43% Increase in New UK Ecommerce Businesses in 2020


A new report from Your Ecommerce Accountant shows that 2020 was a huge year for new ecommerce business registrations in the UK.

The data below shows new ecommerce businesses registered on Companies House every year since 2017.

Whilst growth has been exponential over this period, 2020 saw the biggest increase yet, with  35,589 new ecommerce businesses registered throughout the year, a jump of 43% on the previous year.

This means that the cumulative total of ecommerce business in the UK stood at 82,727 as per 31st January 2020.

The Data

new ecommerce companies uk

New eCommerce Companies Registered (UK)5,0667,76414,39435,589
Cumulative Total24,98032,74447,13882,727
YoY % Growth20%24%31%43%

Please feel free to use the data on your site, with reference to Your Ecommerce Accountant.

Why Have There Been So Many New Ecommerce Businesses Registered in 2020?

The shift to online business by many retailers in the UK has been fairly constant over the last few years, with customers shifting more and more to online shopping habits. £3 out of every £10 is now spent online and there’s no doubt the coronavirus pandemic accelerated this process.

Whilst the growth of online business is nothing new, an increase of 43% in new ecommerce businesses in 2020 is a huge spike from previous years. There are several factors as to why there were so many new ecommerce businesses registered in 2020, with a few standout reasons below:

Ecommerce Businesses ‘Filling the Void’ of Closed Businesses

Due to the forced closure of many ‘bricks and mortar’ businesses caused by government shutdown during the pandemic, ecommerce businesses often filled the void.

Whether it was a new food delivery service, online retail business or online entertainment there were opportunities for online entrepreneurs to find gaps in the market during 2020.

startup business

Employees Furloughed or Made Redundant Take the Plunge

Whilst it’s tempting to say some of the growth of online business was down to shifting consumer habits, it’s also likely to be the result of many employees experiencing a change in their employment circumstances.

Starting an online business is a dream for many people – and it’s likely that many employees who found their working circumstances changed – either through the furlough scheme or being made redundant – may have used this as the incentive they needed to start their own ecommerce business.

Ease of Starting an Ecommerce Business

In general starting an ecommerce business can be a much less risky and costly than starting a ‘bricks and mortar’ business, thanks to lower overheads such as staffing costs, premises and even – in the case of dropshopping – the need to store and distribute the products.

It’s never been a better time to start a new ecommerce business, with seller platforms, sourcing products, marketing and business costs all more attractive than ever

With user-friendly ecommerce seller platforms such as Shopify, Amazon and eBay all helping to simplify the startup process, entrepreneurs can quickly and easily set up an online offering for their products or services.

Dropshipping is also becoming more and more popular with the ease of sourcing products and selling directly from the manufacturer meaning a hassle-free setup without the need for storing products, delivery and inventory management.

Startup business services such as marketing, graphic design and accountancy are also more price competitive than ever. There are also a number of DIY tools that simplify many of the tasks needed for ecommerce startups for those looking for a more hands-on approach.

Ecommerce Training & ‘Gurus’

There’s no doubt starting a new ecommerce business requires a range of skills that you may not have needed previously, particularly if you are working as a one-man band or small team. 

You will need to understand ecommerce marketing, accounting, sales as well as IT skills and knowledge of specialist software in order for your business to succeed.

Thankfully there are a huge range of ecommerce training programs – many of them free – as well as online guides and even ‘ecommerce gurus’ (some better than others!), all of which can help you gain clarity for your goals and develop the skills needed to acheive these.

Ready to Start your Ecommerce Business? We can help!

Your Ecommerce Accountant are specialist accountants for online businesses. We understand the platforms, software integration and the challenges ecommerce businesses face. Along with fixed-price accountancy services, we provide expert advice to all our clients to help them scale their businesses.

Book a free, no obligation consultation on your ecommerce business today!

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Free 30 Minute Consultation

Why not grab a Free 30 Minute Consultation with an Accountant, they can answer any questions you have about your e-commerce or marketplace business, guide you on tax efficiency and see if we can help you.

You Have Nothing to Lose & A Lot to Gain
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