UK market overview

United Kingdom:
Market overview
September
2021

obaninternational.com
2
Oban International:
United Kingdom market overview
Who is this presentation for?
International marketers looking for an
informative yet digestible overview of the
UK market.
What does this presentation
contain?
Information on the UK’s population,
geography, culture, business and digital
marketing landscape.

4
The UK is the 78th largest country by land mass
Twice the size of Pennsylvania…
…but smaller than Oregon.

5
Approximately 66 million people live in the UK
The majority of whom
live in England….
84%
8%
5%
3%
% Population
England Scotland Wales N.Ireland

6
The UK is the 3rd largest population in Europe
July 2021 estimate
Germany 79m
France 68m
UK 66m

7
But only the 22nd largest population in the world
Rank Country Population
1 China 1,397,897,720
2 India 1,339,330,514
3 United States 334,998,398
4 Indonesia 275,122,131
5 Pakistan 238,181,034
6 Nigeria 219,463,862
7 Brazil 213,445,417
8 Bangladesh 164,098,818
9 Russia 142,320,790
10 Mexico 130,207,371
11 Japan 124,687,293
12 Ethiopia 110,871,031
13 Philippines 110,818,325
14 Egypt 106,437,241
15
Congo,
Democratic
Republic of the
105,044,646
16 Vietnam 102,789,598
17 Iran 85,888,910
18 Turkey 82,482,383
19 Germany 79,903,481
20 Thailand 69,480,520
21 France 68,084,217
22 United Kingdom 66,052,076
x 21
x 5
x 20
x 2
July 2021 estimate

8
There are also 250k people in British overseas territories
• Anguilla 15k
• Bermuda 64k
• British Indian Ocean Territory 4k US and UK military personnel
• British Virgin Islands 30k
• Cayman Islands 65K
• Falkland Islands 3k
• Gibraltar 34k
• Montserrat 6k
• Pitcairn Islands 67k
• Saint Helena, Ascension, and Tristan da Cunha 7k
• South Georgia and the South Sandwich Islands 30
• Turks and Caicos Islands 38k
Count as
Commonwealth
citizens and can
vote in British
elections

9
Plus c. 250k people in British Crown dependencies
Isle of Man
Population 85k
Jersey
Population 98k
Guernsey
Population 65k
Not part of UK but UK is responsible for defence and foreign affairs

10
Rural landscapes, urban lives
• 84% of UK residents live in urban
locations
• But land use is primarily agricultural:
• 71% agricultural
• 12% forest
• 17% other
• UK supplies 60% of its food requirements
via 2% of its workforce

11
30% of Britons live in the top 6 urban areas
1. London 9.3m
2. Manchester 2.7m
3. Birmingham 2.6m
4. West Yorkshire 1.9m
5. Glasgow 1.7m
6. Southampton/Portsmouth 930k

12
The UK has a significant North/South divide
• Caused by deindustrialisation
• Northern economy declined as southern
economy grew – led by finance, services
and London
• People in the southeast live longer, have
more jobs, earn more and have a better
standard of living
• Government efforts to redress this meet
with limited success

13
87% of the UK is white but
ethnic mix varies around the country
• For example, London is
60% white
• The London borough of
Newham is 47% white

14
The UK has an ageing population,
with a median age of 40.6 years
Median Age
Year UK Japan
1947 35.1 26.1
2020 40.6 46.2

15
The UK will continue to be an ageing population
• Slower birth rate than most
countries - 164th (out of 194)
• Mean age for mums at first
birth is 29
• Life expectancy right now is 81
- 38th highest in the world
• Monaco residents live longest
at 89

16
Ageing populations are a global challenge

17
The UK has the 17th largest workforce in the world
• UK workforce numbers 35.4
million people:
• 83.5% work in the private sector
• 16.5% work in the public sector
% workers
Public sector Private sector

18
Breakdown of 5.9 million UK private companies
% UK Employees
Large Medium Small
% Turnover
Large Medium Small
Number of companies
Large Medium Small
1, 115,385 micro (1-9 employees)
211,295 small (10-49 employees)
35,600 medium (50-249 employees)
7,700 large (250+ employees)

19
Just under 3 million businesses are active
• 13k high growth:
• 10+ employees
• 20%+ growth per year for 3 years
• 250k+ export and are growing:
• 9.8% of SMEs
• 41.7% of all large businesses

How does the world view the UK?

