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Brexit: Ecommerce Operators Face Issues Reaching Overseas Audiences
High Street retail was more or less decimated by the COVID-19 crisis. Millions of shops were forced to shut up shop indefinitely, resulting in many going permanently out of business.
With traditional retail no longer an option, much of the UK population made the shift to ecommerce. Even those who had previously never considered buying an item online began making countless everyday purchases from web retailers.
Consequently, research from ChannelAdvisor suggests that more than 90% of ecommerce businesses experienced a significant increase in visitor and customer numbers during the course of the pandemic. Among which, the vast majority (82%) said that they are still attracting more business today than they were at the beginning of last year.
Unfortunately, the same cannot be said for international customers. One of many economic casualties of Brexit, around 90% of all UK ecommerce businesses have seen a marked reduction in sales from across the channel.
A Major Fall in International Sales
The figures from ChannelAdvisor suggest that as many as 94% of ecommerce businesses have lost at least some customers in the EU as a result of Brexit. Among which, 66% said that they were experiencing ‘significantly’ fewer sales from customers abroad.
This suggests that while the domestic ecommerce sector is booming, businesses may have relied heavily on overseas audiences and are bearing the brunt of Brexit.
Among those who said that had experienced a fall in international sales, 73% cited shipping delays and complications as the main reason for the decline. Around one in three also said that heightened restrictions at the border and additional tax liabilities were making it difficult for them to continue selling products to international customers.
A Predominantly Reassuring Picture at Home
Commenting on the findings, Vladi Shlesman of ChannelAdvisor spoke with optimism that the growth in domestic ecommerce will offer vital support to the UK’s wider economy.
“UK brands are enjoying a phenomenal period of growth and will no doubt play an integral role in the country’s post-COVID recovery. However, the last few months of Brexit disruption have caused a significant headache for the vast majority of these firms, thanks to delays and complications at UK-EU customs. Brands rarely become e-commerce giants without strong international sales and finding a solution to this border disruption will benefit all sides,” he said.
“Leveraging expertise like a third-party logistics provider can overcome fulfilment challenges, or looking to new sources of demand could help plug the gap in demand. In the meantime, it’s inspiring to see that brands are enthused and confident about the coming year. After such a transformative time in the industry, I hope they continue to reap the rewards of e-commerce.”
In the meantime, ecommerce businesses that predominantly or exclusively targeted overseas audiences may need to set their sights on domestic customers, in order to compensate for any potential losses.