US, China and India earmarked for UK e-Commerce expansion
Slough, 23rd March 2015
UK eCommerce business leaders are turning their attention to high growth consumer markets in the US, China and India, according to a new report commissioned by business process outsourcing provider (BPO) Arvato and World Business Research (WBR).1
The research, which surveyed 78 UK eCommerce CEOs, managers and executives working in the beauty, fashion, FMCG and luxury sectors, reveals that 37 per cent of British firms are looking to grow their eCommerce offerings in the US, with 33 per cent and 30 per cent targeting the Chinese and Indian markets respectively.
In addition, 24 per cent are planning to expand their business into Europe, with a third of the companies researched already having an online presence on the continent.
UK firms in fashion and beauty eCommerce are set to be the most active in the US, China and India, with 42 per cent and 40 per cent respectively planning for expansion in these markets. However, more than one in three companies across both sectors have undefined timescales for growth, with 15 per cent looking to implement their strategies over the next one to two years.
In comparison, 24 per cent of businesses in luxury and fast moving consumer goods (FMCG) plan to develop an offering in the US, China and India, with seven per cent looking to expand over the next couple of years.
Tony Matthews, head of e-commerce at Arvato UK, commented; “International markets have a lot to offer British firms in eCommerce thanks to increasing activity on digital channels and a growing volume of digital savvy, middle class consumers with high purchasing power. However, establishing a new market presence can be a considerable challenge, and the high percentage of undefined timescales highlights nervousness among companies when it comes to expanding into new regions. In light of this, UK firms are increasingly looking for help, and are turning to external partners for assistance in handling parts of their eCommerce business.”
The research found outsourcing to be a popular strategy for firms handling eCommerce with 47 per cent using an external provider to deliver one or more functions - online marketing, logistics and fulfilment as well as website operation and development are the most popular functions for businesses to source outside the firm.
A high proportion of those in fashion – 57 per cent – are using an outsourcer, with 37 per cent contracting out their website development, which is more than double that of the other three industries researched. However, while only 24 per cent of those in the luxury sector have an outsourcing partner, over a third engage an external supplier to deliver their online marketing.
Over half of firms considering external providers plan to use them in their operations on the continent, with the main focus on customer care and forward and reverse logistics. This is in contrast to 14 per cent in the US and 29 per cent across APAC.
Tony added; “International growth into new regions requires in depth regional knowledge, technical capability and supply chain expertise, and external providers can help companies deliver successful market entry. Outsourcing can lower the barriers businesses face when expanding into new markets, providing the necessary economies of scale and local know-how to deliver successful expansion.”
To read the full report, please visit: http://www.arvato-consumer-products.com/en/download/
About Arvato UK
Arvato is a trusted global business outsourcing partner to the private and public sectors in the UK. With more than 50 years of experience in outsourcing, Arvato combines expertise in business process outsourcing (BPO), financial solutions, customer relationship management, supply chain management, and public sector and citizen services to deliver innovative, individual solutions. Arvato has long-term partnerships with some of the most respected companies in the UK and globally, as well as innovative public sector clients. It is a subsidiary of Arvato, a leading global BPO provider with over 66,000 people employed across almost 40 countries worldwide. Arvato has annual revenues of €4.4bn contributing over a quarter of the Bertelsmann group annual revenues of over €16.4bn. For more information, visit: www.arvato.co.uk
About Arvato SCM
Arvato SCM Solutions is an innovative and leading international service provider in supply chain management and e-commerce. In the fields of telecommunication, high-tech | entertainment, automotive | bank | insurance, healthcare, consumer products and publishing, Arvato SCM Solutions is offering specialised services. Approximately 14,000 employees worldwide work to provide services and practical solutions. Using the latest digital technologies, Arvato develops, operates and streamlines complex global supply chains and commerce platforms, making it a strategic growth partner for its customers. Arvato SCM links people’s know-how with the right technologies and suitable business processes to measurably increase the productivity and performance of its partners.
As leading European service provider in the e-commerce fashion sector, Arvato has been taking care of all required processes for renowned fashion and beauty brands for more than 15 years. Arvato’s brand-specific service portfolio covers both retail logistics and the entire commerce process chain: implementation and operation of online shops, product photography, online marketing, logistics and shipping including returns management as well as payments and accounting, customer service and commerce consulting.
With 60 distribution hubs in Europe, Russia, Asia and the US, SCM Solutions provides the necessary scalability, flexibility and experience to give their customers the decisive competitive edge.
Arvato is a wholly-owned subsidiary of Bertelsmann SE & Co. KGaA.