21
Perceptions vary around the world
• China – exquisite elegant
intellectual – collapsing
• Japan – gentle stable country
– changing
• Brazil – liberal, free markets,
multicultural, cultured – lost
our way

22
People in the UK over-estimate the
negative effect of Brexit on global perceptions
• 71% find the UK an attractive country - joint
4th with France:
• World leading universities
• World leading cultural institutions
• 61% trust UK people (2nd behind Canada)
• People in the UK overestimate negative
effect of Brexit by 50%:
• Europeans more negative view post Brexit
referendum
• Commonwealth and rest of G20 improved view

23
The world loves London
“Britain confuses its standing
with that of London. London is
a great global city. Britain is a
small European country with
ideas above its station.”
Mihir Sharma,
Bloomberg Columnist,
New Delhi

24
International perceptions of main UK challenges
Brexit:
Political chaos from last three years damaged reputation
Internally divided
Boris not a typical PM
Crime:
Producer of synthetic drugs
Major consumer of Southwest Asian heroin, LatAm cocaine
Money-laundering centre
Environment:
Air pollution esp. London
Soil pollution from pesticides
Declining marine and coastal habitats

25
The UK according to Hofstede’s
theory of cultural dimensions

26
UK’s Hofstede Power Distance score – 35 (Low)
• Power Distance - the extent to which the less powerful members of
institutions and organisations within a country expect and accept that
power is distributed unequally.
• Brits believe that inequalities amongst people should be minimised.
• Higher classes believe that more than working classes.
• Exposes one of the inherent tensions in the British culture – between the
importance of birth rank on the one hand and a deep seated belief that
where you are born should not limit how far you can travel in life.
• A sense of fair play drives a belief that people should be treated in some
way as equals.

27
UK’s Hofstede Individualism score – 89 (High)
• Individualism - the degree of interdependence a society maintains among its
members.
• Individualist societies look after themselves and their direct family only. In
Collectivist societies people belong to ‘in groups’ that take care of them in
exchange for loyalty.
• The UK is amongst the highest Individualist scores, beaten only by Australia and
the USA. Brits are highly individualist and private people.
• Children are taught from an early age to think for themselves, to find out what their
unique purpose in life is and how they uniquely can contribute to society.
• The route to happiness is through personal fulfilment.
• As the affluence of Britain has increased, a much discussed phenomenon is the
rise of rampant consumerism and a strengthening of the ‘Me’ culture.

28
UK’s Hofstede Masculinity score – 66 (High)
• Masculine indicates that society is driven by competition, achievement and
success, with success being defined by the winner/best in field
• Feminine means that the dominant values in society are caring for others and
quality of life. A Feminine society is one where quality of life is the sign of
success and standing out from the crowd is not admirable.
• Britain is a Masculine society – highly success oriented and driven.
• Apparent contradiction with the British culture of modesty and understatement.
Critical to understanding the British is being able to ‘’read between the lines’’.
What is said is not always what is meant.
• In comparison to Feminine cultures such as Scandinavia, people in the UK live
to work and have clear performance ambition.

29
UK’s Hofstede Uncertainty Avoidance score – 35 (Low)
• Uncertainty Avoidance is the extent to which the members of a culture feel threatened
by ambiguous or unknown situations and have created beliefs and institutions that try
to avoid these.
• Britons are happy to wake up not knowing what the day brings and ‘to make it up as we go
along’, changing plans as new information comes to light.
• Britons are comfortable in ambiguous situations – the term ‘muddling through’ is a very
British way of expressing this.
• In work terms, this results in planning that is not detail oriented – the end goal will be clear
(due to high Masculinity) but the detail on how to get there is light and the process flexible
to an emerging and changing environment.
• The combination of a highly Individualist and curious nation leads to high creativity and
strong need for innovation. What is different is attractive! This emerges throughout society
in humour, heavy consumerism for new and innovative products and the fast highly
creative industries that thrive here – advertising, marketing, financial engineering.

30
UK’s Hofstede Long Term Orientation score – 51
(middle)
• This dimension describes how every society has to maintain some
links with its own past while dealing with the challenges of the
present and future.
• Societies which score low on this dimension, prefer to maintain time-
honoured traditions and view societal change with suspicion.
• Those with a culture which scores high, encourage thrift and efforts in
modern education as a way to prepare for the future.
• There is no preference in British culture for this dimension.

31
UK’s Hofstede Indulgence score – 69 (high)
• Indulgence is the extent to which people try to control their desires and
impulses, based on the way they were raised.
• Relatively weak control is called “Indulgent” and relatively strong control is
called “Restrained”.
• British culture is classified as Indulgent.
• People in societies with a high Indulgence score generally exhibit a
willingness to realise their impulses and desires with regard to enjoying life
and having fun. They possess a positive attitude and have a tendency
towards optimism. In addition, they place a higher degree of importance on
leisure time, act as they please and spend money as they wish.

32
What does that have to do with advertising?
• Think about messaging
• Ad copy can reflect the Hofstede Dimensions
• Imagery should play to cultural preferences
• Motivating promotions etc.

