ecommerceDB Country Reports eCommerce in the United Kingdom 2020 With data on the top 500 stores December 2020 ecommerceDB Country Report Report overview The ecommerceDB Country Report ”eCommerce in the UK 2020” provides a comprehensive overview of the state of the UK eCommerce market regarding consumers, markets, and its top 500 online stores in 2019. In addition, it also reflects the strong surge in growth eCommerce has experienced this year due to the COVID-19 pandemic. The analysis in this report is based on exclusive data from ecommerceDB.com, the Statista Digital Market Outlook, and the Statista Global Consumer Survey. It depicts significant data about Stefanie Eden Anna-Lena Hoyer the impact of the COVID-19 pandemic on the eCommerce Director ecommerceDB Team Lead ecommerceDB Reports landscape, offering data on changes in consumer behavior and adjustments to revenue forecasts online shoppers in the UK, providing detailed insights about their shopping interests, attitudes, and shopping patterns the UK eCommerce market, including revenue developments and forecasts, insights into market David Niemeier Lukas Peters concentration, and extensive KPI analyses Junior Analyst Junior Analyst the competitive landscape in the UK eCommerce market We hope our report proves to be useful and informative for you. with key facts about the top players, category analyses, and a full list of the UK top 500 stores 2 Content 01 Introduction 04 The UK eCommerce market ▪ Facts about UK eCommerce ▪ Market size ▪ Country snapshot: the UK ▪ Market structure ▪ KPI analysis 02 COVID-19 impact on eCommerce 05 UK stores: top 500 analysis ▪ Shopping behavior shifts ▪ UK top stores ▪ Market impact ▪ Category insights ▪ Case studies ▪ Top 500 ranking 03 Consumers in the UK 06 Appendix ▪ Online shopper characteristics ▪ Online behavior ▪ Online shopping 3 Introduction This chapter summarizes the key findings of this report and provides general information about the country. ▪ Facts about UK eCommerce ▪ Country snapshot: the UK 4 Facts about UK eCommerce: key findings 57 million 84% 61% Consumers eCommerce users in eCommerce research on the internet 2020 penetration before a purchase US$82bn 7% Fashion Market Net sales in UK CAGR Biggest category based eCommerce in 2019 UK net sales on UK net sales 2019-2024 27% Stores Top 5 UK online stores by net Market share of the top sales 5 stores in total UK eCommerce 5 Sources: Statista Digital Market Outlook 2020, Statista Global Consumer Survey 2020, ecommerceDB.com as of November 2020 Country snapshot: The United Kingdom Key facts 2020: The United Kingdom Capital London Population 67.5m Population, aged 15–64 years 43.1m Households 29.0m Urban population share 83% Total current GDP1 US$2,830.8bn Current GDP1 per capita US$42,277 Consumer spending1 per capita US$26,160 Internet penetration 91% Smartphone penetration 86.8% Broadband subscriptions2 40.2 Average connection speed 21.3 Mbits/s Social media penetration 70.9% 1: Current prices 2: Per 100 people 6 Sources: Statista, 2020, based on the IMF, World Bank, UN, Eurostat, national statistical offices, and the ITU COVID-19 impact on eCommerce This chapter shows the influence of COVID-19 on global online traffic and the change in shopping behavior. It outlines the developments of sales and growth rates in eCommerce in times of the pandemic and illustrates them with interesting examples based on selected companies. ▪ Shopping behavior shifts ▪ Market impact ▪ Case studies 7 Consumer online interests shifted during COVID-19 and pushed web traffic to supermarkets Shopping behavior shifts: traffic shifts COVID-19 impact on global online traffic: November 20201 March 20202 Supermarkets 35% +161% Sports equipment 24% -15% Retail tech 7% +15% Cosmetics 4% -20% Telecom 2% +32 Banks/insurance 2% -3% Home furnishings/DIY -3% -21% Luxury items -3% -32% Jewelry & watches -8% -34% Fashion -10% -27% Media -13% +80% Tourism -44% -57% 1: Worldwide; week ending November 13, 2020 compared to reference (Jan 6 to Feb 16); 1,400 sites; 4.8b sessions, and 7 billion visits across the world 2: Worldwide; week ending March 16, 2020 compared to reference (Jan 6 to Feb 16); 1,400 sites; 4.8b sessions, and 7 billion visits across the world 8 Sources: ContentSquare as of November 9, 2020, Statista Shopping behavior has shifted from offline to online purchases with similar patterns in different countries Shopping behavior shifts: online purchase shifts Online instead of offline purchases related to the COVID-19 pandemic United States United Kingdom Germany China1 I have shifted to online purchases 64% 56% 52% 92% Restaurant delivery/takeout 27% 14% 13% 36% Food and drink delivery 26% 25% 9% 49% Hygiene products 25% 17% 12% 64% Household cleaning products2 22% 14% 8% 55% Health