Online marketplaces that enable independent sellers and businesses to reach a wider array of consumers have dramatically increased in popularity over the past decade, and now represent a significant portion of the UK e-commerce market.
New research released from Shieldpay, has found that almost 900,000 (882,900) UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales every year – worth 6% of all UK business turnover.
The Shieldpay and Cebr research found that companies selling on marketplaces reported stronger business performance, with annual revenue growth in 2021 amounting to 9.4% for businesses selling on marketplaces, compared to 7.4% for those who have not used them.
However, despite the significant turnover from online marketplace sales, these figures still represent only just over a fifth (6%) of the UK’s annual business turnover. As such, there is still significant scope for growth in this area, as more and more businesses begin to capitalise on the value of a ready-made, secure environment for e-commerce.
When asked about the drawbacks of using marketplaces, more than a quarter (27%) of businesses noted that they saw none whatsoever, and that nothing would prevent them from using marketplaces, again suggesting few barriers to growth.
Surprisingly, SMEs are currently less likely to use marketplaces than larger businesses. According to the ONS, just 3% of micro-businesses cited selling through marketplaces in 2019. This is despite the benefits that additional services that marketplaces can offer small businesses, including logistics support and data analytics from large marketplaces such as Amazon or eBay.
Claire Van der Zant, Revenue Director, Shieldpay commented:
“The £280bn turnover that online marketplaces contribute to the UK economy is a sizeable figure, but it’s clear that this 6% share is only set to increase further in the coming years. A marketplace is more than just a business in and of itself, it is a distribution channel to empower other businesses to reach new markets and a transformational tool to unlock new value for the end consumer through greater choice and more competitive pricing.
“Our research not only shows that marketplaces make a notable contribution to the UK economy, but that businesses are not yet fully capitalising on the significant benefits they can bring. The value of marketplace commerce can often be overlooked, especially by SMEs, but the robust infrastructure, convenience and security that they provide should encourage more businesses to move online and make the most of these advantages.”
Shieldpay is the secure digital payments market leader, and the Centre for Economics and Business Research (Cebr). The full report can be viewed here.