Internet sales boom in the UK, but France is the one to watch
for internet sales - a market that has already proved to be rich
pickings for personal care producers. But research suggests the
French market is set for even bigger growth.
According to the latest figures from Mintel, the UK market recorded total sales of €9.79bn in 2005, just ahead of Europe's largest economy, Germany, where sales came in at €9.71bn.
In France internet sales came in at €6.50bn in 2005, putting it a long way behind in third place, but the market researchers say that rapidly increasing internet usage, coupled with changing attitudes to online shopping are likely to mean that this market will provide significant growth for personal care marketers in the coming years.
This kind of growth has already taken place in the UK, where Mintel figures reveal that in the UK sales have grown 32 per cent in the period 2000 - 2004 to reach €18.33m.
This figure makes it the fourth biggest consumer goods category, behind alcoholic drinks and tobacco, food and clothing. Likewise internet sales of personal care products had the highest sales growth rate during the four year period.
Last year Body Shop chose to launch its on-line sales in the UK market, forseeing big potential linked to high internet use. Their plan proved to be a wise move, with a significant growth in internet sales being one of the factors that helped to sustain the company in a highly competitive environment.
However, Mintel's research suggests that future growth in the UK is likely to be curtailed by a series of rises in the Bank Of England lending rate which has served to 'cool off' consumer activity recently.
Sales of personal goods online in the UK are expected to continue to grow at healthy rates, but increasing internet use and stronger retail conditions in other European countries means that the rest of Europe looks set to catch up on the UK, with France, Germany, Spain and Italy earmarked for specific growth.
Mintel says that given the current condition the UK is expected to remain the biggest market for retail internet sales, growing 102 per cent in the period up to 2010.
However, as the France market matures, growth is expected to top 200 per cent in the same period, with both Spain and Italy also expected to witness similar developments from a smaller base.
"The business to consumer e-commerce sector has come of age and is gaining consumer acceptance as a 'normal' retail sales channel," said Neil Mason, senior retail analyst.
"Mintel is confident that on-line sales of goods will grow strongly over the next few years as this channel matures. But physical shops will not sit back and watch their trade drain away, they will respond by making the physical shopping experience more enjoyable and rewarding with much better interaction from informed and trained staff."
