United kingdom Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in united kingdom, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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eCommerce
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Overview

eCommerce revenues in the UK are expected to have an annual average growth rate of 12.6% by 2025.

The UK has the third largest eCommerce market in the world after China, and the U.S. Consumer eCommerce now accounts for 36.3% of the total retail market in the UK (as of Jan 2021), with eCommerce revenue projected to increase to $285.60 billion dollars by 2025.  In 2022, UK online sales saw its highest annual growth since 2007 with sales increasing by 36%.

The key digital figures for the UK in 2022/2023:

  • Population: 67.7 M
  • Mobile phone connections: 71.8 M 2022
  • Internet Users: Approx 66 M users
  • Active social media users: 57 M

Top eCommerce products/services in the UK are:

  • Fashion
  • Electronics
  • Toys, hobby & DIY
  • Beauty, health & care
  • Furniture
  • Media
  • Food and Beverages

The biggest player in the UK eCommerce Market is amazon.co.uk. It is followed by Sainsburys.co.uk, then tesco.com.

Consumer Behavior

People continue to look online for the best deals and prices. This is driving the proportion of money being spent online. 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 via a 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 a key channel in which firms are most likely to be boosting their investment in e-commerce in the next couple of years. The strength of online sales contrasts with the stagnation in bricks-and-mortar retailing, with a number of physical stores falling into administration or bankruptcy.

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 conduct financial transactions only on secure websites.

Ecommerce purchases made via smartphone have overtaken those made via tablets, with online sales made via smartphone representing well over 2/3 of all ecommerce sales.

Legal & Regulatory environment towards eCommerce

U.K. law governing the conduct of business online is set out in various statutory instruments. Following the UK withdrawal from the EU there may be greater disparities between the two sets of laws in the future. Effective January 2021, the 2002 EU eCommerce Directive no longer applies in the UK. Other laws and rules to be aware of:

  • The Consumer Rights Act 2015 covers UK consumer rights legislation, including statutory implied terms in consumer contracts and the remedies for breach available to the consumer.
  • The Consumer Contracts Regulations 2013 places additional obligations on website operators who deal with consumers as well as introducing cancellation rights for consumers.
  • The Consumer Protection from Unfair Trading Regulations 2008 prohibits various unfair practices by traders, such as misleading actions or omissions, and include a “blacklist” of prohibited commercial practices.
  • The Provision of Services Regulations Act of 2009 requires traders to specify information available to customers and meet certain standards when handling complaints.
  • The UK GDPR contains provisions around the use of personal data, including concerning website users.
  • The Privacy and Electronic Communications Regulations 2003 governs direct marketing (both solicited and unsolicited) by means of electronic communication.
  • The Online Intermediation Services for Business Users Regulations 2020 imposes obligations on providers of online platforms or search engines that are used by businesses to reach consumers.
  • 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 protection including patents, designs, trademarks, and copyright.

B2B Contracts

Businesses must comply with the E-Commerce Regulations. Other statutory provisions apply to contracts formed online as they would do to a contract formed by other means including the:

  • Sale of Goods Act 1979
  • Supply of Goods and Services Act 1982
  • Unfair Contracts Terms Act 1977 (UCTA).

Annual Digital Events

Local service providers

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.