Home Business News UK’s e-commerce market to grow to €231bn by 2021

UK’s e-commerce market to grow to €231bn by 2021

by LLB Reporter
18th Jul 19 12:02 pm

Research compiled by J.P. Morgan shows the e-commerce market in the UK is expected to grow 9% per year over the next three years, with the market projected to be worth €231.2bn by 2021. Today, the UK represents more than 30% of the total European e-commerce market.

J.P. Morgan’s 2019 Global Payments Trends Reports, which analysed e-commerce and payment trends in 34 countries, including 18 in Europe, reveals that while the UK is set to maintain its position as the largest e-commerce market in Europe, its growth may be outstripped by ten other European countries predicted to experience double-digit e-commerce expansion between now and 2021. Of these, the Czech Republic (16%), Italy (14%) and Spain (13.5%) rank highest for forecasted growth.

Ray McDonnell, Managing Director at J.P. Morgan Merchant Services Europe said, “The UK remains the titan of the European e-commerce space, dwarfing the next largest markets of France and Germany.

“While the UK’s e-commerce market will remain healthy, this year’s exit from the EU and the maturity of the market may slow that growth somewhat. We expect stronger growth to occur in newer online economies like Italy and the Czech Republic which have the conditions for significant market expansion.”

France (€81.7bn) and Germany (€73bn) are the second and third largest e-commerce markets respectively today, together representing a third (33%) of all e-commerce activity in Europe. The UK is expected to experience a deceleration in e-commerce sales growth in the coming years as a result of market maturity, Brexit-related uncertainty and its receptiveness to seasonal trends, major public events and holidays.5 This slowdown is also expected in other mature European e-commerce markets.

E-commerce growth in the Czech Republic is likely to be supported by its comparatively high ratio of online stores per capita. Italy’s growth is anticipated to be driven by cross-border purchases; 40% of Italian e-shoppers made an overseas purchase in the past year. Finally, Spain’s growth is expected to be underpinned by ongoing investment in e-commerce from dominant domestic players.

Country e-commerce market size (EUR) Predicted CAGR

(2018 – 2021)

UK 178.5 billion 9%
France 81.7 billion 11%
Germany 73 billion 7%
Spain 30.4 billion 14%
Netherlands 22.5 billion 11%
Italy 21.2 billion 14%
Denmark 15.4 billion 11%
Sweden 12 billion 9%
Norway 10.9 billion 13%
Switzerland 10.1 billion 8%
Belgium 10.1 billion 9%
Poland 9.9 billion 10%
Austria 9.2 billion 8%
Finland 8.5 billion 11%
Ireland 7 billion 9%
Czech Republic 4.4 billion 16%
Portugal 4.3 billion 12%
Luxembourg 0.7 billion 8%

 

Mobile commerce and digital wallets both gaining ground

Across Europe, mobile commerce is set to be a main driver of e-commerce growth. Last year the total value of mobile payments in the UK was €91bn, accounting for more than half (51%) of the total e-commerce spend in Europe. Over the next three years, it is predicted that mobile e-commerce will grow at a rate of 20% per year, to become a €188.8bn market by 2021. Ireland, the Czech Republic, Norway and Sweden also stand out as key adopters of mobile-based payments.

Card payments continue to dominate transactions in Europe with more than half (53%) of e-payments in 2018 made by card. However, it is expected that digital wallet transactions will see the most growth over the next three years. Between now and 2021, digital wallet payments are set to grow at twice the rate of cards in the UK – with a compound growth rate of 15% and 6%, respectively.

McDonnell said, “Card payments remain UK consumers’ favourite when it comes to buying online, but paying via a digital wallet app is becoming increasingly popular.

“As biometric security options increase on smartphones and two-factor authentication becomes obligatory under PSD2, we may see an even greater uptake of mobile-based e-commerce compared to desktop-based transactions.”

 

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