UK is the ‘most internet-based major economy’

[Whitey]

The internet contributes to 8.3% of the UK economy, a bigger share than for any of the other G20 major countries, a new study suggests.

The "internet economy" was worth £121bn in 2010, more than £2,000 per person, researchers at the Boston Consulting Group (BCG) said.

That made it bigger than the healthcare, construction or education sectors.

The UK also carries out far more retail online than any other major economy.

Some 13.5% of all purchases were done over the internet in 2010, according to BCG, and this is projected to rise to 23% by 2016.
[bbc.co.uk...]

[jecasc]

Now the only question is: Is the internet so big in the UK or the rest of the economy so small...

[HuskyPup]

This really does not surprise me whatsoever.

The UK also carries out far more retail online than any other major economy.

This is a very important point and especially so where the supermarkets are concerned. Tesco has shown the profitable way forward and, more or less, the other big supermarkets have copied them. I live in a relatively small town yet every afternoon and evening supermarket vans are delivering mostly from 15-20 miles away.

The success of reliable online-only electronic sellers and the closure or conversion of a couple of big electronic groups has had a remarkable influence, plus the success of ebay and other such channels, my forecast of 14-15 years ago is looking very accurate indeed.

I was definitely having a crystal ball day!

[engine]

I believe that the high cost of fuel in the UK means it's cheaper to order stuff online and get it delivered than to drive out, pay for parking, then drive back. It's especially cost-effective when many e-tailers offer free delivery

[Old_Honky]

UK Grocery Retailers charge for home deliveries usually around 5 pounds per delivery. Some also offer 30 minute delivery windows. This is far too cheap when you consider the cost of paying someone to pick the order, load the van and deliver the goods then you have the cost of fuel and the logistical planning required to hit that 30 minute window.

The only conclusion can be that the web orders are being heavily subsidised by the normal in person customers. If the on-line grocery sales continue to grow at the current rate, in the near future the delivery costs will have to be increased dramatically. Right now you are being seduced with a relatively low cost option, as soon as you have all become too lazy to actually go out of the house (like a true hunter-gatherer) and bring home your own food the supermarkets will all increase their delivery charges to an economically viable level.

[brotherhood of LAN]

I wonder if the prevalance of debit cards has anything to do with it.

[thirteen]

That article is thin content. It doesn't even give names of largest vendors in the UK that are experiencing growth from UK online business growth.

[Whitey]

The press release is here : [bcg.com...] and there's a link that takes you to the report which explains the methodology of the research.

The $4.2 Trillion Opportunity: The Internet Economy in the G-20

The Internet economy is growing more than 10 percent per year in the G-20 nations. No one—no individual, business, or government—can afford to ignore its ability to deliver more wealth to more people more broadly than any economic development since the Industrial Revolution. This report quantifies the Internet’s economic impact.

[graeme_p]

I just blogged about this. I will not repeat it all here, but the quick summary is that all online sales put together are about three quarters of Tesco's turnover, and (after adding things like internet advertising) I simply cannot make the numbers add up to anything like 8.3% of GDP (especially as a business’s sales are much greater than contribution to GDP).