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Department for International Trade: E‑commerce exports – microdata linking analysis

September 2022

Cross border e-commerce has dramatically expanded in recent years. Rapid innovations in IT and communications allowed for entirely new business models based on e-commerce. Despite its growing importance, little is known about its nature and the scale due to the lack of specific data.

Our study provides important insights on this growing area of international trade, helping policymakers in shaping the future of UK trade policy and maximising this new opportunity.

Cambridge Econometrics applied an innovative method of microdata linking to create a new dataset with which to analyse e‑commerce trade. Use of microdata-linking allowed us to create a new dataset that can provide unique insights on E-commerce exporting activity of UK firms that otherwise would not have been possible if using the datasets individually.

Thanks to the support from the Office for National Statistics and UK Data Service, we obtained secure access to restricted business-level datasets:

  • The ONS E-Commerce Survey
  • The ONS International Trade in Services Survey

By linking these datasets, we created a unique variable-rich dataset covering information on E-commerce exports of UK firms. Our analysis provides insights on the characteristics of firms engaging in cross-border e-commerce exports, as well as insights on their service export activities.

We focused on firms engaging in e-commerce exports using:

  • a website or an app
  • Electronic Data Interchange (EDI) systems, i.e. electronic transmission methods such as XML or EDIFACT

Key findings:

  • Between 2010 and 2018, the share of firms receiving e-commerce orders from abroad via a website or an app increased slightly, from 14.5% to 16.4%.
  • In 2019, e-commerce sales to customers located abroad accounted for 3.8% of the turnover of UK firms, of which 2.5% were website or an app sale, and 1.3% were EDI sales.
  • Large firms (with employment of 250 or more) are 50% more likely to export using a website or an app, compared to small firms (with employment less than 50).
  • The most important destinations for services exported by UK firms engaging in website or app exports are the U.S., Germany, Switzerland, Spain, France and Ireland.
  • Among firms exporting using a website or an app, the largest services exports categories include computer services, charges or payments for the use of copyrighted work, postal services, and other business and professional services.
Anthony Barker Chief Strategy Officer [email protected]