Small fashion e-tailers feeling confident says Royal Mail survey

By

Sandra Halliday

Published
Jan 19, 2018

Management at small and medium-sized e-tail businesses in the UK are feeling confident about their prospects for this year and that’s partly due to the growing appeal of UK fashion and beauty abroad.

In fact, while 64% of small businesses as a whole expect to increase their international sales revenue in 2018, for the fashion sector, that figure rises to 68% and for beauty/health it rises to 69%.

The figures from a survey by parcels carrier Royal Mail, which said that overall, 74% of UK small-to-medium-sized enterprises (SMEs) in the e-tail sector think their sales to UK and international customers will rise this year.

However, they also expect costs to rise with buying an issue for 34% of them, logistics/delivery for 32% and advertising for 27%.

None of that is a surprise, of course. The strength of UK e-tailers in the fashion sector in particular was highlighted in several surveys last year with global shoppers feeling ever more confident buying from fast-expanding names such as Asos, Missguided and Boohoo, as well as from a raft of smaller websites.

But as such businesses have grown, even the strongest among them has had to swallow higher costs due to the weaker pound. That’s especially so in fashion where outsourcing to countries that bill their goods in US dollars (such as China) is dominant.

And logistics costs are rising too. as online sales expand. Every e-tail sale costs more to process than a face-to-face sale does, with fashion e-tailers also facing a higher percentage of returns.

But when it comes to overseas expansion, the balance shifts back in the favour of e-tailers. While physical store operators have to open stores or sign franchise deals, something not always possible for smaller businesses, online expansion is a less complicated affair.

Some 68% of UK SME online retailers currently sell overseas, 80% of them to Europe, followed by the US (35%), Canada (31%) and Asia (17%). But in the fashion sector, 88% sell to Europe, 53% to the US, 28% to Canada, and 25% to Asia, with only the Canadian sales percentage lower for fashion-specific vendors. 

In fact, the US is the single biggest destination country for UK goods, followed by France and Germany with Spain also a major market.