UK's Internet Economy is worth more than £100bn and leads the world in online shopping

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2010ComrzBlogUKInternetM

A recent report ’The Connected Kingdom’ commissioned by Google and carried out by US consultancy - Boston Consulting Group, finds that the Internet contributed some £100bn or 7.2% of UK gross domestic product in 2009.

This £100bn figure is said to be a conservative estimate, and excludes business-to-business eCommerce which is a £360bn per year market alone.

Of the £100bn figure, half of this is estimated to be consumer eCommerce, £10bn is for internet service providers and equipment used to get online, and the remaining £40bn comprises mainly of government spending and private investment in Internet technology - such as fibre optic networks and broadband. The UK Internet industry is estimated to employ circa 250,000 people - mostly made up of small companies like Comrz funnily enough.

The UK is actually a net exporter of eCommerce goods and services, exporting £2.80 for every £1 it imports, or in 2009 figures - £9.5bn exports vs £3.4bn imports. In terms of domestic consumer eCommerce; circa 31m people are responsible for the £50bn figure - spending circa £1,600 each - largely on media, travel, insurance and fashion - this sum puts UK consumers ahead of their American counterparts - on the basis of per capita spending. The UK is also the second largest online advertising market in the world after the US. The finaly interesting statistic revealed by the survey is that households can save approximately £1,000 per annum - by buying most of their goods online.

I know from my own patterns of consumption exactly how invaluable the UK Online Retail Market is. I along with many others regularly use larger stores like Amazon, Tesco, iTunes, M&S, John Lewis, HMV and ASOS, as well as more specialist stores like music store Juno and various ticket-based operations like airline tickets and cinemas - like Odeon. I must say that Amazon is still overall my favourite retail destination.

I shop online because there’s a greater range of goods and better availability, as well as keener pricing. I still quite like High Street and Mall shopping - but my biggest issue there is one of availability - in that the local store often runs out of stock - particularly with regards to specific clothing sizes. For online retail, the weakest part is still the final delivery / fulfillment part of the transaction - not enough retailers handle returns sufficiently well - they should all use re-usable / re-sealable packaging with self-addressed labels and returns handled (picked up) by the same courier service that delivered.

There are still pros and cons with online shopping versus mall or high street, when more online retailers get the delivery and returns handlling correct, I see the UK eCommerce figures going much higher. The immediacy, convenience and range of online shopping easily overcomes the buzz of in-store browsing - particularly when it comes to the fallout of leaving a store empty-handed - the blow is much lesser online, as it is far easier to find a suitable substitute.

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