Cross-border online retail demand remains high entering 2017
Online retail order growth was up 11.3% year-on-year in January, according to the latest data from the IMRG MetaPack UK Delivery Index. Growth in January was also down -32.1% on December, in line with the established pattern at this time of year.
This start matched our growth forecast for 2017 (+11%), which would result in 1.3 billion parcels / 1.25 billion orders being sent by UK retailers through UK carrier networks for the year if maintained.
Post-Brexit – and the subsequent devaluation of the pound – we have seen a general increase in the percentage of parcels going cross-border. This continued in January, with 32% going to other markets – a big uplift on 25% last January.
There has also been a shift in where these orders are going. In August 2016, for the first time we recorded a higher percentage going to non-EU destinations. This remained the case until November, but in December the percentage going to EU destinations jumped up to 56%. This grew even higher in January 2017, reaching 59%.
Andrew Starkey, head of e-logistics, IMRG, said:
“The UK has long been a retail destination for overseas shoppers but, following Brexit and the sharp drop in sterling’s value, it has become a ‘value for money’ retail destination. Over the past 12 months, the average percentage of orders going cross-border from Index retailers is almost 27%. Orders going to non-EU destinations rose sharply in the months after Brexit, probably driven by US demand as the dollar gained most against the pound during that period. However, EU destinations are now accounting for the biggest share again with a similar rise in average order values.”
Chris Hoskin, head of marketing at MetaPack, said:
“Clearly customers outside the UK are very sensitive to the fluctuations in price and the value they perceive they are getting as a result. The findings in the Index highlight that during Brexit negotiations, UK retailers can be certain that their overseas customers will be keeping a very close eye on how they can benefit from changes in the value of the pound and this will offer them opportunities in the coming months.”