34
UK economy at a glance
• A leading trading power and financial centre
• 3rd largest economy in Europe, after Germany and
France
• Agriculture is intensive, highly mechanized, and efficient
by European standards
• Large coal, natural gas, and oil resources, though oil and
natural gas reserves are declining
• the UK has been a net importer of energy since 2005
• Services, particularly banking, insurance, and business
services, are key drivers of growth
• Manufacturing still accounts for 10% of economic
output

35
The UK is the 6th largest economy in the world
The World Bank Dec 2020
The 168 countries
outside the top 25
make up less than a
fifth of the total global
economy.
0
5
10
15
20
25
30
USA China Japan Germany India Countries 6-
10
Countries
11-15
Countries
16-25
Rest - 168
% Share of the global economy
Series 1

36
Commonwealth = 2.4b out of 7.4b people
= 32% of pop, 25% of land mass
60% of Commonwealth population are under
30… 1 in 3 of world’s under 30s

37
The Commonwealth
• One of the world’s oldest political groups
• 54 countries
• All equal vote
• Includes half of the top 20 emerging cities:
• India - New Delhi, Mumbai, Bangalore, Kolkata,
Chennai
• South Africa - Johannesburg, Cape Town
• Kenya - Nairobi
• Malaysia - Kuala Lumpur
• Bangladesh - Dhaka
The Commonwealth flag

38
Commonwealth by region

39
The UK is well connected
• 95% of UK are internet users – 13th largest by
volume
• 26.6m broadband subscriptions – 41 out of 100
people have broadband – 8th highest volume in
world

40
95% have a mobile phone, 84% a smartphone
• Brits spend 2h 34mins per day on our
smartphones
• 72% of connections were 4G at end of
2019 – now even higher

41
Most people have bank accounts

42
Debit and credit cards are
most popular online payment method

43
UK is 3rd largest value market for digital payments

44
The UK’s largest trading partners – EU and beyond

45
UK imports and exports are growing

46
Key export markets for UK:
US, Germany, France, Netherlands & Ireland

47
UK exports £372bn goods
– led by cars, power and pharma

48
UK exports £307bn services
– led by business, financial travel, comms

49
UK imports from Germany, US,
Netherlands, China and France

50
UK imports £502bn goods
– led by cars, pharma, oil, clothing

51
We import £197bn services
– led by business, travel, transport

52
Number of exporters
by region – shows
strength of South East

53
UK is 3rd largest ecommerce market
– 8% of GDP and growing

54
Online sales share is growing dramatically
– 36% in Nov 2020

55
UK is Amazon’s 3rd largest market
after US and Germany

56
Key metrics for UK ecommerce
• 55% use the internet to compare
prices
• Average conversion rate of 1.88%
• 3rd behind the US and Germany
• ARPU ( Average Revenue per User)
is $1,325.50
• Mcommerce sales will overtake
desktop by 2023

57
Who are the winners by sector?
• Largest share by sector:
• Fashion – Next
• Furniture and homeware – John Lewis
• Toys and Baby - Argos
• DIY and Garden - Amazon
• Fastest growing sectors:
• Footwear
• Beauty
• Home and garden
• Clothing

58
What are the forecasters saying?
• Traditional retailers struggling – rising costs
and cost of digital transformation
• Digital ecommerce booming - though consumer
preference a blend
• Data protection and balance between
personalisation and privacy are prominent
issues
• The growing popularity of potentially invasive
technologies, like voice shopping, may prove
problematic.
• Social media most promising for boosting
online retail sales

59
The UK in summary
• Punches above its weight globally
• Under pressure to keep its global role
• Connected, predisposed workforce
• Strong import traditions
• Good ecommerce expansion opps
• Large private sector workforce
• Exporting is growing fast
• Good opportunities for international
expansion

60
Get in touch with Oban International
• If you’re planning an international marketing
campaign, it pays to speak to an international growth
specialist. To find out how Oban’s network of Local In-
Market Experts – LIMEs – can create competitive
advantage for your business, please get in touch.
• Connect with Oban International on social media by
clicking on the icons below:
About Oban International
Oban International is the leading digital marketing
agency for international growth.
By identifying our clients' biggest opportunities for global
expansion - and ensuring they avoid costly mistakes - we
help ambitious brands hit tough global targets.
Since 2002, we have worked with a wide variety of
businesses to develop market strategies, optimise
performance in existing markets and launch into new
ones.
Our core team of digital experts, based in our Brighton
UK HQ, work with insights from our unique network of
LIMEs (Local In-Market Experts). Together, they plan and
deliver powerful digital strategies and campaigns in any
market on the planet.

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