A global iStreet: Online marketplace sellers predicted to generate 21.3bn by 2020
Britain’s small online marketplace sellers, using platforms like Amazon and eBay to trade internationally, brought 11bn to the economyin 2016, according to new research that suggests that figure could double by 2020.
The study, conducted by global payments firm WorldFirst and the Centre for Economics & Business Research (Cebr), unpicked the rise of the so-called iStreet? to quantify the value of online marketplaces to the economy, as more entrepreneurs than ever tap into global sales opportunities.
According to its findings, 714, 000 small UK business owners 13 per cent of all smaller firms now sell via online marketplaces, with total sales reaching 11bn in 2016. At the same rate, WorldFirst forecasted the figure to reach 21.3bn by 2020.
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Commenting on the growing economicpower of small marketplace sellers, Jeremy Cook, chief economist at WorldFirst, said sites like Amazon, eBay and Etsy had enabled entrepreneurs to build high-growth, multinational businesses, in turn reshaping British exporting.
whilst these businesses are not on your local high street, they are making waves on the global iStreet that has in part replaced it. Marketplaces like Amazon and Etsy make it as easy for UK businesses to sell to customers in Berlin as Birmingham or MiamI as Manchester, he explained.
Over 2, 000 small business owners, employing under 50 staff, were surveyed for the study, with most finding the value of online marketplaces increasing steadily. Around one in three experienced revenue growth increase by 20 per cent in the last year, while one in ten said total exports revenue increased by over 500, 000.
Cook continued: Marketplaces can be a relatively low-risk gateway to the world and these businesses are benefitting from this access to target new customers in new markets and they’re reshaping UK exporting in the process. Financial services providers have an opportunity to facilitate this trade and help this new wave of mini-multinationals to grow.
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In terms of the challenges faced by marketplace sellers, logistical and shipping difficulties were the two most frequent barriers to selling online, cited by a fifth of small exporters. The risk associated with trading across multiple currencies was another problematic factor.
these ambitious businesses need access to services that reflect their new, international business models, in particular making it easier for them to manage multiple currencies and handle cross-border transactionsm, Cook said.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.