Six of the UK’s online heavyweights, including Asos, Boohoo, Ocado and The Hut Group, have banded together to create the UK Digital Business Association (UKDBA).
As e-commerce looks set to become the UK’s most popular method to shop, accelerated by the Covid-19 pandemic, the trade body will represent online businesses and support companies that want to move their operations online.
E-tailers have been criticised by bricks-and-mortar businesses for paying a lower proportion of tax per sale than physical retailers, resulting in a bitter rivalry between businesses.
As a result, calls have been made by some of retail’s biggest physical players for the UK government to 'level the playing field’ on tax.
Earlier this month, some of Britain's biggest beauty sellers, including bosses from Tesco, Asda and Morrisons, signed an open letter to Chancellor Rishi Sunak to reform the controversial 25% business rates tax.
However, their pleas have been in vain.
Online odyssey
Online retail grew 285% over the course of the pandemic, while sales across online totalled £17.3bn in 2019 compared with £4.1bn ten years prior, according to research by accountancy firm Grant Thornton.
Meanwhile, UKDBA members saw an increase of 41% in employee numbers from 2016 to 2019, with around 10,000 jobs expected to be added to their headcount this year.
“Our membership has helped underpin the UK as the most advanced e-commerce market in Europe,” said Iain McDonald, founder of UKDBA and Non Executive Director at Boohoo.
“The British online industry is one of the UK’s greatest success stories and the UKDBA is here to champion our members, their customers’ interests, providing them a voice in a rapidly evolving world.”
The organisation’s establishment is on the back of a rampant takeover of physical retail chains by online businesses.
Following its collapse in November, the lion’s share of Arcadia’s portfolio has been taken over by fast-fashion seller Asos, while Boohoo snapped up Burton, Wallis and Dorothy Perkins to complete the sale.
Boohoo was also the successful bidder for struggling department store chain Debenhams.
The deal saw Carol Kane and Mahmud Kamani’s business acquire Debenhams’ £400m online business, which generates around 300 million visits annually, for just £55m.
Boohoo is, however, not expected to keep the century-old retailer’s physical retail outlets, resulting in thousands of job losses across the sector.
