Skip to content. | Skip to navigation

Personal tools
Sections
You are here: Home Focus The Impact of Brexit on Online retail

The Impact of Brexit on Online retail

The online retail business in UK always maintained a great dependence on the European market. Whether it is about selling a product to a buyer in Germany or importing merchandise all the way from Spain, the market in the pre-Brexit era was expanded for the British retailers all over the European Union.

No wonder that EU accounted for more than half of the market for the retailers of the U.K. Suddenly with the onset of the Brexit era that situation changed and today, online retailers all over the UK are experiencing the steady slowdown in terms of sales and revenue.

While referring to the differences between pre-brexit and post-brexit era of online retail many are outwardly and pessimistic, there are also several retailers who think that the economic constraints and immediate disaster that followed Brexit for the online retail space are not going to pull down the market for long. Obviously, both sides have their own logic and explanations. Considering all these aspects we are going to explain the the impact of Brexit on online retail.

What major retailer brands perceive?

Before analysing the effects on economic and other grounds it is always important to get a direct view of the perceptions of the UK's online retailers who have can express concerns and the toll Brexit took from their direct and immediate experience. While majority of them are still grappling to understand what effect Brexit as a major decision can render on their business outcomes in the long run, many are already pessimistic about the toll it took immediately by pulling the figures down.

Ticwatches which as a major online retail brand with a great market presence for selling fashion watches all over Europe can be taken as an ideal example of what Brexit could do to the retailers of U.K. Daniel Richmond from Ticwatches said "The impact to an online watches seller like ourselves could be significant, under current EU regulation sales of watches to EU states could not be easier but with a hard Brexit this could impact our business model significantly."

There are many retailers who are openly expressing their anguish over the price of currency fluctuations that they need to bear when importing products from other EU countries. For many this difference of value caused by currency exchange is a major factor to eat away the pricing advantage and top line growth.

There is no wonder that a vast majority of retailers experienced at least 30% to 50% less sales immediately after the Brexit decision took place. This is particularly true for retailers who had a great market share in EU countries. As for competition, in the post Brexit era U.K. brands are clearly lagging behind EU brands when it is about offering optimum value for money.

To what extent Brexit can impact the eCommerce?

Many people were not aware of the fact that UK has been the unrivalled ecommerce Goliath in the whole of Europe. UK's annual revenue from the online retail and ecommerce sector was more than 150 billion euros and this leading position for the UK's online retail sector continued for years. This is mainly because of the fact that unlike retailers in many other countries British retailers were always willing to embrace online presence. UK's retail sector was also the early starter on the online space much before the retailers in other markets. Naturally, in the post Brexit era their position became most compromised in terms of growth, revenue and leadership.

The only ray of hope and mending exercise that can possibly save the thriving ecommerce market of U.K. is by bridging these gaps by holding close ties with other small nations and budding economies in Europe and other sorts of the world where UK's retail brands has experienced popularity and brand following. In the new scenario U.K. retailers have to focus on new emerging markets where they have better chances to edge out competition.

The impact of Brexit on online retailers outside U.K.

If you are a retailer outside of U.K. and do not export and import goods from U.K. the Brexit may not have direct effect on your business. For retailers outside who enjoyed great market for his products in U.K. this can affect your sales. The same effects can be experienced by retailers with high volume of imports from U.K. as well. On the other hand, some retailers who didn't have any direct relation with U.K. brands can enjoy more market exposure thanks to the absence of their competitor brands from U.K. The immediate pain from the Brexit will be experienced by the small and medium retailers selling U.K. brands.

While all such effects will follow the Brexit decision, it should be maintained that there is nothing to panic about this. The strength of UK's thriving retail sector is too big to cowed down with Brexit and it is just a matter of few months before the retailers again find their foothold in the market.

Document Actions
EU Alerts

EUbusiness Week no. 851
Time to speed up climate action
→ EUbusiness Week archive

The Week Ahead no. 453
Situation in the Gulf and Iran - implementing Basel III - support for former Carrefour Belgium workers - 2020 EU Budget

Subscription options