The United Kingdom E-commerce Logistics Market size is estimated at USD 28.04 billion in 2024, and is expected to reach USD 36.94 billion by 2029, growing at a CAGR of 6.94% during the forecast period (2024-2029).
One of the key drivers for the domestic segment in the UK e-commerce logistics market is the increasing popularity of online shopping. Amazon is the UK’s largest e-commerce platform, with 301 million monthly visits.
With more and more people turning to online platforms to make their purchases, the demand for efficient and reliable logistics services has skyrocketed. This has led to the growth of various e-commerce logistics companies specializing in domestic deliveries.
Clothing is the top-selling product for UK online shoppers, with 78% saying it’s their go-to. 56% of online payments in the United Kingdom use credit cards, and 92% of socially shopped products are bought over Instagram. Online shopping makes up 26.5 % of the total retail market in the United Kingdom.
According to an online shopper survey in the United Kingdom in 2023, free shipping was the most important delivery criterion for two out of every three respondents. Fast shipping was the second most important, followed by free return shipping. Carbon-neutral shipping was the least important, with only 13 % saying it was important.
Collaborative delivery models, such as crowdsourcing and peer-to-peer delivery, are emerging trends in the UK's e-commerce logistics market. These models leverage unused capacity in private vehicles to transport goods, providing cost-effective and flexible delivery options.
With the rise in e-commerce and the concentration of the population in urban areas, logistics providers are developing innovative solutions for urban deliveries. This includes using electric vehicles, cargo bikes, and micro-fulfillment centers located closer to customers to reduce congestion and emissions.
The United Kingdom has one of the biggest online populations globally and in Europe. It had about 60 million internet users in 2023, 4th in Europe and 17th globally. The country is expected to have 63 million internet users by 2028. The vast majority of the United Kingdom population, around 98%, is online.
The United Kingdom is 6th in the world in terms of internet penetration rate. In addition, the proportion of households that have internet access in the UNITED KINGDOM is 95%. The most active internet users in the United Kingdom were between the ages of 30 and 39, making up nearly 30% of all internet users nationwide.
Men and women used the internet at similar rates, with only a 2% gap between them. According to a survey of internet users across the United Kingdom, the vast majority of people who use online services and platforms are full-time employees, with around 30% having a bachelor's degree or higher.
Smartphones outpaced all other internet-connected devices by 2023. In the United Kingdom alone, around 77 %of online time was spent on a smartphone. People in the United Kingdom spend an average of 3 hours and 40 minutes on the internet every day, including nearly 3 hours on a smartphone. The most active smartphone users were young adults aged 25 to 34.
With high internet penetration, more people in the United Kingdom have access to online shopping platforms. This has led to a surge in online shoppers, resulting in higher demand for e-commerce logistics services.
The e-commerce logistics market in the United Kingdom is quite concentrated and vibrant. Several key players in the market are actively competing to provide efficient and reliable logistics services to support the e-commerce industry.
The major players include Royal Mail, DPD, Hermes, Amazon Logistics, and DHL. The competition among these companies has led to continuous innovation and improvement in logistics services, ultimately benefiting both businesses and consumers.
DHL Supply Chain (DSC) and AutoStore (AutoStore), the world’s leading contract logistics provider, are growing their partnership in a strategic move to further automate warehouse operations worldwide. DHL, which is already involved in nine operating AutoStore warehouse projects and has four more in the pipeline, is set to become one of the largest 3PL clients of AutoStore, further reinforcing its commitment to digitization and automation. The nine existing Systems currently operate over 800,000 bins. The upcoming four Systems will add an impressive 1.2 million bins, and DHL plans to construct five more facilities in the future in addition to those currently in operation or planned.
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