e-dition 2013A Study on the Internationalisation ofBritain’s ecommerce BusinessesBRITAIN’SRETAILE-MPIRE
• Retail is transforming itself from a local, national industry into one which isfundamentally about competing globally in...
ecommerce is accelerating the internationalisation of RetailSource: Datastream, Press search, Retailer websites, OC&C anal...
Consumers increasingly search cross-border to meet their needs3Source: Google, OC&C analysisShare of International Searche...
UK retailers are gaining traction internationallySource: Google, StatCounter, Civic Consulting Survey (2011) for EU DG Hea...
International capability is already the ‘norm’ for UK retailersRetailers Delivering Outside the UK% RetailersLanguages oth...
Proportion of International Searches by Company Size% of Searches from Outside the UKThe ‘small’ are embracing internation...
Internationalisation Index: Top 50Indexed Scores Based on Consumer Searches1The jewels of Britain’s Retail e-mpireSource: ...
International ecommerce set to grow seven-fold to £28bnSales from UK eRetailers1, UK & International£bn, % Total, % CAGRSo...
Europe and Asia will be the engines of growth1.9NorthAmerica2.0Asia4.1Central /EasternEurope6.5WesternEurope8.32012Other 3...
When prioritising expansion, market ‘readiness’ matters• ‘Operational Readiness’ reflects thelevel of friction faced by re...
SaudiArabiaNigeriaLithuaniaIsraelChileUkraineArgentinaHong KongNewZealandSouth AfricaSlovakiaRomaniaGreece SingaporeTaiwan...
CanadaPolandRussiaNetherlands China SpainItalyMainstreamFootwearSportsMainstreamClothingGeneralMerchandiseUSALuxuryFashion...
The rules of Retail internationalisation have changedInternational typically a responseto maturing presence in homemarket ...
International ecommerce requires new capabilitiesEngaging LocalCustomers &CompetingEffectivelyDynamic andData DrivenDecisi...
We believe winning retailers will share 5 traits No substitute for a great proposition(range, price, service advantage) ...
• Patrick Wall and all at Metapack• Andrew Starkey at the IMRG• Eric Fergusson at eCommera• All the dynamic entrepreneurs ...
For more details, please contactBOSTONDUSSELDORFHAMBURGHONGKONGLONDONMUMBAINEWDELHIPARISSÃOPAULOROTTERDAMSHANGHAIWARSAWAni...
Upcoming SlideShare
Loading in …5
×

Net Media Planet - Going Global Event - Google Britains Retail E-mpire Report May 2013

1,196 views

Published on

Published in: Technology, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,196
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
15
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Net Media Planet - Going Global Event - Google Britains Retail E-mpire Report May 2013

