How Brexit Will Affect E-Commerce in the UK
Find out how the impending Brexit will affect the UK e-commerce industry
Whether you’re for it or against it, we all know that Brexit will affect us in some way or another. More importantly, as an online business owner, you need to know how Brexit Will Affect E-Commerce and whether your business is going to make a profit or a loss…
You can barely switch on the news these days without the word ‘Brexit’ being mentioned and the possible ramifications that it causes. We’re even fed-up of it being a conversation point wherever
you go, but there’s no deviating from the fact that it can and will affect people with businesses that trade internationally. Especially online…so find out how Brexit will affect e-commerce in the UK.
With most of Brexit, any opinions are educated guesses at most, so we shall approach this with a hint of cynicism and neutrality. It’s fairly clear that not many people know exactly what post-Brexit will offer to the nation and our business community, but here are our predictions:
We can all be certain that the devaluation of the pound will occur. It could be a marginal change, but evidence from when the referendum results came in, the pound fell to a 30-year low against the Euro and the Dollar. As much as this may seem like a disadvantage for businesses, it could be a huge advantage.
Although consumers will be at a loss, business can make a profit on the devaluation of the pound. When the pound devalues, the dollar and the Euro will increase significantly, meaning more potential international sales with international customers paying less for products thanks to the low value of the pound.
Although we’re in the European partnership for another two years, once we leave, UK businesses will see a large hike in the amount that is charged for shipping. This may see a decrease of trade from consumers in the European Union, who were used to minimal shipping prices in the first instance.
Similarly, if e-commerce sites ship products from Europe to customize/manufacture and then sell on, this could cause problems with the import prices of materials and products. This could reduce the number of sales we see on e-commerce websites.
The Digital Single Market is championed by all member states in the European Union, it controls standards of products that are sold online throughout Europe, including their intellectual property, consumer rights and all the governing bodies that ensure quality control occurs. It essentially covers all online trading and sets out standards for trading on the Internet.
The entirety of the Digital Single Market is estimated to be worth between £375 and £500 billion to the EU economy. Whilst the UK is the front runner for e-commerce in the EU, with 14.5% of total sales in the UK taking place online and contributing to 6% of the GDP, leaving the EU could significantly impact businesses and their accessibility to the Digital Single Market. However, many business people predict that the lack of the EU standards will not impact in online sales, as other trade deals exist and the UK already sells goods to Asia, America and Australia, just to name a few.
You may think this seems incredibly far-fetched at the current time, but we’re not as far away as you may think. If you consider the requirements for becoming a world leader in e-commerce, you realise that the UK has all of them. With more than 1.5billion people speaking English as their first or second language, we have a huge customer base.
Similarly, we do have history and experience with selling across multiple channels and languages, which we do well. Selling both B2B and B2C is something the UK online marketplace is good at. The country and online community is also relatively small so it’s a connected industry that can club together and create a world leader in e-commerce.
Despite the implications that are going to possibly come from Brexit, there is still a chance that we can remain in an optimistic state. Instead of thinking of the negatives, it’s about reducing the risk of these negative probabilities taking a hold of any existing e-commerce businesses and maximising the positives that can be taken from the whole affair.