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Brexit’s Hidden Impact on E-commerce

As the UK's e-commerce landscape continues to evolve, a new reality has emerged: Brexit has brought about significant disruptions to the industry, particularly for British brands and retailers seeking to expand their reach across the EU. According to a recent report by Retail Economics and Tradebyte, the value of non-food retail exports from the UK to the EU has plummeted by £5.9 billion since the initial Brexit vote.

Brexit’s Hidden Impact on E-commerce
Source: Depositphotos

The numbers are stark: while online retail is expected to add £323 billion to EU economies annually, additional trade frictions have curtailed this opportunity for UK-based businesses. The value of non-food retail exports has fallen by almost 18% since 2019, with the Clothing & Footwear sector being particularly hard hit.

The decline is attributed to a range of factors, including escalated logistics costs, the complexity of registering an EU entity for trading, and increased delays in an already competitive market. The apparel sector, once a top three exporter, has seen a dramatic decline in export values, with Health & Beauty, Electricals, and DIY & Gardening becoming the dominant categories.

Source: Channelx.world

Despite these challenges, there is a silver lining. Online marketplaces have emerged as a vital channel for UK brands and retailers to navigate the new trading landscape. With over two-fifths of the EU’s £322.6 billion annual online non-food sales now taking place through marketplaces, these platforms offer a streamlined path to access affluent and younger consumer demographics.

The concentration of sales among the largest EU markets means that the top 10 online markets account for the lion’s share of non-food online sales, with marketplace sales alone accounting for at least £133 billion of EU e-commerce. This presents an opportunity for UK brands and retailers to adapt and thrive in the new landscape.

Source: Channelx.world

To succeed, businesses will need to prioritize agility, innovation, and customer engagement. By leveraging online marketplaces and developing strategies to navigate the complexities of the new regulatory landscape, UK brands and retailers can mitigate the impact of Brexit and capitalize on emerging opportunities.

While Brexit has brought about significant challenges for UK e-commerce, it has also presented opportunities for growth and adaptation. As the industry continues to evolve, it is essential for businesses to stay ahead of the curve and seize the moment to drive innovation and success in the digital economy.

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