One in three UK online retailers are planning to expand into China, others into India and the US.
A new report commissioned by business process outsourcing provider (BPO) arvato and World Business Research (WBR) finds the UK’s eCommerce business leaders are turning their attention to the high growth consumer markets as they seek growth.
The research, which surveyed 78 UK eCommerce CEOs, managers and executives working in the beauty, fashion, FMCG and luxury sectors, reveals that 37 per cent of British firms are looking to grow their eCommerce offerings in the US, with 33 per cent and 30 per cent targeting the Chinese and Indian markets respectively.
One in four are planning to expand their business into Europe, with a third of the companies researched already having an online presence on the continent.
UK firms in fashion and beauty eCommerce are set to be the most active in China, where 42 per cent plan expansion there.
However a full third of those companies have not set a timeline for such expansion, and just 15 per cent have planned within one to two years.
Tony Matthews, head of eCommerce at arvato UK, comments: “International markets have a lot to offer British firms in eCommerce thanks to increasing activity on digital channels and a growing volume of digital savvy, middle class consumers with high purchasing power. However, establishing a new market presence can be a considerable challenge, and the high percentage of undefined timescales highlights nervousness among companies when it comes to expanding into new regions.”
Matthews said in light of this, UK firms are increasingly looking for help, and are turning to external partners for assistance in handling parts of their eCommerce business.
The research found outsourcing to be a popular strategy for firms handling eCommerce with 47 per cent using an external provider to deliver one or more functions – online marketing, logistics and fulfilment as well as website operation and development are the most popular functions for businesses to source outside the firm.
A high proportion of those in fashion – 57 per cent – are using an outsourcer, with 37 per cent contracting out their website development, which is more than double that of the other three industries researched. However, while only 24 per cent of those in the luxury sector have an outsourcing partner, over a third engage an external supplier to deliver their online marketing.
Over half of firms considering external providers plan to use them in their operations on the continent, with the main focus on customer care and forward and reverse logistics. This is in contrast to 14 per cent in the US and 29 per cent across APAC.
Matthews added: “International growth into new regions requires in depth regional knowledge, technical capability and supply chain expertise, and external providers can help companies deliver successful market entry. Outsourcing can lower the barriers businesses face when expanding into new markets, providing the necessary economies of scale and local know-how to deliver successful expansion.”
The full report can be read online.
