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The Recession Takes a Toll on UK E-Commerce

A spot of bother.

Growth in UK business-to-consumer (B2C) e-commerce sales (including travel) slowed in 2008, as the recession became a reality for many consumers. And the financial squeeze is expected to continue to influence online buying activity through 2010.

The news isn’t all bad.

eMarketer estimates that 72.5% of UK Internet users ages 14 and older will buy at least one item online in 2009.

Furthermore, between 2009 and 2013, the number of online buyers will rise from 26.9 million to 31.8 million—over one-half of the UK population.

“For the first time ever, e-commerce activity in the UK is not supported by a buoyant economic climate,” says Karin von Abrams, eMarketer senior analyst and author of the new report, UK E-Commerce: Fighting the Downturn. “Consumers at all income levels say they are reining in spending, putting off some major purchases and seeking cheaper alternatives to products and suppliers used previously.”

That’s the danger for online retailers.

When the Internet Advertising Bureau UK (IAB UK) and Lightspeed Research asked UK Internet users how the recession had affected the frequency of their visits to Websites, 41% of respondents said the time they spent shopping online had increased—but 45% said they were spending more time looking for deals.

When it came to the types of sites visited, price comparison sites were the clear winners, with 33.7% of respondents saying they visited them more often due to the recession. Visits to auction sites and value supermarkets were also up more than 22%.

The biggest drops were for luxury goods sites. While 3.7% of Web users polled said they were visiting these more often, 22.7% said they accessed luxury sites less frequently.

“The financial squeeze will continue to influence online buying activity through 2010,” says Ms. von Abrams. “While consumers will do more shopping and buying on the Web in 2009 that does not necessarily imply higher spending.”

She concludes, “Lower prices online will bring down the cost of many purchases.”

For a more complete view of the coming trends, take a look at the new eMarketer report, UK E-Commerce: Fighting the Downturn.

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