E-commerce is a global industry. When we started the Cashback Industry News, it was created to track the news, developments and trends in the worldwide industry. The Brexit vote is not just a UK e-commerce issue, it has global implications as we saw in the global market turmoil and losses the day after the vote.
It’s very difficult to come up with any immediate positive outcomes for the e-commerce industry after the Brexit vote to leave the EU. E-commerce is a global industry that works best with a relatively free flow of business with fewer rather than more regulations, trade barriers and logistical limitations.
In looking over news coverage the day after the vote to exit the EU, here’s a summary of concerns raised by the technology and e-commerce sectors about Brexit:
So far, none. Crickets!
Maybe there will be some positives eventually? But they’re not evident at the moment and nobody is stepping up so far to claim otherwise.
Following is a roundup of news coverage of Brexit impact on technology and e-commerce in the UK and abroad.
BREXIT: What happens now for multichannel & ecommerce retailers?
It’s official. The UK has voted to leave the European Union.
The news opens up a period of uncertainty. What will this news mean for multichannel and ecommerce retailers, up to now used to trading in a single market with free access to markets and with freedom of movement? We’ve taken some initial soundings on what happens now – and in the longer-term.
Justin Opie, managing director of UK etail trade association IMRG, says it’s too soon to say. “The actual impact of Brexit is very difficult to quantify,” he said. “At the moment we have no idea on timeline to officially leave the EU, what trade deals will be put in place or whether shopper confidence will take a hit (or indeed whether that could be short-term or long-term). One obvious area that will need to be addressed concerns the regulations governing cross-border trade into EU countries, which are currently covered by EU legislation such as the consumer rights directive and data protection directive. The fact is Brexit may have a deep impact for online retailers or it may end up just seeming like business as usual, with a few minor tweaks.
“The uncertainty generated has obviously led to sharp fluctuations in economic measures such as the currency, but again how short- or long-term these impacts will be remains to be seen. The most important thing now is that we accept the result, like it or not, and start debating how industry can move forward successfully within this new reality in a pragmatic way.” Via internetretailing.net
UK votes to leave EU: Retail reacts
There are huge consequences and changes following the vote, but the initial takeaway from the referendum result is uncertainty.
A number of retailers told Essential Retail in the run up to the vote that they were concerned about the uncertainty of leaving the EU: Jim Buckle, COO, FeelUnique; Tony Page, CEO, The Original Factory Shop; Gracia Amico, CEO of Pets Pyjamas and Andrew Robb, COO, Farfetch, to name a few.
This morning, Patrick O’Brien, content director at Verdict Retail, warned retailers need to prepare for a period of high volatility.
“Consumer confidence will be very fragile during a prolonged period of political instability. With import costs rising with the fall in the value of the pound, prices will rise, and many people will put off big-ticket purchases until they have more confidence in their own personal economic prospects. Heavy share price falls at housebuilders point to market concerns over housing price falls and a slowing number of transactions, which will lead to a contraction of sales at home related retailers.” Via essentialretail.com
For European Startups, Brexit Is an Ugly Divorce Where Each Side Gets Half the House
Even for hardy startup entrepreneurs known for their ability to make lemonade out of lemons, those in Europe were in for a particularly sour surprise on Friday when they woke up to a cascade of shocks following the Brexit referendum in the U.K. Many of them reacted with a mixture of resilience and uncertainty.
Immediately after the results were announced, financial markets went into a tailspin and the British pound fell the most it ever has in a single day, hitting a 31-year low. Prime Minister David Cameron resigned and Britain itself faced the possibility of a breakup, with Scottish politicians suggesting a new referendum in Scotland on leaving the United Kingdom and staying inside the EU.
“No one knows what’s going to happen next,” Taavet Hinrikus, CEO of the peer-to-peer money transferring network TransferWise, told Fast Company in an email. “Nothing’s changed yet but everything’s changed…Our focus is on business as usual as much as possible, providing the best service we can to our customers.” Via fastcompany.com
Brexit is the last thing troubled luxury retailers needed
hings are about to get even tougher for struggling luxury retailers.
The U.K. vote to exit the European Union adds yet another wave of uncertainty to sales and profits at the high end, which have already taken a beating due to a stronger dollar, slowing economic growth and a shift toward spending on experiences versus goods.
