Guide to Launching Your E-commerce Business in the UK and EU

The UK and EU e-commerce market is booming, with the sector’s market value expected to reach a monumental 400 billion USD by 2027 in the UK. As the home of some of the world’s fastest-growing businesses, including Gymshark, Smol, and OnBuy, the UK has quickly earned its reputation as the hub for e-commerce innovation. 

Despite this, launching and sustaining an e-commerce business is a mammoth undertaking. From battling with competitors and securing your IP to handling consumer data on a mass scale, today’s greatest e-commerce success stories have often battled with a litany of legal foundations behind closed doors. 

In this article, we take a bird’s eye view of the core legal logistics of launching an e-commerce business in the UK, whether you’re a completely new company, or expanding into new markets. 

Looking for something a little more in-depth? Download a free copy of our 2024 Guide to Launching E-commerce Businesses in the UK, for a deep-dive into the legal strategy behind e-commerce success.

In this article, we’ll cover: 

• Why launch in the UK? A look at the UK e-commerce market
• Key issues when launching an e-commerce business in the UK
• Best practice approaches to launching in the UK: Dive into the report

Let’s dive right in.

Why launch in the UK? A look at the UK e-commerce market

In 2024, the UK is expected to have about 50 million e-commerce users, each descending to the World Wide Web for at-your-fingertips access to a world of commodities. The rise of mobile applications, buy-now-pay-later offerings, and a convenience-first mindset has overhauled the e-commerce industry as a whole. In fact, by 2027, 62% of all retail purchases will be via mobile devices. 

For hopeful businesses, the opportunity is clear: the UK offers an engaged and financially buoyant customer base, with a consumer appetite spanning food, shoes, clothing, medication, beauty, and more. In fact, two-thirds of UK adults prefer to do their food shopping online, 33% prefer to tackle clothing via the web, and a whopping 86% would prefer to do all shopping online, if it was possible. 

As the third largest e-commerce market in the world, following behind China and the US, the opportunity is written in neon lights. But are there risks? 

Key issues when launching an e-commerce business in the UK

There are over 5 million businesses in the UK, each battling to succeed against a wave of challenges. While many succumb to those challenges, (with 28% of new UK businesses closing in the last five years), many others manage to scale to success. 

Of those that make it, a considered, legally informed strategy sits at the heart of a business’s survival. Below, we tackle the core issues you should consider when launching your business in the UK. 

Consumer terms

One of the most important legal considerations will be the integrity of your Consumer Terms of Purchase. These terms will dictate the relationship between you and your customers, the protections available to your business, and the liability you might be exposed to. 

Whilst a quick search will provide you with a tempting collection of templates, simply copying a ready made document that is not tailored to your business or how you operate is risky. In many respects, your Terms of Purchase act as a legal shield for you and your consumer - and they should be a priority to get right. 

An informed e-commerce lawyer, with expertise in the UK, will be able to guide you through what “best practice” looks like, with a close focus on things like pricing, payment terms, delivery of service, returns and refunds, and the extent of your liability. 

Information Requirements

UK legislation requires e-commerce companies to provide customers with certain information before and after a purchase is made. It’s also important to note that this information needs to be provided at certain points within a customer’s journey. 

Many e-commerce businesses stumble here, either in providing too little information or failing to deliver information at the required points. Ensure you’re not one of them, and where necessary, work with a legal expert to guarantee your communication is crystal clear.

Data protection

E-commerce businesses process mountains of data on a daily basis, thanks to the rise of intelligent applications that can monitor user behaviours, purchase signals, preferred interests, and more. Whilst this data can help companies create highly targeted marketing campaigns, it can also put a business at risk. 

And that risk is a big one.

Under the UK GDPR, infringement of data regulations can result in an eye-watering £17.5 million fine, or 4% of annual global turnover (whichever is higher). Beyond fines, the infringement of the GDPR is a surefire way to erode consumer confidence, damage a company’s brand, and halt the revenue-making avenues a business needs to survive. 

Just this year, we witnessed e-commerce giant Shopify face a monumental breach (via a third-party application), impacting almost 180,000 users worldwide. This breach exposed the names, emails, and phone numbers of Shopify customers - and left a sense of distrust in the Shopify users that remain. Not only are Shopify consumers now applying for compensation, but the e-commerce company is now facing a scrutinising road of data audits and regulatory fines. 

For e-commerce companies launching in the UK, robust data protection foundations are truly key, with a consideration for how consumer data is collected, processed, and stored. And, if your business operates on a global scale, you’ll need to consider the transfer of customer data and the data protection regulations (and risks!) of each jurisdiction.

Marketing

Connecting with customers is at the very heart of a thriving e-commerce business - but there are rules and regulations that need to be followed. While it may be tempting to scream from the metaphorical rooftops surrounding your products, it's legally wiser - and often a better marketing strategy - to be strategic in who you connect with. 

In the UK, you’ll need to follow rules around unsolicited marketing, ensuring you obtain clear and specific consent from consumers on the type of marketing they receive. Failure to do so can be costly, from frustrated customers to financial fines which can run into the tens of thousands.

The bottom line? To capitalise on the UK e-commerce market, you’ll need to be crystal clear on the risks and restrictions of your marketing plan.

Intellectual property

Your intellectual property is one of your greatest assets, and, as an e-commerce business, you’re likely to be in a constant cycle of creating and handling intellectual property. However, your creations can quickly become someone else’s gain, with the counterfeit goods market taking up a whopping 3.3% of global trade in 2024. 

Aside from monumental financial losses, counterfeit goods go a long way towards destroying the hard work of your business - from shrinking your consumer base to deteriorating the value of your goods.

For e-commerce businesses launching in the UK, it's important firstly to become familiar with the rights available to you, and secondly, to take a proactive and iterative approach to IP protection. 

Best practice approaches to launching in the UK

For e-commerce businesses launching in the UK, it's key to prioritise a legal strategy that shields your business from risk - while maximising any looming opportunities. 

A lawyer with e-commerce expertise will be able to take you through the pros, cons, and pitfalls of an approach, and help you launch with your best foot forward. 

You should expect to discuss, at a minimum: 

• Customer terms of purchase
• Information requirements
• Website terms of use
• Data protection and GDPR compliance
• Cookies
• Data processing agreements
• Data protection representatives and fees
• Unsolicited marketing
• Intellectual property rights 

Launching in the UK? Start with our report

Preparing to launch your e-commerce business in the UK? Our 2024 guide to launching e-commerce businesses can ensure you take the best approach. Crafted by experienced commercial lawyers, this free guide will take you through the most important legal aspects of launching in the UK (or the EU). 

Contact us today for bespoke legal advice to ensure you stay ahead of the curve—no matter where you operate.