Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and , reputable, prominent B2B websites.
Last Published: 9/1/2018


Internet shopping is more popular in the UK than in any other major country.  Consumers in the UK spent $197 billion online in 2017, up 13.9 on 2016.  Consumer eCommerce now accounts for about one quarter of the total retail market in the UK.

Despite the economic recovery in the UK, almost static wages have helped to increase online shopping, as consumers increasingly turn to the internet in search of the best prices on a wide variety of goods and services. The internet is now the natural place for shoppers to look for fashion, health and beauty, home and garden, consumer electronics and travel services.  One key trend is to physically look at or try a product in-store and then go home to buy it at a better price online or buy it via their smartphone or tablet.  Click and collect is also becoming much more popular.

With the continuing rise of social networking and mobile internet access, social media marketing is the channel in which firms are most likely to be boosting their investment in e-commerce in the next couple of years.


Current Market Trends

According to IMRG Capgemini e-Retail Sales Index “UK online retail sales grew strongly during 2018, as the hot weather and start of the FIFA World Cup spurred a 16.9% year-on-year (YoY) growth of retail sales.  Both multichannel and online only retailers performed well (14.8% and 18.7% respectively), demonstrating a general taste for spending in June.  The largest sector increase was seen in garden, with a 49.9% YoY growth.  This was followed by fashion accessories at 23.9%, footwear at 22.7% and clothing with a YoY growth of 19.3%,.  Health and beauty and gifts sales were slightly more subdued with 9.9% and 10.5% YoY growth respectively. 

Domestic eCommerce (B2C)

The main rules covering sales on the Internet are The Consumer Contracts Regulations 2013  and  The Consumer Contracts (Amendment) Regulations 2015.  These set out the rights consumers have when making purchases over the Internet in the EU.

UK Online Distance Selling.

Cross-Border eCommerce

There is a special scheme for non-EU companies selling ‘downloadable software’ via the Internet to clients within the EU.  This type of transaction is classified by the EU as an “electronically delivered service”.  Non-EU companies selling downloadable software to EU customers must be registered for VAT in at least one member state within the EU. There are different requirements for accounting for VAT depending on whether the customer is a corporation or an individual and depending on where the customer is physically located.  This is a complex subject and companies should either engage an accountant to advise them or ensure that they are familiar with the regulations. For more information about the UK’s "Electronically supplied services: Special Scheme for non-EU businesses", companies should visit VAT MOSS website 

B2B eCommerce

B2B eCommrce is not as prevalent as B2C or C2C ecommerce in the UK.  Many large companies have online procurement protals, but these are not open platforms.  B2B eCommerce platforms are emerging, however, and these will become a facilitator of both domestic and international business.  An example of such a platform is Applegate.

eCommerce Services

There are many UK companies that provide eCommerce services to create and run platforms.  The sector is well-served by such firms given that the Uk is a world leader in eCommerce.

eCommerce Intellectual Property Rights

The UK legal system provides a high level of intellectual property rights (IPR) protection.  Enforcement mechanisms are comparable to those available in the United States.  The Intellectual Property Office (IPO) is the official UK government body responsible for intellectual property rights including patents, designs, trademarks and copyright.

Popular eCommerce Sites

Internet Retailing published its 2017 Top 500 UK online retailers recently.  It lists six companies in the elite category:

Amazon - eCommerce
Asda – Groceries, Clothing and Homeware (Walmart subsidiary)
Boots – Beauty, Health and Pharmacy
John Lewis – Department store
Marks and Spencer – Groceries, Clothing and Homeware
Tesco - Groceries, Homeware, Electricals and Clothing
The full Top 500 list can be found on eCommerce news.

Online Payment

Almost all UK-based online businesses allow customers to use credit or debit cards. Visa and MasterCard are almost universally accepted, while American Express, Diners Club and JCB, less so.  Many websites use Pay Pal or other similar services.  UK consumers are becoming much more aware of the issue of online identity theft and will generally only conduct financial transactions on secure websites.

Mobile Commerce

Ecommerce purchases made via smartphone have overtaken those made via tablets.  In 2017 online sales made via smartphone represented 49.7% of all ecommerce salses and was worth an estimated $23 billion in the UK.  It is forecast that online purchases made via smartphone will represent around 56% of all ecommerce sales by 2021.

Digital Marketing

There are some restrictions on general advertising.  In the UK, the ‘watchdog’ for advertising is the Advertising Standards Authority (ASA).  The ASA is an independent body set up by the advertising industry to police the rules laid down in the industry’s advertising codes.  The advertising codes are drawn up by the Committee of Advertising Practice (CAP) and are in place to protect consumers and create a level playing field for advertisers.

Key links:

Advertising Standards Authority
Committee of Advertising Practice

Comparative ads are allowed, but they must not be disparaging.  Advertising to children is more closely regulated.  The general rule is that special care should be taken when promotions are targeted at children (people under 16) or when children may see ads intended for adults.
It is possible to use prize giveaways, etc., as incentives.  Promotions with prizes, including competitions, prize draws and instant win offers, are subject to legal restrictions.  Promoters usually seek to avoid running illegal lotteries by running skill- based prize competitions or by offering free entry if the chance-based prize promotion might encourage purchase.

As a general rule, the Internet in the UK looks and feels identical to the U.S.  Pop-up ads are not prohibited and, indeed, are quite common.  As a result, many users turn on the anti-pop up features in their browsers.

Spam is covered by the Privacy and Electronic Communications (EC Directive) Regulations. In summary, the regulations require UK or EU-based businesses to gain prior consent before sending unsolicited advertising e-mails to individuals.  This consent must be explicitly given by individuals on an opt-in basis except where there is an existing customer relationship. The regulations also require that the use of cookies or other tracking devices are clearly indicated and that people be given the opportunity to reject them.

Spam is, however, a worldwide problem and there is little that regulators can do to prevent Spam originating from outside the EU.  Many email systems have increasingly effective Spam filters.

Major Buying Holidays

The main buying holidays in the UK are Easter, Black Friday, which is rapidly morphing into a three-week shopping spree, Christmas and New Year.

Social Media

Eighty three per cent of adults aged 18 or over accessed social media sites in the first 3 months of 2018.  Popular social media services in the UK include:


UK Users %

















Source: We are Flint

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