Comparative analysis of the UK and Italian e-commerce markets

As the third largest e-commerce market in the world, the UK’s online retail sales reached US$142 billion in 2020, second only to China and the United States. The proportion of online shoppers in the UK is as high as 95%, and the per capita online shopping consumption is the highest in Europe. In 2021, 91% of online shoppers in the UK have used the Amazon platform, and Amazon’s sales in the UK reached 23.6 billion pounds. Followed by eBay, the proportion of online shoppers reached 63%; Wish ranked third with 11% usage proportion.

Consumption characteristics

The consumption characteristics of the British are deeply influenced by their gentlemanly demeanor. They pay special attention to etiquette and pursue product quality and details. In addition to electronic products, the most popular products for British people to buy online include clothing and sports equipment. Less than one in 10 consumers choose to buy bicycles, motorcycles, cars and other transportation vehicles online. In the past three years, the top three categories of Chinese-made products favored by British consumers were wigs, women’s clothing and jewelry. Chinese cross-border e-commerce sellers should conduct localized operations based on British consumption characteristics, understand British history and festivals, and plan corresponding activities.

Tax implications

After the United Kingdom officially “Brexit”, the government issued a new VAT (value-added tax) policy, ended free circulation with other EU countries, and began to collect VAT, which had a greater impact on China’s Amazon sellers . All products sold in Amazon inventory must pay VAT, which is directly deducted by the Amazon platform. If Chinese sellers ignore British tax regulations or respond improperly, they will face operational and legal risks. Failure to provide accurate customs declaration information and timely payment of taxes in accordance with tax regulations may result in goods being intercepted by customs, affecting order fulfillment and damaging store performance. Therefore, Chinese cross-border sellers need to carefully study British VAT rules and operate their stores under the premise of legal compliance.

Market size and development trends

Compared with Italy, the British e-commerce market is more mature. The total population of the UK is 63 million, of which more than 43.5 million people participate in online shopping, accounting for nearly 79%. The UK’s Internet penetration rate is as high as 92.6%, much higher than Italy’s 65%. In 2017, UK online sales reached US$90.22 billion, a year-on-year increase of 11.5%. British consumers mainly buy fashion, books and audio equipment. The overall logistics service system in the UK is relatively complete, and consumers have high expectations for the online services provided by sellers.

Platform Preference

85% of Italian online shoppers tend to shop on well-known platforms such as Amazon Italy, eBay, ePRICE or Zalando, believing that these platforms can provide a more organized and complete shopping experience. In the UK, although 69% of online shoppers also choose to shop through platforms, due to the higher maturity of the market, consumers can get more choices from brands that have been committed to improving the online shopping experience for many years.

Logistics considerations

The logistics and distribution situation in Italy is more complicated, especially when using local postal express services. High express delivery costs have become one of the main obstacles for Italian consumers to shop. However, Italian shoppers are more tolerant of longer delivery times, as long as the delivery method is reliable and traceable. On the contrary, British consumers have extremely high requirements for logistics efficiency, and express delivery costs have become one of the important factors affecting their shopping decisions.

To sum up, although the British e-commerce market is more mature, it still has huge development potential. For sellers who want to enter these two markets, it is crucial to understand local cultural customs, laws and regulations, and logistics systems.