UK becomes Europe's biggest online shopping market
By Susie Mesure
The challenges facing traditional high street shops from their web-based rivals is underscored today in a report that shows the UK overtook Germany to become Europe's biggest online shopping market last year.
A broadband price war, fuelled yesterday by BSkyB's launch of a free basic offer for its TV customers, was behind the surge in cyber sales in the UK in 2005, according to the research group Mintel.
Online shopping sales in the UK hit 9.79bn last year to Germany's 9.71bn, Mintel said.
France is a distant third with online shopping sales of 6.5bn in 2005.
British shoppers' willingness to shop online was illustrated by figures out from John Lewis Partnership that showed its online shop was now the group's second biggest "store" behind its Oxford Street flagship in terms of sales.
Online shops undercut bricks-and-mortar shops and often offer a wider range of goods, putting pressure on high street operators.
Next, the clothing group, which already had a strong mail order business, and Argos, the catalogue shop chain, have proved more adept than most in doing business online.
"The business to consumer e-commerce sector has come of age and is gaining consumer acceptance as a 'normal' retail sales channel," Neil Mason, a senior retail analyst at Mintel, said.
He predicted "physical shops" would fight back by improving shopping experiences and investing in more staff training.
Mintel said European online shopping sales surged 51 per cent in 2005 to 40.2bn compared with 2004, yet online shopping is still just 2 per cent of the total retail market.
It expects the market will grow by 186 per cent between 2005 and 2010, when online shopping sales are tipped to reach 115bn. |
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