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Online electrical market set for 37% growth

Published: 16 December 2014
Electrical products are increasingly being sourced online, both by contractors and end users, and as such the outlook for distribution via this type of channel remains positive.
Online electrical market set for 37% growth
That is the conclusion of a new report from AMA Research, which expects the internet electrical products market to continue to outperform electrical products overall.

This year, the online market is estimated to be worth around £400m, representing 3% of the overall electrical products market. AMA says this will increase by 37% between 2014 and 2018 to achieve a value of £549m.

The largest distribution channels within online sales are electrical wholesalers and specialist retailers, while merchants and DIY retailers are also significant players in this market. Key names include Screwfix, Rexel, YESSS, B&Q, Currys, Travis Perkins and a number of specialist ecommerce players, particularly those focusing on lighting and appliances.

AMA adds that while wholesalers are strong in electrical sales, their online capabilities are less well developed than certain other retailers'. Internet retailers' development of strong online sales platforms has allowed them to gain strength in lighting and appliances in particular, while wholesalers may be hindered by the complex discount systems in place within branches, which can be difficult to implement online.

Future growth, while positive, could be limited by the lack of transactional capabilities of some of the larger wholesalers and slow uptake by electrical contractors, who tend to remain loyal to local wholesaler branches and the discounts they offer.

The market for online distribution may also remain limited in certain product sectors, such as electrical accessories, says the report, where items are low value commodity products and distributors hold a constant, high stock level, providing less benefit to pre-ordering.

Growth may also be held back in some sectors by the technical or specialist installation requirements of certain products, leading to contractors retaining their position and often buying through traditional channels.


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