Chapter 2: drivers for e-commerce
The e-commerce sector is showing rapid growth in the UK economy - 14% year-on-year (Source: IMRG) and is predicted to sustain this level. What are the factors that have driven this growth and what are the benefits to the 31% of our sample of British small businesses that only trade online?
59% of UK small business managers think that the main benefit of trading online is that they have greater reach and therefore more customers
In the current downturn enterprise activity in Britain has suffered, with 0.4% decrease in enterprises registered in 2009 from 2008 (Source: Office for National Statistics), but not to the extent that some commentators feared. In adversity, innovation has provided new opportunities for revenues. Over 800 entrepreneurs and small businesses that we surveyed were forthright in their confidence in e-commerce across a broad range of sectors.
- More customers, greater profits - 59% of UK small business managers think that the main benefit of trading online is that they have greater reach and therefore more customers
- Operating in a global marketplace - 36% of British entrepreneurs believe that the main benefit of online trade is being able to trade in a global market
- Driving cost efficiency - 34% believe that their business is more profitable due to the cost efficiency of e-commerce
- Lower overheads - 22% have made their operations leaner with reduced staffing
- Increased reach and more revenues - In addition, 17% have found new and lucrative markets
It is clear that by gearing a business for the online marketplace you substantially increase your opportunities to make sales. The internet sees no boundaries and can provide cost-efficient access to a global customer base. This has been the case for business since the web first became a medium for commerce - what has changed is the way organisations have to structure their operations to serve a broad range of customers with limited resources.
Our survey has shown that travel, telecommunications and medical services organisations have had to adapt the most to reap the benefits of e-commerce, with the majority of booking and payment facilities moved online. More traditional organisations in the automotive, construction and financial services industries told us they have also been able to realise substantial cost efficiencies with a move to trading online.
The advantages to an online trading platform are straightforward however, there are barriers to adoption. To find out more click here for the next chapter.
To read this chapter in its entirety, go to the full report.
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