A €3bn wake-up call: 60pc of online shopping left Ireland in 2017

19 Feb 20181.17k Views

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Irish consumers spent €3bn out of €5bn with online retailers overseas in 2017.

A new report confirms what we already fear to be the case: the vast majority of online spend leaves Ireland.

Irish consumers spent €5bn online in 2017, with €3bn (60pc) of that going to online retailers overseas.

‘Only 40pc of online retail spending goes to Irish websites, which is disappointing for indigenous businesses’
– MARY LAMBKIN

According to the latest Consumer Market Monitor report by the Marketing Institute of Ireland and UCD Michael Smurfit Graduate Business School, we are back to boom-time levels of spending.

According to the report, disposable income in the Irish economy stood at €102bn, eclipsing the last peak experienced a decade ago in 2007.

Retail spending was up 7pc to €40bn, despite losing at least €3bn to overseas suppliers through online spending.

Drivers of growth

The main drivers of this growth are population expansion, along with increasing employment. There are now 2.2m people at work, up 48,000 year on year, up by 344,000 (19pc) from the low point in 2012.

Growth of 2.2pc is forecast for 2018 and 1.8pc for 2019, which will bring another 90,000 people into the workforce.

Pay increases have also contributed to the rise in disposable income, with pay rates up by around 2pc per annum for the past three years. Increases of approximately 3pc are forecast for this year, and a similar rate is predicted for 2019. Households across the economic spectrum are now starting to gain from strong employment and wage growth.

“It is great to hear the cash registers ringing again for Irish retailers, and signs are positive for continued growth,” said professor of marketing at UCD School of Business, Mary Lambkin.

“The rapidly expanding labour market and rising incomes are two significant factors fuelling spending; however, a significant amount of retail spending is leaving the country.

“Only 40pc of online retail spending goes to Irish websites, which is disappointing for indigenous businesses. This is something that can be improved upon, but will require investment in websites and e-commerce platforms, as well as access to decent broadband infrastructure,” Lambkin, the report’s author, said.

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com