  1. 1. e-dition 2013A Study on the Internationalisation ofBritain’s ecommerce BusinessesBRITAIN’SRETAILE-MPIRE
  2. 2. • Retail is transforming itself from a local, national industry into one which isfundamentally about competing globally in international markets. This will have aprofound impact on what it takes to succeed as a retailer in 2020• However, this imperative for retailers to internationalise, remains a poorly examinedtopic• In order to understand how big the scale of opportunity from internationalisationcould be and what it takes to succeed, Google UK partnered with OC&C StrategyConsultants to produce this independent study• The study draws on some of Google’s proprietary data and has been discussed withGoogle executives, but OC&C is responsible for the analysis and conclusions• Google UK and OC&C are delighted to launch ‘Britain’s Retail e-mpire’, a study thataims to put the spotlight on the internationalisation of ecommerce, one of the mostmaterial opportunities facing British retailersBackground to the study1
  3. 3. ecommerce is accelerating the internationalisation of RetailSource: Datastream, Press search, Retailer websites, OC&C analysis1. Market Capitalisation based on constant 2012 exchange rate, excludes unquoted retailers, market values on: 25 Apr 20132. International revenue as % of total revenue. Where not available, international sales as % of total stores3. Time from founding to first international presence (store or website)Internationalisation of Top 10 Global Retailers by Market CapitalisationYears, %, $bn4782692574147455010912210070 05010100159020253035607580807060654030205Time to Internationalise (Years)3Lowe’sWoolworthCostcoTescoH&MeBayInditexShareofInternational(%)2Home DepotAmazon.comWalmartBubble SizeIndicates MarketCapitalisation1Amongst the top 10 retailers bymarket capitalisation globally, onlineretailers have had an acceleratedinternational trajectory – years,rather than decades2
  4. 4. Consumers increasingly search cross-border to meet their needs3Source: Google, OC&C analysisShare of International Searches for UK Brands, 2012%15.9%Entertainment & ElectricalsSports28.2%62.5%Luxury Fashion1 Clothing (Mainstream)39.2%28.9%Beauty1. Clothing, Footwear, Jewellery & Accessories
  5. 5. UK retailers are gaining traction internationallySource: Google, StatCounter, Civic Consulting Survey (2011) for EU DG Health & Consumers, OC&C analysis5579106223446192821131367412+46%Europe +39%North America +44%Asia +49%Oceania +83%Other +63%201221220111522010100International Searches for UK Retail Brands1Indexed – Rebased to 2010EU Consumers Purchasing from UK eRetailers – 2011%29%29%33%34%34%35%39%40%41%41%48%49%74%74%93%EstoniaLithuaniaFinlandPortugalBulgariaDenmarkGreeceCyprusIrelandMaltaItalyFranceLatviaSloveniaSwedenCAGR2010-122x growthrate ofsearches byUK consumers4
  6. 6. International capability is already the ‘norm’ for UK retailersRetailers Delivering Outside the UK% RetailersLanguages other than English Offered by Retailers% Offering Languages,% Retailers Offering Specific Language21%21%22%10%26%>100 Countries40-100 Countries5-40 Countries< 5 CountriesNot Offered19%5%10%13%53%More than 107 to 104 to 61 to 3None17%18%22%24%31%40%43%ChineseRussianJapanesePortugueseSpanishFrenchGerman47%74%eg Sports Directeg Mothercare, Wiggleeg House of Fraser,Dorothy Perkins eg Chain Reaction, NextSource: OC&C Website Checks, December 2012, ComScore ,OC&C analysisTop 100 UK Retail Websites5
  7. 7. Proportion of International Searches by Company Size% of Searches from Outside the UKThe ‘small’ are embracing international faster than the ‘large’47%30%13%Small RetailersMid-size RetailersLarge RetailersSource: Google, BvD, Comscore, OC&C analysis1. Online and offline revenue2. Visitors to UK site over 12 months, from Comscore – some manual adjustments made where sense-checks showed large retailers with low site trafficAnnual Turnover1UK Traffic2OR£250m + £25m-£250m <£25m26m+ visits 3m – 26m visits < 3m visits6
  8. 8. Internationalisation Index: Top 50Indexed Scores Based on Consumer Searches1The jewels of Britain’s Retail e-mpireSource: Google Search Data, OC&C analysis71. Does not use advertiser data, e.g. clickthrough, bid values etc and is purely based on consumer queries2. International Share / Volume of queries both based on 2012 3. Volume of International Queries on logarithmic scale 4. Growth in queries coming from outside the UK – 2010-12Total Score(100)Indexed Shareof InternationalQueries(100)Indexed Volumeof InternationalQueries(100)Indexed GrowthRate ofInternationalQueries(100)1 ASOS 100 58 100 462 Farfetch 99 92 45 663 Book Depository 98 96 63 414 Burberry 96 100 83 125 Boohoo 93 26 64 1006 Net a Porter / The Outnet 89 75 78 307 Beauty Bay 86 60 21 948 Photobox 83 72 72 249 Jimmy Choo 81 88 64 1310 Chain Reaction Cycles 76 65 65 2511 Topshop / Topman 72 35 88 2412 Pro-Direct Soccer 72 68 60 1813 Wiggle 72 55 62 2914 Agent Provocateur 71 75 52 1815 Clarks 70 51 73 1916 Superdry 69 40 61 4117 Endclothing 68 47 31 6018 Mulberry 63 54 58 1719 Ted Baker 62 33 53 4020 FeelUnique 61 41 43 4121 Charles Tyrwhitt 61 56 43 2622 Karen Millen 60 43 57 2223 Dorothy Perkins 60 18 62 4124 Harrods 58 42 58 1825 River Island 58 17 72 28Total Score(100)Indexed Shareof InternationalQueries(100)Indexed Volumeof InternationalQueries(100)Indexed GrowthRate ofInternationalQueries(100)26 Specsavers 57 39 54 2427 JP Boden & Co 57 35 60 2228 SimplyElectronics 56 55 26 3329 Mothercare 52 20 60 2630 AllSaints 52 50 37 2031 The Savile Row Company 49 56 23 2032 Matches Fashion 49 48 20 3233 Kitbag 48 51 34 1334 Watchshop 47 26 14 5635 Cath Kidston 45 23 47 2236 Mamas & Papas 44 20 45 2537 Monsoon UK 44 22 55 1238 Overclockers 44 32 36 2139 Surfdome 43 20 22 4540 Reiss 43 22 40 2541 Hobbs 39 18 36 2642 TM Lewin 39 30 32 1643 Sweaty Betty 31 18 12 3444 Links of London 30 25 34 345 Holland & Barrett 28 23 6 2946 Corsets UK 27 26 1 2947 Aspinal of London 25 20 5 2648 Isabella Oliver 22 31 12 149 Sofa.com 21 18 1 2550 DV 247 19 25 13 0
