The number of million pound businesses trading on eBay UK is set to grow by a quarter this year, despite fears of a double-dip recession. Export is set to be a key driver of growth.
By the end of 2011, it’s expected that there will be 159 million pound businesses trading on the online marketplace, with 98% of them finding room for growth by trading overseas.
Overseas sales from eBay UK sellers were worth £446m in 2010 and it’s expected that 11 of this year’s million-pound businesses will turn over £500,000 from exports alone. Key export markets are the United States, Australia, Germany, Ireland and France.
eBay says this will be the fourth consecutive year that the number of ‘millionaires’ trading on its site has risen. In 2010, five businesses reached £1m turnover in their first year on the site.
Angus McCarey, retail director for eBay UK, said: “We’ve seen a surge of businesses starting up on eBay since the recession, which shows the vital role online businesses play in supporting the fragile UK economy. Many eBay businesses, including some of our millionaires, are selling offline as well, so their total contribution to the UK economy is even more substantial.”
And online, UK businesses are doing better than their European neighbours in this regard. McCarey said: “Whilst the UK economy is often compared unfavourably to Germany, our figures show good reason to be optimistic. Online SMEs are growing faster on eBay.co.uk with millionaire businesses developing at three times the rate compared to Germany.
“Exports are helping to drive this success as UK SMEs benefit from the international audience that selling online gives them. There are considerable opportunities for SMEs willing to ship internationally to EU and global customers.”
Danny Barenga, 25, runs one of the eBay million pound stores. His eBay shop, PF Jones, sells car parts and accessories. Barenga founded it as an online channel for his family’s business, PF Jones, which specialises in selling towbars, camping and caravanning equipment. In the last year the company’s eBay turnover has doubled and online success has meant the company could invest in larger distribution facilities. PF Jones employs more than 300 staff across its four shops in the North West. Its eBay shop team has five members of staff.
Barenga said: ““Our ability to predict changes in the market and adapt quickly has been the key to our success. Exports are also playing an increasingly prominent role in our business model as we continue to increase our overseas sales, in particular to Europe and Australia”.