A once in a generation opportunity in e-commerce
THE north of Ireland has found itself in a challenging position with the new trading arrangements posed by the UK Brexit deal. The new paradigm is far from simple in relation to inbound goods from the UK.
But it does provide an opportunity for the whole country from an outbound perspective – and there is genuine scope to build something that will outlast the current arrangements and flourish well into the future.
E-commerce is the perfect vehicle to maximise this once in a generation opportunity and create wealth for indigenous companies that form part of the local ecosystem. Utilising trading data for early 2021 collected on our IRP e-commerce platform, we can see that there has been a marked uplift in trade for many small and medium retailers based in the north selling into the Republic of Ireland.
This is clearly related to one major advantage as the north can trade freely into Europe and the United Kingdom – in an outbound capacity. The most noteworthy thing is that the conditions of trade have been changed and businesses located here are already taking their opportunity via e-commerce.
The large players like Amazon and John Lewis have been hampered by the new customs and trading rules and have, in part, temporarily abandoned their market here in the north and also in the Republic. This “crack in the armour” has been exploited by local SMEs – but the success has pointed to a far bigger opportunity for the entire country. We have a short window to leverage our unique outbound trading position to the UK and Europe with a view to benefitting the local economy in many ways.
The north already has an impressive e-commerce ecosystem with international experience and is well placed to become more than just a trading post. The opportunity is to have local products and services supply the e-commerce trading needs to thousands in the UK, the Republic of Ireland and European SMEs and create a Northern Ireland Centre of Excellence in E-commerce.
From this initial seed, our long-term vision is that this Centre of Excellence in E-commerce should be an integral part of our economy for years to come, regardless of the trading conditions. We are initially investing £20,000 to explore how this opportunity can supply jobs, upskill the workforce and create an environment for growth, spearheaded by our own, home-grown businesses within the ecosystem.
Creating a Centre of Excellence in E-commerce has an immediate opportunity in helping the SME market trade effectively between the Republic of Ireland, UK and Europe. Despite the obvious challenges in 2020, 62 per cent of UK SME online retailers will be aiming to increase international sales revenues this year according to a study commissioned by Royal Mail. The growth of e-commerce is set to continue at pace and the north of Ireland is now uniquely positioned to be central to that growth.
The most critical thing in the short term is that we must establish a structure that is designed to keep the core of the trading data, the service provision and the taxable profit within the north of Ireland.
This is a once in a generation opportunity to create a long term and sustainable ecosystem in the north that both capitalises on the current situation but more importantly builds for the future.
Philip Macartney is chief commercial officer for IRP Commerce