  9. 9. International ecommerce set to grow seven-fold to £28bnSales from UK eRetailers1, UK & International£bn, % Total, % CAGRSource: IMRG, Euromonitor, Forrester, Google Queries, OC&C analysis6339(61%)24(39%)20185637(65%)20(35%)20175034(68%)16(32%)20164533(72%)13(28%)20154031(76%)10(24%)20143628(79%)8(21%)2013InternationalUK+12%20206941(60%)28(40%)20193227(83%)5(17%)20122824(86%)4(14%)1. Excludes grocery, 2man fulfilled and click and collect ordersCAGR2013-20Forecast26%6%8
  10. 10. Europe and Asia will be the engines of growth1.9NorthAmerica2.0Asia4.1Central /EasternEurope6.5WesternEurope8.32012Other 36%1.50.40.40.80.50.220209.827.9Oceania 25%North America 20%6.94.52.72.41.53.8Other11.3OceaniaAsia 39%C/E Europe 49%W. Europe 31%UK ecommerce International Sales Growth by Region, 2012-20£bn, % CAGRSource: IMRG, Euromonitor, Forrester, OC&C analysisCAGR2012-20Ireland, France,Spain & Germanydrive 35% of growthin Western EuropePoland and Sloveniadrive 17% of growthin Eastern EuropeChina, Singapore, HongKong, Philippines togrow by £2bnAustralia is largest singlegrowth market at £1.32bn1. “Other” includes South America , Middle East & Africa9US is key driver ofgrowth at £1.1bn
  11. 11. When prioritising expansion, market ‘readiness’ matters• ‘Operational Readiness’ reflects thelevel of friction faced by retailersattempting to capture sales in thatcountry• Factors considered to identifypotential pain points– English proficiency– Credit / Debit card penetration– Delivery cost– Import tariffs• ‘Strategic Readiness’ evaluates themarket opportunity for both sizeand competitive intensity• Evaluation factors are– Market size 2012– Absolute growth to 2020– Share of leading online retailers– Online share of total retailMarketReadinessOperationalReadinessStrategicReadiness10
  12. 12. SaudiArabiaNigeriaLithuaniaIsraelChileUkraineArgentinaHong KongNewZealandSouth AfricaSlovakiaRomaniaGreece SingaporeTaiwanPortugalIrelandHungaryTurkeyIndiaNorwayMexicoSwitzerlandCzechRepublicAustriaSwedenBelgiumSpainFinlandCanadaDenmarkBrazil RussiaItalyPolandNetherlandsSouth KoreaAustraliaJapanFranceGermanyChinaUSAUzbekistanBosnia-HerzegovinaAzerbaijanMoroccoUruguayPeruGeorgiaIndonesiaEcuadorLatviaKazakhstanEstoniaMacedoniaEgyptColombiaCroatiaUAEPhilippinesVenezuelaSloveniaMalaysiaSerbiaMarket Readiness FrameworkForecast £bn 2020Source: Euromonitor, Forrester, Mintel, World Bank, WTO, Crystal 2003, Parcel Force, OC&C analysis1. Excludes 2man and groceryMajor Markets £180bnBig But Challenging £175bnAccessible Anglophones £30bnNascent Neighbours £20bnA number of markets are ‘ready’Increasing Strategic ReadinessIncreasingOperationalReadiness11
  13. 13. CanadaPolandRussiaNetherlands China SpainItalyMainstreamFootwearSportsMainstreamClothingGeneralMerchandiseUSALuxuryFashionJewellery &AccessoriesElectricalsHome & DIYEntertainmentBeautyFranceIrelandAustraliaGermanyClear winners (eg Fashion, Luxury) and white spacesHigher Reach CountriesHigherReachCategoriesBrand Searches for UK Retailers – Countries & Retail Segments, 2012Average Searches for UK Retail BrandsSource: Google, OC&C analysisMostsuccessfulcountry-categorycombinations12
  14. 14. The rules of Retail internationalisation have changedInternational typically a responseto maturing presence in homemarket though a carefully plannedmulti-year approachInternational expansion pursuedsimultaneously with growing sharein home market – with serendipityand a dynamic planning approachplaying a roleSpeedProximity and cultural similarity askey elements of expansion logicTraction with customers and scaleof opportunity drive the decisionsaround markets to ‘go deep’ or‘skim’SequenceCapital and resource intenseapproach to build presence andinfrastructureLower capital and resourceintensity, also enabled by theability to rapidly test and iterateRiskWas Now13
  15. 15. International ecommerce requires new capabilitiesEngaging LocalCustomers &CompetingEffectivelyDynamic andData DrivenDecisionMakingOperatingGeographicallyDiverseMulti-ChannelFootprintManagingRights andProtectingBrand ImageRisk andForeignExchangeManagementInternationalRegulatory &TaxCompliance14
  16. 16. We believe winning retailers will share 5 traits No substitute for a great proposition(range, price, service advantage) Ability to spot and respond fast toevolving demand Cost effective routes to build awarenessand customer volumes ‘Selective’ and resource-lightlocalisation Mastery of the order economics andmechanics to create profitable customerbehaviourTraits of Winners15
  17. 17. • Patrick Wall and all at Metapack• Andrew Starkey at the IMRG• Eric Fergusson at eCommera• All the dynamic entrepreneurs and business leaders amongst our internationalsuper-league who generously shared their successes and challenges, enabling us totest our theories against their practical experiencesAcknowledgements – we would like to thank:16
  18. 18. For more details, please contactBOSTONDUSSELDORFHAMBURGHONGKONGLONDONMUMBAINEWDELHIPARISSÃOPAULOROTTERDAMSHANGHAIWARSAWAnita Balchandanianita.balchandani@occstrategy.comAlex Mathersalex.mathers@occstrategy.comJohn Franklinjohn.franklin@occstrategy.com17

×