This is the first in a series of articles looking at the economic ties between the UK and Europe from the perspective of ecommerce in particular. As ever on eDelivery, we welcome comments and contributions from readers. So please feel free to drop us an email or leave a comment at the end of this piece.
Western European markets make up more than 50% of UK ecommerce exports and, with a referendum on membership of Europe set to take place before the end of 2017, a British exit from the EU has the potential to harm the country’s balance of payments.
Following the decisive ‘No’ vote in the Greek bail-out referendum, these are some of the findings of the Volo Online Retail Export Index, which shows the extent that trade with its European neighbours is now fundamental to the UK’s economic well-being, and dwarfs the levels of trade with the US.
Export accounts for almost 20% of the developing online retail economy in the UK, the Volo research found, with France and Germany alone constituting 40% of the exports for UK-based etail SMEs.
“The online, multi-channel entrepreneurs of UK plc are clearly making real progress in developing Europe as an export market,” said Paul Watson, CEO, Volo. “It is often tempting to see the US as the big market to crack, but our figures show that the trading relationship with Europe is as important for the new generation of online entrepreneurs as it has been for older businesses. Export is a critical part of the thriving and rapidly developing online retail sector in the UK and much of this growth and success depends on the UK staying within the EU.”
In addition to Germany and France out-ranking levels of exports to the US, Italy and Spain are also important – and growing – European markets for UK etailers. Other, non-European countries within the top 10 export destinations include Australia and Canada.
Watson continued: “Online retail has caught up to the balance of the rest of the UK economy in record time. Europe accounts for 50% of all UK exports of goods and it is very impressive that the online community has achieved this figure in such a short period of time.”
Belgium, Sweden and Ireland are the most valuable European export destinations, in terms of the highest average value per parcel shipped there from the UK.
Current levels of instability in the Eurozone have had a knock-on effect on exports, according to the Confederation of British Industry (CBI), which has sounded a note of caution over the relative strength of Sterling against the beleaguered euro.
“We expect the economy to sustain a solid pace of growth over the remainder of the year as lower oil prices and inflation continue to boost real incomes and consumer spending,” said CBI director of economics, Rain Newton-Smith.
“But exporters face real challenges, especially from the impact of a stronger pound against the euro and still weak global export markets.
“And whatever the results of the referendum in Greece, we urge Eurozone leaders to move quickly towards a deal that underpins both growth and financial stability, providing certainty for Greece and the wider Eurozone.”
According to research recently conducted by FedEx, European markets are a key destination for 96% of UK SMEs who export. The average UK SME exports £553,000 worth of goods to countries in Europe, and imports £535,000 – creating an average net surplus of £18,000 and contributing to the UK’s balance of payments.