By Daniel Hunter

The UK is outpacing its European neighbours in online retail with the North of England overtaking the rest of the country, according to eBay's Public Policy Lab.

Bucking the popular perception that clusters of digital businesses only exist in London, eBay’s report shows that Greater Manchester has a greater concentration of small online businesses than anywhere else in the UK.

The report’s authors calculated “digital densities” based on the volume of small online retail businesses operating in a region and their sales, as a proportion of the local population.

Manchester is followed in the UK digital density rankings by Lancashire and West Yorkshire, revealing a new ‘Northern Powerhouse’ of ecommerce.

These businesses range from fledgling ecommerce start-ups and ‘homepreneurs,’ through to fast-growing businesses like Thingimijigs, which started with just an eBay account, £200 and a kitchen table and now sells branded gifts and accessories for kids globally from a purpose built facility in Burnley.

The top UK regions with the highest concentration of small online retail businesses are:

1. Greater Manchester
2. Lancashire
3. West Yorkshire
4. Leicestershire, Rutland and Northamptonshire
5. Essex
6. Cheshire
7. West Midlands
8. Herefordshire, Worcestershire and Warwickshire
9. Derbyshire and Nottinghamshire
10. Shropshire and Staffordshire

Inner London, which includes Shoreditch and Tech City, is in 26th place.

The report also reveals that the UK is the most advanced market in Europe for global exports.

Over half (51.8%) of small online retail businesses in the UK are ‘global’ — exporting to four or more different continents — more than any other European country. France follows closely on 50.6%, Spain on 41.9% and Italy at 34.6% and Germany at 19.6%.

The number of small British online retailers exporting to 15 or more countries has grown by 33% since 2010, and now almost all online small businesses on eBay in the UK export goods abroad - 91%, in comparison to 28% of traditional offline small businesses.

Sarah Calcott, Director of Operations at eBay UK, said: “Our research shows that technology is opening up tremendous opportunities for small businesses across the UK with digital clusters spread across the country, particularly in the North West and Yorkshire."