The UK has become the world’s second biggest online retail exporter. According to the British Retail Consortium, shoppers from all over the world are demanding UK goods, from UK brands, purchased easily over the internet. Consumers don’t mind if a product they want is at a local store or in a shopkeeper’s window halfway around the world. It’s now less about location and more about consumer engagement – anytime, anywhere.
The UK’s head start
The latest BRC figures show that foreign shoppers have been flocking to UK sites over the past year. The rapid uptake of smartphones globally has played a large part in the development. Retailers experienced a 64% increase in the total volume of overseas consumers searching for UK brands on smartphones, with a 41% year-on-year increase in the volume of searches by tablet.
Led by mobile, a commerce revolution is under way – how we shop today is being transformed at breakneck speed. Shoppers want convenience, speed and choice – they want to shop anytime, anywhere, on any device and we have to respond to how they shop.
Today there are around two billion internet users worldwide. That’s expected to grow to three billion over the next three years. There is no doubt that the popularity of UK brand names, coupled with a general rise in access to online shopping inevitably leads to a upwards trend of exports. UK retailers are perfectly placed to cater for this global demand – on eBay, fashion items are our biggest export but we see strong exports across all of our categories.
The fact that the UK is a leading light with its online exports also says a lot about our home-grown retail practices. Helen Dickinson, director general of the BRC, links the rise in exports to UK retailers investing heavily in international online experiences, localised websites and faster delivery times. Retailers have been spurred on to create a fuller range of integrated services thanks to the phenomenal growth of online and mobile shopping among British consumers. We see this firsthand in the UK where an item is bought every second via the eBay app. It is this expertise in selling to a tech-savvy domestic market that has in turn allowed British retailers to quickly adapt, grabbing the attention of the wider global market.
But it’s not just the powerhouses of British retail that can benefit from this trend. Small retailers can now leverage low cost online marketplaces to reach a global audience overnight, a trend appearing more and more in emerging markets.
Over the last decade we have seen International Trade transform into International Commerce. No longer is it just the largest retailers with immense resources that are able to take full advantage of globalisation. Historically a 10% increase in distance in the offline world would cause an 18% reduction in trade. But now technology is heralding the death of distance.
In recent years, online commerce has grown much faster in emerging markets in comparison to the developed world, with about a third of people in developing countries using the internet in 2013. In these markets, technology has brought about a pronounced impact – a 10% increase in distance for eBay merchants results in only a 1% decrease in trade, a 90% reduction in the impact of distance on trade.
Our Commerce 3.0 report analysed eight emerging markets to understand how technology and the internet was increasing exports. The findings showed that over 95% of small businesses engaged in the study are exporting. What’s more, the average number of international markets reached was around 30 to 40. The survival rate of new businesses was also high, with 60-80% making it through their first year.
Take Jordan for example. Roughly 25% of its traditional firms are engaged in exporting, reaching on average around three export destinations a piece. Amongst technology enabled businesses in Jordan, almost all export, and commercial eBay sellers based in Jordan reach 93 different destinations. Over in Chile, the survival rate of technology enabled newcomers after a year was over 80%. For its traditional businesses, the rate was only 30%.
What we learn from these emerging markets is exciting – it means that retailers can continue to sell locally whilst also using online methods to reach a global customer base – getting the best out of both worlds.
Success of this kind is possible is due to a number of factors ideally being present: connectivity to the internet at low cost; reliable payment methods; efficient logistics such as postal services; and finally, legal rules and administrative procedures that allow small firms to be part of global trade.
We know platforms such as eBay dramatically reduce distance as a barrier to trade, providing companies with a low cost way to easily reach international customers, access to compelling commercial pricing and group discounts on logistical elements such as shipping and translation. Our newest report into omnichannel practices, launched today, revealed that approximately 20% of the sales of the top 100 retailers on eBay in the UK are cross border, and these retailers sold to 139 countries worldwide. British consumers are also shopping abroad online. In 2013, 24% of UK residents made a cross-border purchase.
The global marketplace presents businesses in the UK with an incredible opportunity. Changing consumer shopping habits are having a dramatic effect on commerce and many UK retailers are using their popularity and digital expertise to reach customers across the world. Retailers here might have a head start, but technology-enabled small businesses in developing countries are making headway: so with cross border catch-up underway, now’s the time for UK retailers of all sizes to turbo-charge their international trade.
Chris Webster is commercial director of international commerce at eBay