For any US eCommerce business thinking about expanding overseas, the UK is a very attractive option. With a population of over 68 million people and an Internet penetration rate of 98%, it holds huge potential for US companies that are looking to expand across the Atlantic.

Entering the UK market is an exciting prospect, but it can be overwhelming, intimidating, and fraught with potential hazards. In a recent article, we explored some of the most common mistakes that US eCommerce companies make when entering the European market.

In this article, however, we’ll outline some of the key advantages of expanding your eCommerce business into the UK, and we’ll share some of our best tips and strategies for success.

Trends in the UK market

The UK is the world’s fourth-largest market for eCommerce, with a revenue of US$118 billion in 2021. According to the 2022 Global Payments Report, it is expected to increase by nearly 26% between 2021 and 2025, reaching over £260 billion in transaction value.

The UK had the biggest B2C eCommerce market in Europe in 2021, with UK consumers spending over €250 billion on online purchases. New markets continue to emerge while existing markets also have the potential for further development.

The biggest sectors are fashion (worth $32.5 billion), followed by toys, hobby and DIY ($17.7 billion), and electronics and media ($16.4 billion). Food and personal care is the fastest-growing sector (15.8%), followed by toys, hobbies and DIY (8.4%) and fashion (8.1%).

Benefits of UK expansion for your eCommerce Business

The UK is an attractive location for international companies due to its competitive corporate tax regime and high levels of transparency in conducting business.

Here are some of the main advantages for US companies in particular:

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Affluent customers who are comfortable shopping online

The UK is one of the top countries in the world when it comes to online shopping penetration, with 93% of consumers aged 15 to 79 shopping online. UK customers are highly sophisticated in their online shopping habits and quick to embrace new ways of discovering and purchasing items.

Western culture

There are many cultural similarities between the US and the UK, which makes for a smoother transition and settling-in period.

A predominantly English-speaking population

You’ll save on translation and localisation costs as there will be no language barriers to overcome.

Access to diverse and growing markets

The UK is home to several fast-growing markets, including Fintech, SaaS, B2B services, gaming, healthcare, and cyber security.

Highly developed infrastructure for any eCommerce Business

The UK is widely regarded as one of the easiest countries in which to set up a business, thanks to its highly developed eCommerce infrastructure

The growing popularity of social commerce

According to the Q1 2022 Global Social Commerce Market Survey, around 80% of consumers in the United Kingdom used social media platforms for shopping in 2021.

Access to an educated, highly skilled talent pool

London is a hub for international talent, with more qualified software developers and AI experts than any other European city.

58.5% of its workforce are educated to at least a degree level, and the city has been voted the most appealing location for global workers.

Access to freeports

Freeports are areas that are exempt from customs duties, VAT, and other taxes, making them great for processing imports. They can help businesses to achieve significant cost savings, especially those who are moving products internationally.

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Tips for expanding your eCommerce Business into the UK

Conducting research is the first step in laying the foundations for a successful expansion. During the initial research phase, you should:

  • Assess the current size of the opportunity
  • Identify your target audience and its demographics
  • Research whether your industry is growing via online channels
  • Familiarise yourself with your competitors
  • Identify customer niches for your offering
  • Identify the most effective online channels for reaching your target audience

Next, you need to look at the operational aspects of your business and how well it is set up to serve customers overseas. Things to consider include:

  • Changes to supply chain, logistics and inventory management
  • The ability of your suppliers to scale up
  • Developing efficient storage, delivery, and returns processes for UK customers

The next step is developing a strategy for raising awareness and building relationships with prospective UK customers. The market is evolving at a rapid pace, so you must ensure that your offers and messaging are compelling and up to date. As your business becomes more established in the UK market, make sure you continually seek out opportunities for increasing profitability.

Your UK-based order fulfilment solution

Expanding into the UK has many economic advantages for US eCommerce businesses, and could pave the way for further expansion in other countries. Make sure you give yourself the best chance of success by partnering with a 3PL provider you can trust.

At ParcelPlanet, we offer customer-centric order fulfilment solutions that can help your business achieve rapid growth.

With decades of experience behind us, we are perfectly positioned to help US businesses expand into the UK eCommerce market.

Contact us today to find out more!