Online shopping forecast to grow by £320bn by 2018
Research suggests collective value of online shopping in US, China, UK and Germany will double by 2018 to £645 billion.
The four largest online shopping markets in the world will continue to grow over the next three years, with new research suggesting that the size of the market will double to £645 billion by 2018.
The study from OC&C Strategy Consultants, PayPal and Google notes that there will be a huge opportunity for UK retailers to profit from this expansion, however, many are only do the bare minimum to capitalise on their popularity abroad.
Online retail shows no signs of slowing and the next three years should see the market expand by another £320 billion. The research revealed that Britain is the most popular online overseas destination for shoppers from Germany and is the second favourite in both China and the US.
Furthermore, shoppers from China and Germany spend on average 2.7 and 1.7 times more, respectively, in each transaction than shoppers from the UK - making them especially valuable customers.
“The study has shown that UK retailers are some of the world’s most popular and are in a strong position to seize more opportunities abroad,” said Anita Balchandani, head of retail at OC&C.
“But at the moment, the majority are only doing the basics to adequately serve foreign markets, for example, by offering international delivery on their UK website and working with partners to provide local returns addresses.”
Figures from the study, Cracking the World’s Largest ecommerce Markets, show that British online retailers have the potential to earn up to 60 per cent more just by tweaking their strategies to accommodate overseas consumers - including responding actively to local payment preferences, adding infrastructure to match local competitors on speed, and building trust with local consumers.
With the right strategy the report points out that UK retailers could even treble their international customer base in well-established markets like the US.
“Those retailers that are going deeper are already reaping the rewards,” added Ms Balchandani.
The biggest draw for international customers is the ability to buy unique products that are unavailable in their own county, with two-fifths (40 per cent) citing this as the number one reason. In addition, one-third (33 per cent) mentioned pricing as the deciding factor, while 29 per cent said trust around the quality was the most important driver.
Meanwhile, the biggest barriers for cross-border customers was data security, trust in the retailer and ease of returns.