The UK’s ecommerce market is the third largest in the world, accounting for almost 7% of GDP, with only Korea and China ahead of it. Spain, France and Germany are all in the top 10.
According to research by BNPL provider, Butter, the world’s biggest e-commerce retail market is, unsurprisingly, China. In 2020 alone, almost $2.3trn was generated through online retail. When comparing this figure to China’s Gross Domestic Product (GDP), the importance of ecommerce to the country becomes clear.
China’s GDP is $14.7trn. This means that the $2.3trn created by ecommerce retail is comparable to 15.6% of the overall GDP. No other country comes close to having a ecommerce sector of such immense scale.
When using the measure of ecommerce sales versus GDP, the nation that comes closest to China is South Korea where, in 2020, ecommerce retail generated $111bn. The nation’s GDP stands at $1.6trn, meaning that e-commerce is worth 6.8% of the country’s entire wealth.
However, the nation to come closest within the western world is the United Kingdom, where total ecommerce retail sales of $180bn equate to 6.7% of the nation’s GDP which currently stands at $2.7trn.
In 2020, the USA’s ecommerce retail sector generated an enormous $795bn, almost $600bn more than the UK. But the US has a GDP of $21trn, dwarfing that of the UK, which means US ecommerce retail only compares to 3.8% of the nation’s GDP.
These findings suggest that, despite generating less money in dollars and cents (or pounds and pence), the UK’s ecommerce retail sector is, domestically, far more influential and powerful than the USA’s. The implications of this are wide-ranging as ecommerce retail increasingly starts to shape the fortunes of the UK economy.
The scale of the UK’s e-commerce income against its GDP is an anomaly in Europe. At 6.7%, it dwarfs the other European nations that feature in the global top ten e-commerce markets: Spain (2.8%), France (2.8%), and Germany (2.5%). Indeed, across the whole globe, only in China and South Korea is the sector more influential.
Timothy Davis, Co-Founder and CEO of Butter, comments: “Ecommerce retail is booming and is set to become the default choice for shoppers across vast swathes of the world. Its dominance is a result of the ease, affordability, and choice it offers over more traditional retail methods.”
He continues: “Ecommerce also lends itself perfectly to emerging methods of transacting such as Buy Now Pay Later credit options. With applications like Butter, this option is available at any digital checkout in the world, further enhancing consumers’ options.”
Davis concludes: “Physical retail won’t completely disappear, though. Instead, successful retailers are already starting to blur the lines between online and high street shopping by offering the ability to transact while spreading the cost of a purchase in-store. It will be key for retailers to ensure that the in-store experience offers at least as much flexibility as the online experience if they want to boost physical retail sales.”