products (e.g., medicine) 18% 11% 13% 28% Clothing 15% 12% 20% 32% Books 11% 11% 13% 23% Games 11% 9% 10% 20% Hobby supplies 11% 9% 10% 12% Videos 9% 5% 7% 24% Music 7% 6% 7% 17% Cons. electr., househ. appl., furniture 7% 6% 8% 22% Financial products and services 4% 3% 3% 20% Magazines & newspapers 3% 5% 5% 9% 1: Survey period March 23, 2020 - May 3, 2020; 2: e.g., hand sanitizer, toilet paper "Have you deliberately purchased any of these products or services online instead of offline because of the COVID-19 / Corona pandemic?"; multi-pick; Base: n=19,259, all respondents 9 Sources: Statista Survey "COVID-19 Barometer 2020"; Survey period March 23, 2020 - May 10, 2020 Consumers compensated for in-store purchases with online shopping activity to a different degree Shopping behavior shifts: offline to online purchases Use of eCommerce to purchase products that were formerly purchased in physical stores: March 15 2020 I rarely or never do this activity Less frequently No change More frequently 9% 7% 6% 13% 14% 23% 20% 27% 28% 35% 32% 21% 25% 25% 12% 35% 19% 5% 12% 6% 6% 14% 7% 14% 19% 10% 15% 44% 40% 57% 42% 49% 51% 38% 45% 38% 57% 55% 50% 31% 27% 23% 18% 18% 18% 16% 16% 12% Vietnam India China Italy Russia U.S. Australia Japan UK Canada France Germany “What about each of the following, would you say are doing each of the following more frequently or less frequently compared to one month ago?”, item “using e-commerce to purchase products you would normally buy in-store” Base: n= 10,000 respondents from 16 to 74 years from March 12 to 14, 2020 10 Sources: Ipsos Global eCommerce revenues will see an additional growth of 10% in 2020 due to COVID-19 Market impact: global eCommerce revenues Global1 eCommerce revenue forecast in billion US$ Pre-Covid-19 Post-Covid-19 2,724 +10% 243 2,438 +10% 216 +12% +15% 1,939 2,481 2,222 2019 2020 2021 1: Global refers to the 150 countries covered in the Statista Market Outlooks (representative of 98% of worldwide GDP) 11 Sources: Statista Digital Market Outlook as of November 2020 Food & Personal Care is expected to profit the most from COVID-19 in the United Kingdom Market impact: UK eCommerce revenues by category UK eCommerce revenue forecast 2020 in US$bn Additional growth in 2020 due to COVID-19 in % Fashion Electronics & Media Toys, Hobby & DIY Furniture & Appliances Food & Personal Care +9.2% 97.0 8.1 88.9 32.5 30.1 7.0 16.4 15.3 8.4 17.7 16.3 7.6 14.6 13.5 15.9 13.6 16.5 Pre-COVID-19 Post-COVID-19 Note: COVID-19 impact on eCommerce revenue is constantly followed and will be updated regularly; thus, forecast subject to change as conditions are changing rapidly 12 Sources: Statista Digital Market Outlook as of 2020 COVID-19 led to the strong expansion of personnel and delivery capacities of many eCommerce players Case studies: Amazon, Walmart, and Tesco Retailers hiring new employees during COVID-19 crisis Tescos‘s weekly slots for grocery home shopping 1,300,000 175,000 > 100% 600,000 150,000 Pre COVID-19 Post COVID-19 ▪ Since March, Amazon has hired 175,000 additional people in its ▪ Tesco, the UK’s largest online grocery store, doubled its weekly slots fulfillment and delivery network in response to increased customer for grocery home shopping during the COVID-19 crisis demand and to assist existing employees ▪ Sales in its online channel increased by +48.5% (13 weeks ending May ▪ In April, the retail giant Walmart announced that it succeeded in hiring 30, 2020) in the UK. In May alone, Tesco's online sales surged by more 150,000 additional workers more than six weeks ahead of schedule. than 90% On April 17, 2020, Walmart announced it would hire another 50,000 workers to provide additional staffing in key areas ▪ Orders per van increased by 21% in H1 2020 to improve productivity 13 Sources: Company information Zooplus and Westwing grew significantly due to COVID-19 and adjusted their financial reports Case studies: Zooplus and Westwing Zooplus sales growth forecast 20201 in million € Group revenue of Westwing in million € 2019 2020 ~285 91% ~240 66% ~225 111 19% 99 At least 180 7% 25% 58 59 Forecast as of Adjusted forecast Adjusted forecast Adjusted forecast Q2 Q3 March 2020 May 7, 2020 July 14, 2020 October 15, 2020 ▪ Zooplus adjusted its 2020 financial report for the third time in a row as ▪ Westwing experienced strong sales growth of 91% in Q2 figures and a result of COVID-19-driven sales 68% in Q3 figures as a result of the COVID-19 pandemic ▪ In total, Zooplus currently expects a surplus €285m in sales compared ▪ In its Q2 and Q3 results, Westwing reported elevated growth across all to FY 2019, resulting in total sales of around € 1.8bn in 2020 customer cohorts and across all countries ▪ Zooplus revised its 2020 sales growth forecast in March by €45m in ▪ Westwing updated