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Growth of UK e-commerce set to diminish, analysts argue

27 September 2010 - 08:58 by Simon Crisp

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The level of growth seen within the UK e-commerce sector is not going to be as high as in previous years, as the pinch of government spending cuts and wider acceptance of online shopping tools hit consumers, according to experts at Verdict Research.

Over the next four years, the e-commerce market will grow by an annual average of 12 per cent, which is less than half the 35 per cent growth measured in the same period a decade earlier. Last year safe shopping online accounted for seven per cent of the UK's entire retail revenue, or £20 billion.

Over 50 per cent of the domestic population of the UK regularly use e-commerce retailers to buy goods and pay for services and the most frequent online spending demographic is the 35-45 year olds, who spend their money on groceries, technology and clothes.

People in the 15-25 year old age group are less likely to shop online because they lack the means to actually pay for an internet connection in their homes, according to Verdict. It believes that the best way for e-commerce firms to continue to expand is to focus all their efforts on securing the custom of this currently underrepresented age group, although this could be tricky if the economic climate continues to stifle consumer spending.

Verdict's Maureen Hinton said that the next half decade will be a testing one for both consumers and retailers. The fight for sales will be fierce, which will mean that competition will help to keep prices relatively low, although Hinton said that retailers will need to be inventive and come up with imaginative ways of securing consumers' hard-earned cash.

Many e-commerce firms realise that by offering safe shopping online at great value they will gain the trust of consumers and to open up e-commerce to those without an internet connection will really require a push in the m-commerce sector.