The UK is the third largest economy in Europe; a leading trade and financial centre with robust transport connections and the second largest port industry in the continent, offering numerous growth opportunities. As a major gateway for many companies doing business there and in Europe, the UK has significant influence over global trade affairs and should be understood as part of the wider economic picture.
After reading this guide you will understand the opportunities presented by the UK and how to take make the most of them, as well as have a general understanding of UK’s place in the global balance of powers and why this affects businesses.
2 Expanding business to the UK
When planning how to grow your business abroad, it’s important to consider the current climate of the market you’re planning to enter.
The UK is a major gateway for many companies doing business there and in the EU. More companies locate their businesses to the UK than anywhere else in Europe, a strategy that provides access to 500 million European consumers.1
The UK offers a robust transport infrastructure, including the second largest port industry in Europe, the largest air transport system in Europe and a strong rail network.2 Listed by Forbes as the fifth best country for business, the UK is a leading trade and financial centre, and is the third largest economy in Europe, behind Germany and France.
The UK is home to a population of 65 million people and its ecommerce market is the third largest in the world, valued at almost 153 billion pounds in 2016.3 Across the UK, a lot of people shop online, and the average spend per consumer is high. UK shoppers make up 7% of the global ecommerce market and 33% of the European ecommerce market.4
3 Quick facts and advantages of doing business in the UK
There are enterprise zones in the U.K. that offer companies incentives to locate their businesses there. Perks include reduced taxes, simpler planning rules and financial benefits1
The U.K. is the fifth largest economy in the world2
Transport infrastructure in the U.K. is efficient and compact. As a result, shipping rates are often lower than they are in other countries3
4 Customer trends
It’s crucial to think about customer behaviour when expanding in new markets. How does your target customer usually buy products? What’s their preferred method of delivery? The following factors will help you consider how customer trends will affect the way you go about doing business in the UK.
British shoppers prefer delivery to home services; the option to collect online purchases in-store is also very popular (47% choose it)1
British consumers are used to low delivery rates when purchasing within Europe; they are more likely to buy when free delivery is offered on standard delivery
Almost 60% of online shoppers in the UK have purchased cross-border, typically from American and Chinese businesses2
British shoppers prioritise low cost delivery over speed of delivery; they are comfortable with a 3-5 day delivery window
Nearly 64% of British shoppers report purchasing goods from one retailer over another based on the delivery options offered3
5 Fulfillment models
Cross-border into the UK
There are a few things to consider before deciding to ship your product cross-border into the UK.
If you are manufacturing in Asia, it may make sense to ship directly from the manufacturer to reduce transportation costs
If you have an existing site within the EU, shipping goods from Europe into the U.K. is relatively inexpensive and transit times are short
If you have an existing site in the U.S., you may consider shipping directly from the U.S. (transit times are short)
The Golden Triangle of logistics spans from Northamptonshire up to the M1 of East Midlands Airport and west to Tamworth.1 It's home to huge distribution centers and transport hubs, and storing inventory there provides access to over 90% of the UK population within a 4 hour drive.2
Other attractive storage locations include London and the Manchester to Leeds corridor.
Short transit times and efficient transportation costs make the U.K. an ideal area from which to fulfill into all of Europe. It’s especially popular for business to consumer products.
Small parcel carriers
Royal Mail/ ParcelForce is the largest parcel carrier, generating revenue in excess of £9 billion.1
- Royal Mail
- UK Mail
Less-than-truckload (LTL) and truckload (TL) carriers
- XPO *DHL
Royal Mail ↩
7 How to start doing business in the UK
When weighing up your move into the British market, think about the pros and cons of incorporating a company and the type of company structure that might suit you. You’ll need to work out any applicable duties and tariffs for your product and whether you must pay VAT. You’ll also have to determine whether you need an import declaration and any trademark registration required. Depending on where your goods are coming from, confirm whether they can be imported, and find a fulfillment center and carriers that provide coverage in the regions you’re targeting.
Market Finder contains a breakdown of the World Bank’s Doing Business Index, where you can get a heads-up about the ease of doing business in the U.K. It ranks on a scale of 1 - 190 how easy it is for a business to set up and run a local firm in each of the world economies. 10 topics are assessed to gain the score. These include the ease of getting electricity, the ease of getting credit, and the potential for cross-border trade.
When trading in a new market, it’s good to know the administrative, regulatory, and logistical challenges that may lie ahead. Navigating legal requirements and working out logistics is made a lot easier with Market Finder - find further support and tools including in-depth guides and insights.
Ingram Micro Commerce & Lifecycle Services provides logistics solutions to help businesses connect supply and demand.
The materials provided on the site are for informational purposes only. For financial, tax, or legal advice, consult a specialist.