The British pound tumbled to a 30-year-low Friday, making high-end goods outside of the region more costly. Global financial markets likewise dove, putting pressure on the portfolios of wealthy shoppers, whose net worth is more directly tied to market fluctuations.
And with the euro simultaneously moving lower, the Brexit is likely to create ripples on luxury brands’ U.S. flagship stores, which depend on tourists for a chunk of their sales. Foreign shoppers have already cut back on spending in the U.S. because of the stronger dollar.
Retailers based in the U.K. will face complexities and higher costs due to increased trade barriers, as they will have to pay import duties and taxes on items that are made in other European countries, said Hana Ben-Shabat, a partner in the retail and consumer practice of A.T. Kearney Brexit is the last thing troubled luxury retailers needed
What Does Brexit Mean For Tech Companies? Lots Of Friction
The U.K.’s decision to leave the European Union not only has major implications for the world economy, but will undoubtedly have a negative impact on the tech sector around the globe, say experts and analysts.
“The [U.S.] tech sector has the most offshore earnings of any S&P 500 sector company,” says Atul Lele, chief investment officer at Deltec International Group. In the immediate term, he says, currency fluctuations in the U.K. are likely to have a negative impact on earnings in upcoming quarters.
“At one point after the vote, the British pound fell more than 10%, a low not seen since 1985, and currencies will likely remain volatile,” notes Cam Hoang, partner at the international law firm Dorsey & Whitney. The sinking value of the pound could also affect tech hardware companies like Apple, which would have to raise product prices in the U.K. in order to maintain the value of its products. There’s also a chance Britons will be less inclined to buy new smartphones if the economy takes a downturn.
In the long-term, there could be deeper impacts as a result of changing legislation. Once the U.K. is no longer part of the European Union, it will have to redraft trade agreements and a slew of other legislation, which will ultimately impact U.S. companies that have operations within U.K. borders. Via fastcompany.com
Why Brexit is Bad for Tech Companies in UK (and Everywhere Else)
Fragmented regulation, hiring barriers, and worst of all, uncertainty.
Tech stocks got as beaten up as everyone else following the news that the UK would leave the European Union, with big players like Google, Microsoft, and IBM cratering by between 4-5%. Brexit is also almost certainly bad news for smaller tech companies and startups—in a poll taken before the referendum, 90% of respondents in the UK tech sector opposed leaving the EU.
While the tech sector may not be hit as hard as, in particular, banking, there are some big reasons that the Brexit will make not just Great Britain, but Europe, a harder place to start or run a successful tech company. Via fortune.com
Fashion World Expresses Shock at Brexit Vote as Markets Take a Hit
British designers, universities and related institutions were very much in favor of the country remaining in the EU, arguing the freedom of trade and flow of citizens was a boon for business – and creativity.
Many in the industry throughout Europe immediately took to social media to express their disappointment in the result, which saw a record turnout of 72.2 percent, with 52 percent voting in favor of Leave and 48 for Remain. Analysts also warned that the result could impact luxury goods and fashion firms that do business in Europe, given the drop in the value of the pound against the euro and dollar.
“A dark day indeed,” wrote Christopher Raeburn, who took his bow during London Collections: Men earlier this month in a T-shirt that trumpeted his pro-Europe stance. “Heading to Paris for SS17 sales, to continue to meet and work with our European friends and to work out how this will impact in the longer term.” Via footwearnews.com
Brake Slamming Brexit Could Slow Amazon.com UK Expansion Plans
Brexit would impact Amazon.com, Inc.’s (NASDAQ:AMZN) expansion plans in the UK, according to a report by CNBC. Hiring could become difficult for the U.S.-based online retailer, which relies on low wage immigrant workers to staff its fulfillment centers. The workers may find it harder to work in the UK. Earlier this year, the e-commerce giant announced plans to open two fulfillment centers and create 2,500 permanent jobs in the UK in 2016. The company will open one fulfillment center in Coalville, Leicestershire, where 500 new permanent jobs will be created over three years. Another fulfillment center will be opened in Manchester, where the company plans to create 1,000 new permanent jobs in next three years.
In 2015, Amazon created 10,000 new jobs across Europe. Currently, the company employs over 40,000 people across Europe. The online retailer is planning to create several thousand more new jobs in Europe this year. The 10,000 new permanent roles added last represents a 50% increase compared to 2014.
