More than half a million jobs in UK online retail sector

The study, from IMRG, shows that online businesses are a growing force in the UK jobs market, generating wealth for the nation’s economy, reducing the cost of living and driving new export business.

The first UK e-retailers began trading in 1994, just sixteen years ago.  Since then the Compound Average Growth Rate (CAGR) of employment in online retail has been 19% (18.9%).  If growth continues at this rate, there will be one million e-jobs by 2013, and approaching three million by 2020.

83% of the online retail businesses (160), surveyed in new research by IMRG / IMRWorld, started trading since 1st January 2000.  3% of them started trading in 2010.

The survey reveals that more than 600,000 British jobs are now either directly created in or support the UK’s estimated 150,000 online retail businesses.

The e-retailers surveyed now, on average, employ six times as many staff as when they started trading.  The average number of staff that their businesses employed when they started trading was five (5.1).  Today the average number of employees is thirty (29.51), a growth rate of 579%.

78% of the businesses surveyed expect to take on more personnel during the coming year, while 39% say that they intend to recruit additional staff within the next three months.

James Roper, Chief Executive of IMRG comments: “It is clear that being competitive in the online marketplace is critical both for businesses and the economy.  E-retail is making a huge contribution to the UK’s wider economic health, creating revenue, new employment and opportunities for people to purchase goods at lower prices.

“Britain is recognised as leading the world in online retailing, representing a third of all online shopping in Europe, which presents unique and immediate opportunities to create more British jobs by expanding our cross-border trading, helped by global use of the English language, our respect as a trusted trading nation, our advanced payments, security and delivery infrastructures.

“The internet empowers the entrepreneurs on whose success Britain’s future prosperity will rely, so it is vital that the next Government keeps itself well informed about e-business to ensure that it recognises when and why its help may be necessary, and to avoid making unworkable political demands that routinely undermine online trading.”

The IMRG / IMRWorld survey results also showed that of the e-retailers surveyed:

- 45% earn 90-100% of their revenue via e-commerce
- 25% recorded sales increases of more than 50% during the past year
- 52% recorded sales increases of more than 20% during the past year
- 64% expect to recruit additional staff within the next six months

A cast of thousands
For every person employed as an online retailer, another works in support of e-retail trade, providing skilled services such as distribution and delivery, customer support, payments, website development, search, marketing, security and administration.

The largest of these areas is distribution and delivery, which we estimate currently employs 108,000 people to deliver nearly one billion parcels that will be generated by online shopping in 2010, a figure that swells by approaching 10% in the run-up to Christmas.

eBay
eBay surveyed 458 of its online retailers last summer.  All were registered as businesses on the eBay site and had annual turnovers of between £100,000 and £3.4million on eBay alone, excluding other sources of income.  The average turnover for survey respondents was £242,000 and the average number of employees was eight - 44% employed three or more people.

This showed that the UK has over 120,000 online businesses on eBay alone, generating sales of €1.9 billion per year.

International e-Trade
eBay research shows that internet sales drive exports, by making it possible for SMEs to export around the world.  Overseas sales are big business for British eBay sellers, with exports making up one in six of their sales, in cash terms.

88% of businesses sought growth by engaging in cross-border trade in the last quarter of 2008.