United Kingdom E-Commerce Market Report and Forecast 2024-2032

United Kingdom E-Commerce Market Outlook

The United Kingdom e-commerce market size reached approximately USD 234.37 billion in 2023. The market is projected to grow at a CAGR of 7.9% between 2024 and 2032, reaching a value of around USD 475.06 billion by 2032.

Key Takeaways

• The United Kingdom boasts the highest proportion of international retailers and is the largest e-commerce market and mobile retail sector in Europe.

• As of January 2021, e-commerce accounted for 36.3% of the overall retail market in the United Kingdom.

• In the UK, individuals aged between 25-34 years are the most prolific online shoppers, influenced by convenience and attractive offers.

Customers prefer e-commerce platforms as they facilitate flexibility and convenience. E-commerce channels have numerous advantages, including a rapid buying process, product and price comparison, discounts, and cost reduction, among others.

The United Kingdom is the third largest e-commerce market in the world, after China and the United States. The United Kingdom e-commerce market growth is being fuelled by the growing smartphone market penetration, the increasing number of internet and social media users, and the rising population in the country. Nearly 2/3 of the e-commerce sales in the UK are made via smartphones.

Key Trends and Developments

Rapid digitalisation, the rise of digital payments, the integration of AI and automation in e-commerce platforms, and the rising trend of sustainability are positively impacting the market growth

United Kingdom E-Commerce Market Trends

Digital payment options are revolutionising the online retail sector by accelerating checkout processes, facilitating fast transactions, reducing cart abandonment, and improving customer experience. Retailers are also integrating digital payment into their e-commerce strategies to enhance efficiency, boost sales, reduce costs, and minimise human errors.

The emergence of social commerce is anticipated to bolster the United Kingdom e-commerce market expansion in the forecast period. Platforms such as Instagram, Pinterest, and Facebook have emerged as e-commerce channels, enabling businesses to sell their products to potential customers.

The deployment of artificial intelligence in e-commerce platforms is further stimulating the market growth. For instance, e-commerce virtual assistants and voice commerce use machine learning and language processing to comprehend customers’ queries and offer needed assistance. Besides, the increasing demand for personalised shopping experiences and product recommendations by customers is surging the integration of AI in online retail platforms.

Market Segmentation

“United Kingdom E-Commerce Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

The demand for beauty and personal care products from online channels is rising, owing to their convenience and price benefits

Beauty and personal care products hold a substantial share of the United Kingdom e-commerce market. This can be attributed to convenience, accessibility, wide product range, ease of checkout, and effortless returns and exchanges offered by e-commerce channels. Moreover, enhanced personalisation, customised recommendations and ads, and tailor-made price promotions enabled by the online retail sector are further boosting online sales of beauty and personal care products.

Brands are integrating innovative technologies into their e-commerce platforms to ease virtual try-ons and enhance the accessibility of beauty and personal care products among the specially-abled. For instance, in January 2023, The Estée Lauder Companies UK & Ireland launched its AI-powered mobile app, Voice-Enabled Makeup Assistant (VMA) application, to support visually impaired customers to easily apply makeup. The app is available via Estée Lauder’s UK site and the Apple App Store in the UK.

The United Kingdom e-commerce market is also growing at a healthy pace as a majority of customers in the UK prefer to buy consumer electronics online due to attractive discounts and deals. Easy return policies, coupled with buyers’ product reviews, are further boosting sales of consumer electronics from e-commerce channels. Brands are also formulating innovative strategies like optimising their product pages and utilising multichannel marketing to cater to evolving customer demands and drive conversions.

Besides, the sales of fashion and apparel from online channels are expected to grow in the coming years, with customers seeking time-saving and comfortable shopping experiences. With fashion brands attempting to offer omnichannel and seamless shopping experiences to customers, they are foraying into the online retail sector.

In addition, increasing partnerships between fashion companies and logistics and delivery partners to facilitate rapid delivery of apparel and fashionwear is fuelling the United Kingdom e-commerce market growth. For instance, in December 2023, Vinted, an online platform, partnered with parcel carrier Yodel, to enhance its delivery experience and assist fashion enthusiasts to easily and rapidly receive items.

Competitive Landscape

Major players included in the United Kingdom e-commerce market report are integrating innovative technologies to offer personalised experiences to customers:

Other United Kingdom e-commerce market players include Currys plc, John Lewis plc, Tesco plc, and Asda Group of Companies, among others.

Key Highlights of the Report