Retailers are missing out on billions of euro worth of trade every year as consumers continue to do the bulk of their online shopping overseas, according to new research.
The value of goods bought online by Irish consumers has continued to increase over the past two years, growing 13% to €7.5bn.
That growth is expected to not only continue but accelerate to over €14bn worth of online sales a year by 2021.
While the growth of e-commerce presents a golden opportunity for web-savvy firms, the fear is that many SMEs are missing out on significant revenues by virtue of being ill-prepared.
“Ever increasing numbers of Irish consumers are shopping and using services online. This is seen in the increase in spending over the last two years and the projected forecast for online consumer spending to grow from €7.5bn to €14.1bn in 2021,” said Tony Hanway, the chief executive of Virgin Media, which conducted the survey.
“Irish websites account for just 41% — some €3.1bn — of Irish online purchases, with a further €4.4bn being spent offshore. If that trend continues to 2021, over €8bn euro in goods and services will be bought offshore at that time.
“This represents a significant potential loss of trade to the Irish economy.”
The Virgin Media Digital Insights Report illustrates the value Irish customers put on digital technologies, with respondents indicating that they would seek compensation of €390 per month if their broadband service was removed.
This is triple the level of compensation respondents said they would seek when asked the same question in 2014.
The numbers shopping online because the product is not available in high street stores and to avail of cheaper prices have both increased in the past two years.
Taoiseach Enda Kenny encouraged businesses to ensure they take advantage of opportunities presented by the growth in e-commerce.
“It is clear that the digital economy is growing at a very fast pace and it is essential that Irish businesses, in particular SMEs, capture this increasing market,” he said.
“This report clearly highlights the huge opportunity for Irish businesses to increase their share of online sales. Taking the leap to trading online can be a big step for many Irish businesses. It is important that businesses are encouraged to trade online and to maximise the opportunities of the digital economy.
“Supports are in place to help, including the Trading Online Voucher Scheme, which was launched in 2014 as part of the Action Plan for Jobs and provides matching funding to establish an online trading presence.”
© Irish Examiner Ltd. All rights reserved