Like bricks and mortar stores, online businesses have felt the economic crisis. While the UK’s fourteen percent growth in Internet sales in 2008 sounds excellent, it is actually a record low growth for this booming industry.
The IMRG Capgemini Index reports that since its index launched in April 2000, it has recorded five thousand percent growth in online sales, meaning that this years meager jump represents a strong setback in the Internet economy.
The UK government did implement, improve or make more available a number of programs to assist business, but the majority of online businesses report that they have had little or no impact and, in many cases, the businesses were not even aware of their existence.
The programs included:
– A loan guarantee program that allows businesses with annual turnover of less than GBP5.6 million to borrow up to GBP250,000 for up to ten years with a government guarantee for up to seventy-five per cent of the loan amount.
– Two and a half percent reduction in VAT
– Expansion of UK’s trade credit insurance program
– Free business health check
EBay’s UK-based Online Business Index reported that only twelve percent of those businesses surveyed benefited from the loan and credit programs and over fifty percent said that the lowered VAT tax made absolutely no difference to their business.
Despite all of these negative reports, UK online retailers are feeling optimistic about the future. There are strong indications that the recession may be coming to an early close and that is good news for everyone.
– U.S. Federal Reserve Chairman Ben Bernanke predicted that the recession will end in 2009 as long as there was a continuing effort to stabilise and strengthen the banking sector.
– The U.K. National Institute for Economic and Social Research called an end to the recession after industrial output showed its first rise in more than a year in April 2009.
How optimistic are retailers feeling?
– Two thirds of online businesses are ordering up to thirty percent more stock for this Christmas than they did last year.
– Sixty-nine percent of online businesses feel confident about the outlook for their business over the next three months.
– Fifty-seven percent of online businesses expect their sales to go up over the next three months
– Sixty-nine percent of online businesses are looking to expand over the next year.
Is this optimistic feeling well grounded in reality? Well, seventy-six percent of online businesses achieved their sales targets in the past three months so there are not only talking heads predictions of an improving economy but also some tangible evidence in terms of business success in recent months.
If you are one of the e-tailers that is not aware of UK government assistance programs, got the UK government-sponsored site, Business Link, for more information.
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Article Source: UK Online Entrepreneurs Optimistic Despite Lackluster Success Of Government Assistance