Why should you start a dropshipping business in the UK?

A country with one of the strongest economies in the world, the United Kingdom (UK), is boosted by an impressive pharmaceutical industry, North Sea oil and gas, world-class financial services, and the second-largest aerospace industry. Dropshipping in this part of Europe could pay off well with a nation of keen online shoppers.

Country information

Location

The United Kingdom is an island country in Western Europe. It comprises Scotland, England, Wales, and Northern Ireland. London is the capital and there are around 67 million citizens (2022, Britannica).

Wealth

As of March 2020, the average British household earned £302,500 net per year, says the Office for National Statistics. A global economic powerhouse, the UK was the fifth wealthiest country in the world - behind Germany and ahead of India - according to data from The World Bank, 2021. Its GDP was USD 3,186,860 in 2021.

Source of wealth

The UK House of Commons Library reports that the services industry dominates the British economy by about 80%. Namely retail, business administration, finance, and professional services. Manufacturing accounts for only 10% of the economy.

Dropshipping in the UK

Arguably the centre of ecommerce shopping in Europe, the UK is a big player thanks to frequent online shoppers and a population with high disposable income. These are the most significant reasons to start dropshipping in the UK:

The ecommerce market

The UK is a juggernaut for online spending and is home to the most advanced ecommerce market in Europe. Worldwide, the UK had the fourth largest ecommerce market in 2021 after the US, China, and Japan, as per ecommerceDB.

Ecommerce revenue

By 2025, the UK ecommerce market is forecast to increase by 26% to reach a value of £260 billion, according to The 2022 Global Payments Report by WorldPay. This is an impressive statistic that shows how popular and trusted online shopping is with British consumers.

Internet use

Internet adoption rates are one of the highest in the world in the UK. About 98% of the British (66.99 million) are connected to the internet in 2022, says DataReportal. Brits spend an average of 6 hours and 12 minutes per day online across all devices with 60.4% making purchases online every week.

The British Office of National Statistics (ONS) reports that in 2020, almost all adults aged 16-44 (99%) were internet users, compared to just more than half (54%) of those aged 75 and over. These figures indicate there is great potential for targeting UK online consumers.

Product categories with high sales

Four in five Brits (80% of the population) shop online, according to a Statista online shopping behaviour report in July 2022. This figure is predicted to jump to 90% by 2025.

These are the categories of ecommerce products with the most sales in the UK, as per DataReportal, 2022:

Use of smartphones

GSMA Intelligence indicates that 105% of the British population had a mobile phone connection in February 2022.

Around 92% of mobile phones in the UK are smartphones, according to a survey by Statista in 2021. Almost 90% of mobiles are used to access the internet for a daily average of 2 hours and 41 minutes, as per DataReportal.

Competition

The market is quite saturated in the UK with Amazon, Argos, and Tesco as the biggest players. However, British customers enjoy trying new brands and new products, while having a wide selection of options. There is room for dropshipping businesses in the UK provided it has quick delivery, easy returns, and a high-quality website to compete with other players.

In 2021, a Statista survey found that British shoppers take customer reviews seriously. 90% said they would check product reviews before making a purchase and even more said they wouldn't buy if it had fewer than four stars.

Logistics network

A logistics marketing report from Mordor Intelligence, 2022, mentions that the increased popularity and demand for ecommerce shopping has pushed the logistics network to stay efficient.

The top three delivery providers are DPD, DHL, and UPS. The high number of road haulage operators in the country means that ecommerce purchases often arrive on time to customers.

Summary

To round up, the UK is a strong economy that holds many opportunities for dropshipping. While the main issue new startups may face is competition, Brits are known for appreciating upcoming brands and products. With their love for trying new things, dropshipping can be profitable - just make sure to plan carefully your marketing and have a website to meet their standards.

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