Earlier this year, the online retailer said that it is investing to expand its European Fulfilment Network, increase EU-based research and development, and build new infrastructure to support its growing cloud-computing business, among other initiatives. Via learnbonds.com
Report: Brexit could put Amazon’s U.K. growth on ice
It’s easy right now to think the worst following the U.K.’s historic Brexit vote to leave the European Union, but the truth is that no one knows yet to what extent it will negatively affect commerce. The actual “exit” of Brexit may not happen for a couple of years, and there are even cases being made for why it might not happen at all, despite the vote results.
If it does happen, it’s true that companies, such as Amazon, that are planning to invest a lot of money and hire a lot of people in the U.K. in the coming months and years may need to tread lightly and continue to revisit the scope of their plans. Brexit will result in higher labor costs, a surplus of certain skills and a deficit of others, according to Global Equities Research, slashing the profit margins of many businesses.
However, regarding Amazon in particular, it’s fair to wonder if the web-based retailer might be among those that are able to conduct business as usual even if Brexit causes problems throughout the U.K. economy.
Why? Amazon is a retailer that has built an empire in part on strategic and just plain cold-blooded discount pricing. Some retailers, particularly smaller U.K. based retailers, might have trouble meeting a widespread need for cheaper goods, but as a global giant, Amazon has an ability absorb to a great extent any post-Brexit pricing declines the market may demand. And if the demand is there from customers, Amazon may have no choice but to keep fulfillment center expansion on track. Via Retail Dive
Logistics Executives Say Brexit Will Rattle European Supply Chains
Shipping and logistics operators say the U.K. vote to leave the European Union will rattle regional supply chains as Britain rebuilds its trading relationships and rules.
Logistics companies said the “Brexit” vote could have a two-pronged impact in the near term, potentially cutting into the movement of goods but also fueling more demand for services to help retailers and manufacturers navigate changing regulations and trade rules.
“There clearly is going to be a period of transition here where everyone is trying to figure out exactly how Brexit will take place. But it’s not like the U.K. will stop trading with the EU and the U.S. or anyone else,” said Andrew Clarke, chief financial officer at Minneapolis-based C.H. Robinson. Via wsj.com
‘England/London now a third-rung concern’: Brexit reaction from the US so far
The polls didn’t get it right and the electorate has spoken in the United Kingdom: out with the EU. Reactions from the result are understandably all over the place, with each camp digging in to say that it was the right/wrong decision.
It’s early days, to be sure, and Michael Roth, chairman and CEO of IPG told his leadership, in an email from Cannes that: “Yesterday’s decision will undoubtedly lead to market volatility in the short-term, both in Europe, as well as globally. It’s important to remember that what does not change is the fact that the U.K. is a vital cog in the world’s economy, and that together with our clients, we’ll find footing in a post-Brexit world. In the months and years ahead, we will be prepared to comply with new regulations as we serve our multinational clients, which may require changes to our legal entity structure. Throughout this process, our priority will be to take care of our people. While short-term volatility is certain, we expect markets to normalize as the news is digested. At our company, the long-term is the time-horizon we focus on, and our people and clients should rest assured that we will not be making any changes to the structure of our network based on immediate concerns.”
The Drum asked others here in the US and abroad about the decision and their reaction to the historic vote of discontent. Via thedrum.com
UK Tech Startups Prepare for Life After Brexit
Entrepreneurs working in London’s tech sector got a rude awakening this morning when they looked at their phones: against the bookmakers and pollster’s olds, Britain had voted to leave the EU.
Around 90% of technology founders in the UK didn’t want this result. Many of them are from overseas themselves. Today, still reeling from the shock of a result that could have major economic ramifications, startup founders in the London are having to consider new strategies for growing their companies in a country that suddenly doesn’t seem as welcoming to the foreigners they want to hire.
“It’s just a very depressing day,” says Herman Narula, founder of simulation software maker Improbable which is based in Farringdon, London and recently raised $20 million from Andreessen Horowitz. Via forbes.com
Doom, Gloom and Unease: London’s Tech Scene Reacts to Brexit
At Second Home, a co-working space for startups in a trendy part of East London, young tech workers were discussing the ramifications of the Brexit vote as a gourmet ice cream truck served fresh scoops out front Friday. Young people voted overwhelmingly to remain part of the European Union, according to exit polls, and many of those working in London’s burgeoning tech scene were horrified by Britain’s decision to break away.
