Brexit vs eCommerce - do we need to worry?

I don't think there's any point in talking about anything else this week; the conversation around a British exit from the European Union is very much in the throes.

The reality is, the EU is the biggest consumer market in the world, and we absolutely need to trade within it. However, there are some hidden opportunities and threats for the e-commerce innovator, the platform owner, and the perennial digitally focused professional.

The EU has no e-commerce platform

This might sound like insanity, but it's a fact. China has the behemoth Alibaba, the US has household name Amazon, and Japan has Rakuten - all of which are growing rapidly.

So, as you might have deduced, and as we increasingly move towards digital everything, a lack of a serious European player is of critical weakness. The UK can deliver this for the rest of Europe.

The future is e-commerce

An ever-increasing share of global trade is playing out online, with all things conventional in decline. This is true in a number of ways; most companies are looking at how to become a platform, shipping companies want to move into logistics and drop shipping if not fully-fledged e-commerce platforms themselves.

The world economy is changing, and there's a lot of opportunities hidden in embracing that change. The UK is well prepared to embrace the change.

The EU has failed to adapt to digital

Now this, I say with a heavy heart. I've been involved in looking at digital agenda setting in the EU for years, but it would be a stretch to claim that the EU is ready for a wholesale digital future.

In this, the UK is the European benchmark - clocking up three times more in e-commerce trade last year than the nearest competitor, Germany. The UK is already ahead of the game.

British consumers will spend less abroad

As we've seen recently, the pound has declined since the Brexit vote. Which is good for UK based retailers; due to the fact that most of us shop internationally. We won't be spending our hard earned currency on dollar items from the US anymore - because they all just became much more expensive.

However, for European citizens, the devaluation of the British pound will make products and services purchased from British companies cheaper if they pay in another currency.

There's already a major run on ASOS from the Netherlands, with Dutch consumers getting great deals. It's terrible for the British consumer, but profitable for British e-commerce.

Reaching a UK market will be more complex

Cross-border sales are going to be more difficult for US-based companies. For instance, where items land in an EU fulfilment centre for Amazon, those items are available for Prime across the EU.

Eventually, the UK will have to be catered to separately. Which of course, drives up costs and makes the UK a more difficult market to reach. The UK can't really deal with this, short of staying in the EU.

All things considered, there is some potential for e-commerce. That potential ultimately depends on what we do with it.

*The content and opinions expressed in this article are the author's own.

If you would like to learn more about the world of eCommerce then check out the IDM's one day eCommerce Strategy course. Develop the skills and confidence to devise and implement an eCommerce strategy that gets results in the face of ever-changing technology and consumer expectation.

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