What is driving the growth of online businesses in London?

By the way, are you aware that the entire UK’s e-commerce market has already exceeded the £2,089.6 billion mark and might continue making significant strides in the next few years? This places the country as the third largest e-commerce market worldwide after China and the US. And obviously, cities like London play a significant part in this.

So, if you have been interested in this space and are wondering why the e-commerce sector could be growing, then worry not. This article will go to the depths of this discussion, highlighting some intriguing insights that will keep you ahead. Let’s set off.

The power of online bonuses

Of course, bonuses are not new in the e-commerce sector. Since time immemorial, businesses have been using them for different purposes. For instance, in the iGaming sector, providers use perks like Bitcoin bonus promos to engage returning customers and attract new ones. With them, players can discover new games and learn new skills in risk-free environments. And if customers find more such offers on online platforms, they will likely prefer them over their physical counterparts.

In fact, according to Convenience and Convert, close to 93% of shoppers use at least one discount code throughout the year. This proves that most customers are seeking such experiences, and if they find them, they can become more connected. And that is exactly what most online businesses in London are doing.

You may be surprised to learn that offering a bonus pack could increase sales by up to 73%. As if that is not enough, about three-quarters of customers claim that they often scour their inboxes to find relevant discounts. This means that as more online businesses offer such features, more customers could actually turn to digital platforms, leading to more growth in the sector.

The popularity of the internet

The widespread popularity of the internet has also played a great role in advancing this industry. According to Ramsac Ltd, internet penetration in the capital was about 98.3% in 2021, so you can imagine where the figures stand as of now. Especially in sectors like online entertainment, such improvements really come in handy. You don’t want to imagine engaging in a fast-paced movie that keeps buffering at peak moments just because of poor internet connectivity.

But now, players can enjoy improved experiences in most parts of the capital, thanks to internet advancements. To make matters even better, full-fibre broadband providers have been making efforts to provide even better internet experiences. Just recently, Community Fibre confirmed plans to fulfil a full-fibre broadband network to more than two million homes in London by the end of 2024.

As of October 2024, it had already connected over 310,000 residents and businesses in the city alone, accounting for an 85% rise in its number of customers. You can imagine what this means for businesses that heavily depend on fast internet speeds like live streaming. And now that more stakeholders are committed to supporting such developments, we may actually see the e-commerce sector grow more.

The role of artificial intelligence

It’s almost impossible to think of London without associating it with tech advancements. In fact, the latest report by the Global Startup Ecosystem placed the capital in the second position for ecosystem startups. It’s not any different when it comes to AI. Just recently, the city topped Europe in terms of venture capital investment into AI and ranked third globally.

Artificial intelligence, as you may know it, has an enormous computational ability to crunch large data sets into meaningful insights in a matter of seconds. It’s actually why many online businesses in the city are taking advantage of it to improve competitiveness. Let’s take personalisation, for instance.

Studies have shown that most modern shoppers are seeking personalised experiences. A good example is one that was done by Exploding Topics, which noted that about 60% of consumers were more likely to return to a platform if it tailored shopping experiences. After all, who would mind such experiences, especially now that our schedules tend to get busy and finding time to explore the internet can sometimes be difficult?

Besides personalisation, London businesses are also using AI to strengthen their cybersecurity efforts. By the way, do you know that more than a quarter of businesses experienced data breaches in the UK in 2024 alone? Cybercrime is increasing greatly, but technologies like artificial intelligence prove to be really helpful in combatting these instances. Good enough, two tech giants, Microsoft and Salesforce, confirmed plans to increase their AI operations in the capital, providing good grounds for the further spread of the technology.

What is our final verdict?

Well, as you can see, a lot is really changing in the London e-commerce sector. Especially technology-wise, more innovations are emerging that might really advance the sector.

But looking at the commitment of various stakeholders, it seems as though we are just at an infancy stage, and there could just be a lot more to come in the future. With all these factors put together, London could actually become the global e-commerce lead in the coming years.

Feature image by AS Photography on Pexels