The consumer electronics business in the UK is a competitive market. This specific market has already seen the impact of globalization with many popular brands such as Apple or Lenovo competing on a global scale. Consumer behaviour has an impact on consumer electronics businesses as well. Since the world entered a global lockdown, online shopping has become a popular form of consumerism.
Consumers are increasingly turning to the internet for their consumer electronics needs. Platforms such as Amazon, Alibaba or eBay have also revolutionized consumer electronics shopping. The amount of market share in the UK market for top giants like eBay, Amazon or Etsy is staggering. According to statistics, Amazon has a market share of 41% in the Consumer Electronics category alone while eBay holds 13%.
This goes both ways for sellers. Sellers are no longer limited to certain locations but can find consumers from all over the world on these platforms. These consumer electronics can be sold at competitive prices as well, due to the lack of physical constraints that come with consumer electronic markets.
However, if you noticed it, many sellers who sell on platforms such as eBay or Amazon also sell these products through their websites and offer various payment methods. Usually, the products that these sellers offered are cheaper on their websites than in the marketplaces they sell on. This is because they do not need to pay fees and commissions for the marketplaces.
This blog post will explore why marketplaces may not be the best place to shop and how we can motivate UK buyers to purchase consumer electronics directly from the sellers' websites.
Tax issues
Consumer Electronics in particular is one of the most popular products that are sold online in the UK. However, have you ever questioned how much Taxes the global marketplaces pay to HMRC in the UK?
A consumer electronics business in the UK is subject to VAT and, therefore it has to pay 20% on its profits. However, when buying from marketplaces such as eBay or Amazon your product will be sold by a seller who is not subject to VAT. This means that the consumer does not pay any form of tax for their purchase, while at the same time increasing revenue for marketplaces such as eBay or Amazon. The UK consumer electronics business is thus being forced out of the marketplace by sellers from other countries who don’t pay any form of tax in the UK. You can read about it here
With this in mind, British consumers should all consider purchasing consumer electronic products directly from UK consumer electronics businesses. This will not only help other country's consumer electronic businesses but it would also create more jobs and opportunities for the small business owners in the UK as well.
Employees welfare
We heard so many stories on how Amazon has been accused of encouraging its employees to work for longer hours, paying them less than the minimum wage and treating their staff badly. They have also been known to employ temporary workers even though they are doing permanent position responsibilities.
This is not just a problem in Amazon but it applies to other consumer electronics businesses as well if you look at the recent statistics. According to the ACAS website, consumer electronics businesses are among one of the top five industries that have a high number of disputes. This is due to their long hours and bad working conditions which eventually led them to be fined for not paying some employees correctly.
Under UK workers laws consumer electronics businesses in the UK are required to pay their employees £11,850 per year so what these online platforms are doing is depriving consumer electronics businesses of this. Therefore, as part of the UK consumers, supporting marketplaces like this would be considered unethical for us to keep continuing to do so.
Fair Competition in the Marketplaces
We have discussed consumer electronics businesses in the UK that are affected by the competition with international sellers on marketplaces such as eBay and Amazon. However, there are still lots of questions to be answered surrounding the unfair competition that is taking place in these global marketplace platforms between sellers from different countries competing with each other including the UK businesses.
How can consumer electronics businesses compete fairly with other sellers on platforms such as eBay or Amazon? Before answering this question it is very important to note that the marketplace platforms are not at fault here - they’re just doing what their name suggests. They are there to provide a platform for buyers and sellers to meet, do business together and make the world a better place.
However, at the same time, these platforms also failed to acknowledge the long time fault practices from many Chinese sellers. As we all know, in these popular platforms, there are a lot of Chinese sellers selling cheaper or counterfeit electronics products, or giving poor customer services and fake reviews. This is the main reason consumer electronics businesses are having a hard time competing with them - that and many other reasons.
Even though Amazon or other similar platforms do offer protection policies on illegal practices like this, they didn't do much to stop the problem. And because of this, consumer electronics business owners in these platforms have no choice but to call for the government’s help to do something about it and take action on these unfair practices that could affect their consumers too.
The only realistic solution is for UK consumers to stop buying consumer electronics products from these marketplaces. This might sound harsh but it is the only way to ensure that consumer electronics businesses in the UK won't be affected anymore by these unfair business practices and poor customer services on marketplaces like eBay or Amazon.
How can we support UK small businesses?
With all these facts and statistics that consumer electronics businesses have been facing, it is about time to stop buying consumer electronics from online marketplaces. It does not just affect the UK small businesses, but it also affects consumers’ rights and consumer safety. If we want to support small businesses in the UK, then why not do it by buying consumer electronics from them directly? This way you will be supporting small business owners that are complying with laws set out by the government.
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