Online businesses growing 57 times faster than the UK economy: study
British online businesses are growing more than 50 times faster than the economy as a whole, a new study has found. The Barclays report came as separate spending data from Barclaycard showed online sales climbed by 10.1% in the first week of April, compared to a dip of 4.8% across overall retail spending.
Research by Barclays’ technology, media and telecoms industry team found the average online company saw 11.4% compound annual growth over the last three years, with half of those questioned enjoying double digit growth over that time. The UK economy grew at 0.2% in that time, making the online sector’s growth rate 57 times faster.
The Barclays Online Business Outlook 2013
report showed that 64% of online businesses said they were optimistic about their growth prospects for the year ahead, with only 4% pessimistic. Some 48% were optimistic about the UK economy (13% pessimistic), and 35% said competition in their sector was the biggest threat they face this year, and 25% said increasing costs across their business was the second biggest threat.
However, while 64% of online businesses in the UK said a mobile strategy was an important factor in their 2013 business success, some 60% admitted they were yet to devise and implement such a strategy. And 89% of online businesses said they had not yet developed their website for mobile devices. But online businesses that have developed mobile sites or apps generated 27.8% of their revenues from mobile in 2012, an average of £2,474,000.
A third (34%) of online businesses questioned reported a rise in mobile traffic to their website since Christmas last year, compared to the same period the year before and more than half (53%) believe that 4G networks will increase mobile traffic to their website further still. But 45% were unsure whether their website would be able to cope with the additional traffic generated from 4G networks.
“Online businesses have bucked the trend over the last three years and experienced success in spite of the stagnant economic conditions,” said Sean Duffy, managing director and head of technology, media and telecoms at Barclays. “The next challenge for companies operating online is sustaining this level of growth and ensuring that they take advantage of new and rising trends. We are advising our online clients to become mobile-ready, as it’s a significant opportunity, particularly with the imminent roll out of 4G networks across the UK due to make mobile browsing easier for more and more consumers. Businesses that fail to move with the times risk losing out on valuable ecommerce opportunities.”
The study came as Barclaycard spending data
, published separately, found that online retail spending grew by 10.5% in early April, while overall spending fell by 4.8%. Spending on food and drink was 21% down in the first week of April, compared to the same time last year, while clothing spending fell by 17.6%. Travel and hotel spending were up by 4.1% and 7.5% respectively.
Dave Chan, chief executive of Barclaycard Consumer Europe, said: “Consumer spending has taken a double hit from the unusually cold weather at the start of April and the post-Easter slowdown. However, one bright spot is that online retailers have benefitted from the weather as shoppers have gone online to avoid the cold.”