% expect to recruit additional staff within the next six months

And, for every person employed as an online retailer, another works in support of e-retail trade, providing skilled services such as distribution and delivery, customer support, payments, website development, search, marketing, security and administration, say the researchers.

The largest of these areas is distribution and delivery, which is estimated to currently employ 108,000 people to deliver the nearly one billion parcels that will be generated by online shopping in 2010.

Research conducted by eBay last summer, meanwhile, found that there are over 120,000 UK online businesses on eBay alone, generating sales of €1.9 billion per year. The company surveyed 458 of its online retailers, registered as businesses on the eBay site and with annual sales from eBay of between £100,000 and £3.4million. It found that the average turnover of the businesses surveyed was £242,000 and the average number of employees was eight, with 44% employing three or more people.

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