England is located in the southern part of Great Britain. It is the largest country in the United Kingdom in terms of both landmass and population. About 55 million people live in the region, which is approximately the same size as Greece, with an area of 130,279 m2. The British capital city, London, is both the largest city in England and the most international — more than one-third of the residents were born outside of the UK!
To the north, England is bordered by Scotland. Wales borders it on the west. Aside from that, it is surrounded by the ocean: the North Sea to the East, the Celtic Sea to the Northwest, and the English Channel, which separates Great Britain from France and the rest of the European continent. A tunnel — affectionately known as “The Chunnel” — was built in 1994, which allows trains to travel directly between France and England.
System of Government
The United Kingdom (England, Wales, Scotland and Northern Ireland) as a whole is governed by the Government of the United Kingdom, which is a parliamentary system of government. Although the British monarchy plays an important ceremonial role, it does not hold legislative power. Whereas Scotland and Wales each have their own parliaments, the country of England does not.
Economy
As it has for centuries, the United Kingdom (and, consequently, England) enjoy a highly developed and market-oriented economy. It has the sixth-largest nominal gross domestic product in the world and the twenty fifth-highest GDP per capita. It accounts for 3.3% of the GDP worldwide. In 2020, the UK was both the fifth-largest importer and the fifth-largest exporter in the world.
Different countries and regions within the UK have varying levels of economic strength. In terms of Gross Value Added (GVA), England is the strongest economy in the UK with a GVA per capita of £32,857. Within England, London has the highest GVA at £54,686 while Northeast England has the lowest at £23,569.
Language
As might be expected, the national language of England is English. British English is different from American English in terms of spelling, punctuation and some vocabulary. There is also a subtle difference in register and slang. Although Americans can easily read British English and vice versa, the saying that they are “two countries divided by a common language” is quite true.
For this reason, it is advisable to tailor the marketing language for each country if you plan to sell your products in both the US and the UK. This is especially important for product descriptions and marketing slogans!
Within England, many different dialects are spoken. However, although these have their own pronunciation and slang, the written language doesn’t change. This means that the various English dialects are not something you need to worry about with regards to your e-commerce website.
Currency
The official currency in England is the British Pound (GBP), which is also known as the Pound Sterling or simply the Pound. It is used in the United Kingdom, Jersey, Guernsey, the Isle of Man, Gibraltar, South Georgia and the South Sandwich Islands, the British Antarctic Territory, and Tristan da Cunha. The pound is the oldest currency to be in continuous use since its inception and still being used today.
Brexit
In 2016, 52% of UK inhabitants voted to have the United Kingdom leave the European Union — colloquially known as “Brexit.” After extensive negotiations, the UK officially left the European Union at 11 p.m. on 31 January 2020. As a result, free trade and free travel between the UK and the EU was brought to a halt. As of October 2021, EU residents are required to show a passport (rather than an ID card) when traveling to the UK. There are also restrictions on duty-free items, meats, and dairy products that passengers are allowed to bring from the EU to the UK and vice-versa.
Brexit has also had an impact on trade between the EU and UK. The relationship between the UK and EU remains close, and the “zero tariffs, zero quotas” Trade and Cooperation Agreement means that goods originating from the UK or the EU are not subject to import duties. However, goods originating outside the two areas may be.
Aside from that, the UK is now treated like any other foreign nation in terms of customs and taxation. For example:
- Businesses now need to file customs declarations when importing and exporting products to England and the rest of the UK (excluding Northern Ireland) or when moving wares through Great Britain.
- There are additional licensing and/or paperwork requirements for importing or exporting certain goods such as waste, hazardous chemicals, GMOs, alcohol, tobacco, or fuel.
- The rules and procedures for collecting VAT when selling to customers in England and the rest of Great Britain are different from those within the EU and Northern Ireland.
- If you have an EU business and are selling to customers in the UK, you will need to pay VAT in the UK according to the UK rules and rates.
- EU businesses wishing to operate within the UK must apply for an EU Economic Operators Registration and Identification (EORI) number in order to complete the customs formalities.
Internet usage
As in most countries in Western Europe, internet usage in England (and the UK) is nearly universal. In early 2020, 96% of the British had internet access; only 6.3% stated that they had never used the internet. Furthermore, 87% of them said that they had made a purchase online within the previous 12 months. The most popular categories for online shopping were clothing and choses, while around one-third of the population had also ordered food online. During the COVID-19 pandemic, residents spent almost twice as much time surfing the internet as they did in 2019, according to the internet provider Openreach.
Online Shopping Habits
England, along with the rest of the United Kingdom, makes up the fourth largest e-commerce market in the world. And, per person, the British spend more for online purchases each year than any other country.
The largest share of this incredibly lucrative market is held by Amazon, followed by the supermarkets Tesco and Argos. These three companies create around one-fourth of all turnover in the British e-commerce market. As the area of Britain with the largest population, the residents of England are responsible for a significant portion of that turnover.
As in many parts of the world, cash payments lost some of their popularity as a result of the COVID-19 pandemic. But for online shopping, the British were already fans of Paypal before the pandemic. It was the most popular payment method for online shopping in 2019. Credit cards, particularly Visa, are also popular in England. The most popular search engine is Google, which has a market share of around 85%.
Summary
England is an attractive market for e-commerce retailers. With a strong economy and a population that loves spending money online, it has the potential to be a worthwhile sales target. However, because of the customs and VAT complications created by Brexit, businesses should definitely consult a tax advisor before expanding their business to the UK. The effort required to prepare customs paperwork for every shipment to the UK should also be taken into account.
One possibility for decreasing the level of complexity would be to establish a warehouse within the UK. This would speed up shipping and make it easier to process returns. It would also solve the problem of preparing customs paperwork for individual orders, which could be a major benefit for larger companies with sufficient turnover.
Sources
- https://en.wikipedia.org/wiki/Monarchy_of_the_United_Kingdom
- https://en.wikipedia.org/wiki/England
- https://en.wikipedia.org/wiki/Pound_sterling
- https://en.wikipedia.org/wiki/Timeline_of_Brexit
- https://www.instituteforgovernment.org.uk/explainers/brexit-transition-period
- https://ec.europa.eu/taxation_customs/united-kingdom_en
- https://www.ons.gov.uk/peoplepopulationandcommunity/householdcharacteristics/homeinternetandsocialmediausage/bulletins/internetaccesshouseholdsandindividuals/2020
https://www.ispreview.co.uk/index.php/2020/12/openreach-see-uk-broadband-usage-double-in-2020-to-50000pb.html
https://ecommercedb.com/en/markets/gb/all - https://op.europa.eu/en/publication-detail/-/publication/b80dec39-9750-11eb-b85c-01aa75ed71a1/language-en
- https://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom