UK firms expand globally with e-commerce

Marks and Spencer have joined the ranks of UK firms using the power of e-commerce to grow overseas.

E-commerce has made a huge difference to the fortunes of retailers around the world. Businesses that may not have got off the ground at all have found niche markets through online sales – and of course, some of the world’s biggest retailers, like Amazon and Alibaba, have made billions without a single physical store.

As more and more businesses realise that online sales are increasingly important for their survival, UK retailers are in a strong position to break into new markets overseas.

At the beginning of April, Marks and Spencer announced that it was planning a massive push to expand overseas, which is hoped to increase international profits by as much as 40 per cent. It will involve opening 250 new physical stores outside the UK over the next three years, with western Europe, India and the Middle East as its priority areas.

Interestingly, the traditional model of having a store on every high street is going out of the window – instead, the company says it is opting for a “bricks and clicks approach” that will see online sales supported by a relatively small number of key flagship operations. Given that Marks and Spencer failed in its last attempt at expansion into Europe in 2001, it is clear that the rise of e-commerce has provided the framework for the firm’s success.

Mainstream retailers are finally catching onto what the likes of ASOS and other online-only retailers have been doing for years, and it’s largely thanks to advances in the UK’s own e-commerce market.

A report from Reuters shows that firms like Marks and Spencer are using the knowledge gained from the UK to harness e-commerce abroad. Britain is the most developed online retail market in the world, according to research, outstripping even the advanced consumer bases of the US and Germany.

But even though the internet levels the playing field to an extent, there will always be challenges in new markets – especially when they are all less developed than where a business started. Building brand awareness is tough in an online environment – though Marks and Spencer is probably well-enough established as a brand to already have a foothold. As UK firms harness the web to access global markets, it will be interesting to see how those challenges are met.