Two thirds of fastest-growing e-commerce firms based in South East

By Daniel Hunter

Two thirds of the UK’s fastest-growing e-commerce businesses are based in London or the South East, according to research from independent law firm Berg.

Analysis of Berg’s E-commerce Power 50 — a list of the UK’s online businesses with the fastest-growing sales over the previous three years — found that 32 of the companies, or 64%, are situated either in the capital or the wider South East region.

By contrast, just 12% are located in the North, with the Midlands and the North West providing four businesses each (8%) and Yorkshire two (4%). Wales had one company in the Power 50, while the North East and Scotland had none.

The data, supplied by Experian, demonstrates that e-commerce businesses outside the South East are falling behind.

Tim Leigh, of Berg’s E-commerce and Technology team, believes the research indicates that London and the surrounding areas are acting as a magnet for tech-savvy businesses and other regions must act now if they are to close the North-South divide.

“We know that London has the upper hand when it comes to e-commerce and technology businesses but this research highlights how other South East areas, such as Surrey, Hampshire and Kent, also attract these fast-growing companies. E-commerce businesses need first-class infrastructure, particularly high-speed broadband, which is far easier to find in the South East," Leigh said.

“The beauty of e-commerce businesses is that they can be set up from a bedroom or small office, but high-speed broadband coverage is patchy and only certain locations have the super-fast internet connectivity for them to operate.

“We would like to see the Government and local authorities, along with private sector ISPs, prioritising the roll-out of high-speed broadband in smaller towns and cities so that the UK becomes a more even playing field for those setting up e-commerce businesses.”

In the Berg E-commerce Power 50, the South West also fared well, with six businesses making the list.

South London-based Specialist Limited - the company behind car accessories brand Yaktrax - increased its turnover by 313% to £466,000 in 2011, making it the fastest-growing company in the list.

The Centre for Retail Research (CRR) has predicted that online spending in the UK will increase by 14% in 2012, reaching £57.4 billion.

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