UK lagging behind in online international sales

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New research from online payment service PayPal reveals that just over half of the UK’s online small businesses are selling to customers abroad.

The survey found that only 56% of British online businesses sell abroad, despite extraordinary demand for UK goods. Business owners are said to be deterred by the high cost of shipping goods to international customers, and among domestic-only businesses, only 35% intend to start selling internationally in 2016

Conducted by Ipsos MORI on behalf of PayPal, the survey questioned more than 1,200 small and medium-sized businesses in major online retail markets – including the UK, the US, France, Germany, Italy and Spain – to find out about their international sales strategies. The results show that more online businesses in France (64%) and Spain (61%) have capitalised on international sales than in the UK.

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This news comes despite an earlier PayPal study suggesting that there is higher consumer demand for British goods over goods from any other major European market. An estimated 86.4 million online shoppers from 29 countries have bought from the UK in the last 12 months.

A quarter of businesses (25%) cited shipping and the associated costs as the top barrier to selling abroad while customs and duties (20%) were the second most cited concern. Conversely, the single most attractive driver for shoppers buying from overseas is free delivery.

Simon Moran, senior director of strategic client services at PayPal UK, says: “The UK is more popular than ever as a destination for online shoppers worldwide and 2015 proved to be a real tipping point. With more than 179 million active customer accounts around the world, PayPal is in a unique position to help British online businesses reach a global customer base. Simple changes to your online store such as accepting multiple currencies, offering different languages, and keeping shipping costs low can have an immediate impact on sales.”

According to the survey respondents, international online sales among UK small businesses are currently dominated by customers closer to home with combined sales to European countries accounting for 61% of total cross-border sales value. North America is named as the UK’s second largest market generating 20% of UK online sales, and Asia comes third with 6% of international sales.

 Moran added: “It’s crucial for businesses to adapt their business and marketing strategies when engaging overseas shoppers. Over a third (38%) of online shoppers rely on search engines when looking to buy from abroad, so it’s important to get to grips with SEO, as well as social media networks, which attract huge followings. By taking some small steps, UK online business could reap big rewards as online international sales continue to grow.”



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Naida Redgrave

The author Naida Redgrave

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