Free shipping should boost UK’s cross-border sales

Just 56 percent of small and medium-sized online businesses in the United Kingdom sell to customers abroad. That’s significantly less than in other major online retail markets. But at the same time there is a high customer demand for British goods. Free shipping could be the answer, PayPal suggests.

New research by PayPal among 1,200 small and medium-sized businesses in major ecommerce markets, including the UK, France, Germany, Italy and Spain, has shown that only half of these companies in the UK sell to foreign customers. But an earlier study by PayPal suggested there is higher consumer demand for British goods over goods from any other major European ecommerce market. An estimated 86.4 million online shoppers from 29 countries brought from the United Kingdom during the last twelve months.

With just 56 percent selling online to customers abroad, the UK underperforms compared to other countries, such as France and Spain. There, the share of cross-border selling SMB’s are 64 and 61 percent respectively.

Free shipping
PayPal thinks offering free shipping could unlock international online sales. But one in four businesses said shipping and the associated costs form the top barrier to selling cross-border. Also, customs and duties were for many retailers a great concern. But on the other hand, for shoppers who buy from overseas free delivery is the single most attractive driver.

“The UK is more popular than ever as a destination for online shoppers worldwide and 2015 proved to be a real tipping point”, said Simon Moran of PayPal UK. “Simple changes to your online store such as accepting multiple currencies, offering different languages, and keeping shipping costs low can have an immediate impact on sales.”

UK companies sell mostly in Europe
Based on information from the survey, sales to European countries account for 61 percent of international online sales among UK small business. With 20 percent of UK online sales, North America is the UK’s second largest market, while Asia comes third with 6 percent of international sales.