eCommerce: Key Player Insight

Top Competitors of Amazon in the UK: Key Insights

• Amazon Is the Leading Marketplace: In the UK, the world's third-largest eCommerce market, Amazon is the go-to platform for online shoppers.

• eBay a Distant Second: While eBay continues to hold second place, it faces challenges in keeping up with Amazon's growth.

• Emerging Competition: Low-cost marketplace Temu joined the top UK marketplace ranking in 2023, while secondhand platform Vinted reflects the growing demand for sustainable alternatives. Other competitors include Etsy and AliExpress.

Launched back in 2000, Amazon has established its top position in global eCommerce over the decades, with a 2023 gross merchandise value (GMV) of US$728.8 billion. GMV measures marketplace activity, and US$729 billion corresponds to the GMV of a smaller European economy like Belgium.

The United Kingdom is the world's 3rd largest market for eCommerce with a projected revenue of US$169.5 billion by 2024, while Amazon stands with 8.4% of its share in the UK as the undisputed number one.

How far does Amazon's leadership reach in the UK market? Let's compare some of the highest performing platforms.

Top 5 Marketplaces in the UK: Who Are Amazon's Biggest Competitors?

One reason why the competition trails so far behind could be the selection of diverse products across a multitude of categories that Amazon offers. There's no category in which the U.S. giant doesn't lead in the UK eCommerce market.

Besides product selection, Amazon's competitors differ in the services they offer, like delivery time, payment method, and customer expectations, where artificial intelligence (AI) plays a growing role.

In addition, Statista’s 2023 Consumer Insights uncovered a preference of UK consumers for marketplace loyalty: one third of online shoppers prefer to buy from various sellers on a platform. A satisfactory experience is most indicative of whether customers want to repeat purchase.

For Amazon, its outstanding position in the UK helps solidify its head start even further, putting other marketplaces at a disadvantage. See who made the UK's top 5 marketplace ranking by GMV in 2023:

1. Amazon leads in terms of GMV (US$61.5 billion) in the UK, with an annual growth rate of 9% and a special focus on the category Hobby & Leisure (37.1%).

2. eBay follows with the second-highest GMV (US$12.3 billion), despite a decrease in growth of 1.5%. The U.S. enterprise's main category is Hobby & Leisure (26%).

3. Etsy ranks third (US$1.2 billion). The U.S. business sells Fashion most in the UK (42%) and recorded a decline in annual growth (-1.5%).

4. Temu (US$921 million) replaced Tmall in fourth place, with a staggering yearly growth rate of 4,647.5%. Its strongest category in the UK is Fashion (41.2%).

5. Vinted holds the fifth position (US$822.4 million) with a solid growth rate of 36% in 2023 and a focus on Fashion (84%).

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Despite Losses, eBay Remains the Biggest Rival

Competitors eBay, Etsy, and Vinted are having a hard time keeping up with Amazon and some of them have lost business between 2022 and 2023. The reasons for degrowth can be macroeconomic (like rising prices due to inflation), or platform-specific, such as declining user satisfaction or product range/quality.

The gap between the first and second is widening as eBay shrinks while Amazon grows. eBay entered eCommerce as one of the first and biggest C2C marketplaces. Like many eCommerce companies, eBay benefited from the COVID-19 pandemic, but post-pandemic trends and projections for the coming years show that eBay continues to lose engagement and revenue.

Despite this negative development, eBay remains the second largest marketplace in the UK. The question is, for how long?

Temu Enters the UK Online Market and Replaces Tmall

Temu has made a global splash by offering low-cost products with a gamified experience and features like free returns. Temu's success also applies to the UK market, where the PDD Holdings-owned company has multiplied downloads and purchases at a dizzying rate.

Temu managed to knock Alibaba's online marketplace Tmall out of the UK's top 5 marketplaces, replacing it in fourth place. Whether Temu will be able to solidify its top spot in the UK market remains to be seen, but rest assured that other platforms from around the world are vying to take its place.

UK’s Biggest Marketplaces for Consumer Electronics

Consistent with the company's outstanding position, Amazon is the primary marketplace for consumer electronics in the UK, as seen below.

Consumer Electronics worth US$22.2 billion were sold on Amazon UK in 2023. Following further behind at about a tenth of that is eBay (US$2.2 billion).

The remaining platforms fall far below the US$1 billion mark: Temu with US$239.5 million worth Consumer Electronics sold in the UK in 2023, Back Market with US$182.5 million and AliExpress with US$162 million.

UK’s Biggest Marketplaces for Fashion

There are also categories in which Amazon does have a smaller head start, providing the competition with avenues for attack, such as the fashion segment.

Although eBay's main share lies in the Toys, Hobby & DIY segment, it performs remarkably well in the fashion category. The difference between Amazon and eBay is now around US$1.4 billion, which is less than for electronics, where the difference reached into US$20 billion.

The other top marketplaces for fashion in the UK include Vinted, Etsy, and Temu. Vinted, a Lithuanian secondhand marketplace, grew substantially at a rate of 36% between 2022 and 2023.

Overall, it is clear that companies from the United States and China are striving for top positions in the UK, while UK companies tend to rank lower. Occasionally, European companies like Back Market or Vinted make it into the top five, but no one can hope to match Amazon's level.

Prime Days, Black Friday, Cyber Monday: How Amazon Attracts Costumers

To sustain one's growth in times of inflation and geopolitical conflicts, it is helpful to promote purchasing incentives. Amazon achieves this by offering special discounting events such as Prime Days and Black Friday.

Although Amazon typically does not release exact sales figures of the Prime Day, Adobe has estimated the sales figure Amazon generated on its Prime Day in July 2023. It is evident how such special events significantly contribute to Amazon's success by ultimately increasing sales and profitability.

Black Week encourages people to make purchases on all retail platforms, not just Amazon. A growing number of sellers, whether online or offline, try to capitalize on this shopping day. Particularly in regions where holidays are celebrated at that time, this week provides affordable opportunities to purchase gifts for family and friends.

Top Amazon Competitors in the UK: Closing Thoughts

While it is clear that Amazon is the leading marketplace by GMV globally and in the UK, it is particularly strong in consumer electronics. Although it is also the most popular marketplace for fashion, other platforms generate relatively high GMVs, notably eBay.

However, the recent emergence of low-cost platforms with a similar product variety is putting pressure on Amazon as its problems become more apparent. The marketplace's dominance is still strong, but other contenders are waiting to challenge its leadership at the right time. Whatever the outcome, ECDB provides the data and analysis.