Ecommerce start-ups surged during lockdown: Royal Mail – Industry

Nearly 16,000 new ecommerce businesses were set up during lockdown, the Royal Mail has found. They were the largest single group, as a record 315,000 companies were set up between March and July this year – 7% more than in the same period last year.

Company start-ups in the second quarter alone – a shorter period, which runs from April to June and saw 176,000 companies incorporated – were the highest of any second quarter since records began, the delivery company said in new analysis published today.

Ecommerce accounted for the largest single group, followed by businesses in the services sector, notably non-financial management consultancies (11,000) and the property sector. The Royal Mail suggests that the unique circumstances of the Covid-19 pandemic and lockdown saw small businesses and entrepreneurs adapt quickly as restricted shoppers turned online to buy. New business models that cater to growing home deliveries have also emerged.

The findings are mirrored in the Royal Mail’s own experience. It saw parcel volumes rise by 34% – or 117m more parcels – during lockdown, while revenue rose by 33.1% in the five months to August 31, driven by ecommerce and direct to consumer sales. It is now adding four new automated parcel sorting machines, capable of sorting up to 10,000 parcels an hour, to an existing 20 machines that will speed up processing in its mail centres. It has also introduced abut 1,400 new parcel postboxes.

Nick Landon, chief commercial officer at Royal Mail, said: “It is very promising to see this level of new business creation. The narrative for businesses during and post lockdown is not one purely of survival, but also of resilience, resurgence, and growth. The ecommerce sector has seen huge growth this year and at Royal Mail we understand the importance of our parcel services in keeping the UK connected – particularly during such unprecedented times.”