A new Office for National Statistics (ONS) report into the digital economy has revealed UK businesses’ online sales doubled from £227.4bn in 2014 to £459.2bn in 2021.
Retail was by far the highest generator of website sales; 34.5% of all retailers sold online in 2021 and 18.1% of wholesalers. In contrast, only 15.9% of manufacturers and 8.3% of information and communication businesses sold directly online.
The home delivery expert ParcelHero says the new report reveals some surprising insights into the state of the digital economy. ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘UK businesses’ website sales boomed in 2021. The value of British-based businesses’ online sales to UK customers was £381.4bn and sales to overseas shoppers added a further £77.8bn.
‘Britain’s smallest and largest businesses have benefitted the most from the online boom. This first-ever ONS Digital Economy report reveals 40.8% of all businesses employing over 1,000 people sell online, achieving UK website sales of £210.5bn in 2021. However, at the other end of the scale, microbusinesses employing fewer than ten people still sold an amazing £49.2bn of products and services online in the UK.
‘That’s an astonishing achievement by the nation’s smallest employers. In fact, UK microbusinesses’ online sales far eclipsed those of larger businesses employing up to 249 employees (£18.2bn).
‘UK companies’ sales on their own websites and apps significantly exceeded those achieved on online marketplaces and social media sites in 2021. Their domestic website sales were worth £353.8bn. In contrast, their marketplace sales were worth £25.2bn and their social media sales just £2.2bn. Considering the focus many businesses placed on social media in 2021 (which was at the peak of Covid lockdowns) that’s a surprisingly low amount.
‘Britain’s businesses didn’t hold back when it came to expressing their difficulties with selling via online marketplaces, listing:
- The cost of fees and commission charged by the platform
- The processing of payments and refunds
- Communication issues
- Terms and conditions (T&Cs) issues
- Changes to accounts and/or product listings made by the platform
‘Turning from domestic to overseas markets, UK companies’ online sales to overseas customers from their own websites or apps were worth £75.4bn in 2021 and overseas sales from online marketplaces £2.4bn. Sales to customers from outside the UK made on social media were too low to be recorded. The chief gripe for UK businesses selling to the EU was the high cost of delivering or returning products.
‘Analysing these results, though UK website sales were dominated by businesses with 1,000 or more employees, accounting for 59.4% of total UK website sales, it’s perhaps businesses at the other end of the scale that impress the most. Not only did those companies employing fewer than 10 people achieve £49.2bn of UK sales, but also overseas sales of £4.1bn. That’s a combined online sales total of £53.3bn. Proportionately, our smallest businesses punched far above their weight in 2021.
‘However, only 10.4% of Britain’s smallest companies sell online, leaving many of our most treasured microbusinesses still without a web presence. As retail settles to a new equilibrium, it will be those retailers, large or small, with strong in-store and online sales that will ultimately triumph in a post-Covid world. ParcelHero’s influential report “2030: Death of the High Street” has been discussed in Parliament. It reveals that, unless retailers develop an omnichannel approach, embracing both online and physical store sales, the High Street as we know it will reach a dead-end by 2030.
