The British e-commerce and online payment market

In the UK, e-commerce is growing and consumers are willing to shop around for a bargain

Countries United Kingdom

Intro United Kingdom

The UK is a rich country with a well-connected population that is used to shopping online and is even more open to e-commerce since the pandemic. According to the IMF, the British economy will grow by 3.7% in 2022 and then 1.2% in 2023 [1].

Unsurprisingly, with inflation above 6%, UK consumer spending looks set to fall in 2022, as a result of the cost-of-living crisis [2]. By the second quarter of 2022, British consumer confidence had fallen in comparison to the previous two quarters, with consumers worried by the impact of energy prices and the unstable international situation [3].

Unemployment remains low, just 3.8% [4]. Economists tend to define a jobless rate of 3-4% as “full employment”. The low underlying rate of unemployment should give workers cause for renewed confidence, if only other external factors will improve.

In a recent report, the Centre for Retail research predicted that, even factoring in an inflation rate of up to 7%, retail spending will grow in 2022 by around 1% [6]. Even in March 2022, when overall sales fell in response to the unstable international situation, non-food sales continued to rise by 1.3% [7]. For merchants with the right approach, particularly those able to tell a story about value and affordable quality, the UK e-commerce offers a large, well-connected and enticing market.

The UK’s e-commerce market

The United Kingdom e-commerce market is worth US$283 billion and is growing at a rate of 7% a year [8]. The average British e-commerce user spends US$4,191 a year with online merchants [8]. Consumers complete 60% of all online purchases on a mobile device [8]. 45% of consumers shop cross-border, with their purchases accounting for 16% of the total value of British e-commerce [8].

UK e-commerce boomed during the pandemic and the subsequent lockdown. According to one survey, by the second quarter of 2020 e-commerce accounted for 31% of all retail purchases (up from somewhere between 19% and 20% before the pandemic [9]. In one month alone, April 2020, the volume of UK e-commerce in the food sector grew by 55% [10]. Nor was this a blip. Seven of the next ten months also saw the category continue to grow [10].

In 2022, the largest player in the UK e-commerce market is Amazon. But its market share is just over 5%, giving it nothing like the overwhelming dominance it enjoys in its home market [9]. By 2022, there were almost 600,000 e-commerce merchants in the UK [10].

Payment methods in the United Kingdom

Turning to payment methods in the United Kingdom, the country is clearly a card market. British consumers pay for 52% of all online transactions by credit or debit card. 32% are paid for with an e-wallet, 6% by bank transfer and 2% in cash. 8% are paid for with other, niche, payment methods [8]. Looking at the card market, Visa has an 82% market share, Mastercard 17%, and American Express 1%. There are no notable local payment-card products [8].

Research released at the end of 2021 showed that 86% of UK consumers had adopted some kind of fintech product [11]. And 79% saying they used alternative payment methods to pay and transfer money at least some of the time [11]. This makes it highly likely that the UK alternative payments sector will grow in the coming years. This is particularly true given the explosion in things such as “buy now pay later” (BNPL) apps, which are growing at a rate of 25% a year in Britain [12].

Enabling and limiting factors in UK e-commerce

Internet penetration in the UK is 96% [8]. A 2020 study found that the UK had a mean broadband speed of 37Mbps [14]. This puts it behind forty-seven countries worldwide and in Europe behind both Germany and France [14].

Britain is ranked 9th on the World Bank’s Global Logistical Performance Index [15]. According to UK regulator the Office of Communications (commonly known as Ofcom), parcel volumes in the UK grew by 30% in 2020-21 [15]. There are other signs that the logistics industry in the UK is gearing up to support the e-commerce boom. In 2021 for instance, warehousing space grew by 32% [16].

Financial inclusion is not a barrier to the conduction of business in the UK. 96% of adults have a bank account and 65% have a credit card [8].


  4. ONS UK Employment and labour market report April 2022
  8. Original PPRO research

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Quick facts

Britain has the largest e-commerce market in Europe, worth an astonishing 292.1 bn $US.  The most popular method of shopping is via the smartphone, and m-commerce is growing at a rate of 13.6 % per year.

Four out of ten Brits use a BNPL method with 9.5 million consumers saying that they won’t shop from an e-commerce store that doesn’t offer BNPL as a payment method.

Inflation in the UK could reach a 50 year high at the beginning of 2023 with levels forecast to reach 18.6% because of the rising price of gas.

The most popular British e-commerce website in July 2022 was with 403.3m that month.

General Information

  • Population 68.2 m
  • Population 15 + 56.1 m
  • Online Population 64.7 m
  • Area 242,495 km2
  • Currency GBP
  • GDP 3,108.4 bn USD
  • GDP per Capita 45,573 USD

Payment types

  • Card-based payments
  • Cash-based payments
  • Bank transfer
  • Wallets
  • Other
[{"label":"Card-based payments","value":"51"},{"label":"Cash-based payments","value":"1"},{"label":"Bank transfer","value":"7"},{"label":"Wallets","value":"32"},{"label":"Other","value":"9"}]

Banked population
  • United Kingdom 97%
  • Western & Central Europe 94%
  • World 67%
Credit card penetration
  • United Kingdom 64%
  • Western & Central Europe 46%
  • World 19%
Internet penetration
  • United Kingdom 95%
  • Western & Central Europe 91%
  • World 62%
Smartphone penetration
  • United Kingdom 92%
  • Western & Central Europe 75%
  • World 70%

The E-Commerce Market

Top e-commerce segments

  1. Fashion: 31%
  2. Toys, Hobby & DIY: 19%
  3. Electronics & Media: 18%
  4. Food & Personal Care: 17%
  5. Furniture & Appliances: 15%

Cross-border e-commerce

  1. Cross-border proportion of total e-commerce – 11%
  2. Value of cross-border e-commerce – 30.5 bn USD
  3. Online shoppers who have shopped cross-border – 42%

Top 3 cross-border shopping origin markets

  1. China: 32%
  2. USA: 21%
  3. Germany: 9%
B2C E-commerce Growth 2020->2021
  • United Kingdom 13.2%
E-commerce % of total retail
  • United Kingdom 32%
  • Western & Central Europe 17.6%
  • World 20%
E-commerce completed on a mobile device
  • United Kingdom 55%
  • Western & Central Europe 43%
  • World 53%

E-Commerce Trends

  • E-commerce market size 292.1bn USD
  • E-Commerce spending per capita 4,341USD
  • E-commerce spending as % of GDP 9.3%

The Credit Card Split

  • Visa
  • Mastercard
  • American Express
[{"label":"Visa","value":"78"},{"label":"Mastercard","value":"21"},{"label":"American Express","value":"1"}]

The information on our Insights pages has been compiled by us in cooperation with Datamatics and Wright & Brown. The data shown is partially owned by us and partially owned by GlobalData. © 2021 by PPRO Financial Ltd. No data and information can be used for any further publication without the explicit approval of PPRO.


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