As e-commerce revenues surge, how will the post-Brexit online economy look?

4 May 201713 Shares

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Alan Coleman, CEO, Wolfgang Digital. Image: Dave Keegan

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Revenue growth rampant among the few Irish businesses that are online, reports Wolfgang Digital.

In a clear clarion call for Irish businesses to get online ahead of Brexit, new figures from Wolfgang Digital indicate that online firms are seeing revenue surges as high as 45pc.

Across the board, Irish SMEs in particular have been lamentably slow to move their businesses online. According to the IE Domain Registry, 91pc of Irish SME websites have no e-commerce capabilities.

‘We can expect this rampant growth to continue. Online spend represents 6pc of the Irish economy. In the advanced UK market, online’s share of spend is as high as 16pc’
– ALAN COLEMAN

Not only that, it is estimated that 40pc of Irish businesses do not have a website, which makes you wonder: what will become of these digital laggards post-Brexit?

That’s why this morning’s (4 May) Wolfgang Digital Online Economy Report 2016 paints a poignant picture. Those that are online are doing fine, while those still to take the digital plunge risk ending up as flotsam and jetsam on the economic tide.

Online economy growing faster than wider economy

The Wolfgang Digital report shows that for a second consecutive year, Irish e-commerce sites have seen a 45pc growth in online revenue.

During the same period, Irish GDP grew by 5pc.

This shows a level of consistency to Ireland’s online economic growth, which surpasses the bricks-and-mortar economy.

The report shows that mobile is becoming the dominant device used by online shoppers – it now claims a majority 45pc share of traffic over desktop and tablet.

“Irish e-commerce websites once again showed extraordinary levels of revenue growth in 2016,” says Alan Coleman, CEO of Wolfgang Digital.

“We can expect this rampant growth to continue. Online spend represents 6pc of the Irish economy. In the advanced UK market, online’s share of spend is as high as 16pc.”

Post-Brexit, is there safety in numbers?

As e-commerce revenues surge, how will the post-Brexit online economy look?

Image: Wolfgang Digital

The Brexit tide will leave Irish businesses with no online presence even more exposed to the cold winds of change.

‘As the €153bn UK market e-commerce market becomes less accessible to Irish e-commerce websites, the €500bn European market has to become a priority’
– ALAN COLEMAN

While negotiations between the UK and EU may continue to 2019, this study notes indicators of what the post-Brexit online economy will look like.

The share of retail revenue coming from shoppers outside of Ireland declined sharply from 36pc in 2015, to 19pc in 2016.

With the majority of international shoppers to Irish online retailers coming from the UK, the swing from strong pound to euro in 2015, to weak pound to euro in 2016, played a major part in this decline.

Coleman makes a good point in that the EU has a 460m population while the UK has a 60m population. Size matters, but so too do charges.

Cross-border shoppers will likely be slapped with extra taxes and customs charges. For example, a purchase of a €200 jacket may end up setting a punter back €70 in fees.

“With the finer details of a post-Brexit EU yet to be ironed out, there are some early indicators as to how a post-Brexit Irish online economy might look, if online retailers switch their focus to the lucrative European market,” said Coleman.

“As the €153bn UK market e-commerce market becomes less accessible to Irish e-commerce websites, the €500bn European market has to become a priority.

“The twin factors currently making the European market increasingly attractive to Irish business are the EU’s drive to enhance the Digital Single Market, and the fact that our competitors in the UK – arguably the world’s most advanced digital media market – are now floating further and further away from the valuable European market.”

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com