“People were shocked when they woke up this morning,” said Sophie Hill, chief executive officer of Threads Styling, a fashion and e-commerce company. Hill, who grew up in Northern England, said she was dismayed that so many from her home town, particularly older people, voted to exit the EU. “I consider myself European,” she said.
She has about 50 employees globally, many of them under 35, and plans to hire many more. “It makes us question whether we have 100 people here, or 50 here and another 50 in Paris,” she said.
With the break from the EU, many in the tech sector were left questioning whether the city can fulfill its promise of becoming a global technology hub. They worry an exit from the E.U. will make it harder to hire people and raise money from investors. Via bloomberg.com
Will Brexit cause a Techxit? 10 ways Britain’s EU exit will affect technology
1. Devastating blow to tech firms
Britain’s departure from the European Union is a devastating blow to UK businesses, especially those in the technology industry. Words cannot describe how disappointed I am that the British public turned its back on the EU; choosing years of economic uncertainty over being part of a thriving economy that has helped Britain to progress phenomenally in terms of trade, competition, employment and skills. Many companies based in the EU will be looking to attract agile UK-based firms, such as those in the technology industry. With the advantages of a single market across the water and possibly a weakening UK economy at home, it will be no surprise that some firms seriously consider a shift in focus, potentially turning Techxit into a reality.
– Askar Sheibani, CEO, Comtek
2. End of the road for fledging firms
Leaving the EU presents some challenges for the tech sector in the UK. Whilst over 85% of Tech UK members polled in March expressed a desire to remain within the EU, the country as a whole voted differently. London in particular has enjoyed a period of being the European Hub of tech development. The city’s strong financial standing has seen huge growth in Fintech companies in particular. The access to funding, talent pools through freedom of movements and large international tech business choosing to establish offices in London have provided a real competitive advantage to London. With the uncertainty of Brexit now a reality, the tech sector faces a number of potential challenges. Some high-profile companies have strongly indicated that they will consider exiting the UK. Impact on sterling, interest rates and access to funding over the coming months as a result of the UK choosing to go it alone are at best going to cause some bumps in the road and at worst, we could see fledgling tech companies disappear off the map.
– Graham Seddon, partner, Menzies Via information-age.com
Brexit’s Winners And Losers: How the UK Decision Will Impact Europe’s VC Ecosystem
The UK has held a pivotal position in European venture capital as a hub for both investors and startups, and that’s particularly true in categories where it has been strong, including fintech, games, and biotech.
The decision by UK voters to leave the European Union will have significant ripple effects on the VC landscape both in Europe and beyond.
Here are the top concerns and likely impacts, according to early views we rounded up from investors, founders, corporate execs, government studies, and analysts.
European vs. UK funding and deals
But first for context, here’s what the relative weight of the UK is in terms of overall investment in VC-backed companies in Europe. The UK drives a significant share of activity and dollar funding, so any major change in the UK’s relative weight in this picture would mean a significant shakeup. Via cbinsights.com
Brexit: China Could Be the Biggest Winner of All
Now instead, a truncated common market in Europe will undercut the global competitiveness of its companies. European firms — from big banks to tech start-ups — would be much better positioned to take on rising Chinese champions if they were able to capitalize on a full-fledged Europe-wide market.
Politically, too, Brexit can only widen China’s scope for action. As China challenges the West’s cherished institutions and ideals, from navigation rights to human rights, the importance of defending those rules and values is rising steadily. A united EU could have presented a serious check to Beijing’s growing assertiveness. We’ve already seen the alternative: When the U.S. expressed concerns last year about China’s plans to set up a rival to the World Bank, the Europeans stumbled over themselves to sign up, undermining any hope of extracting concessions from China’s leaders. Via valuewalk.com
E-commerce will adapt post-Brexit
E-commerce is an agile, global industry and if any sector knows anything about survival, it’s retail. Short-term there is uncertainty and there will be friction points as the UK negotiates its exit from the EU. There could be costs to business for the many changes and investment is very sensitive to risks and rewards.
In the short-term, it’s definitely not business as usual but over time the industry and the country will sort itself out and figure out ways to compete regardless of the environment. Disruption has a funny way of creating new opportunities.