eCommerce Tips & Trends

How Brexit Could Affect International eCommerce

Brexit may mark a sea change in how UK-based merchants do business. Learn about the implications of Brexit for eCommerce here.
How Brexit Could Affect International eCommerce
Sanchi Agarwal

By Sanchi Agarwal


January 23, 2019

Unpredictability over trade agreements with the UK has seeped in ever since the majority of Britons voted for Brexit in June 2016.

The UK Prime Minister, Theresa May, pushed her plan for her country's withdrawal, which was agreed to by the EU. However, when it was presented to Britain's Parliament on January 15, 2019, it was voted down by a huge margin.

Some believe Ms. May's plan could've helped the UK, especially in the free trade aspect. Her proposal promised that the UK can continue to ship goods freely overseas without any duties or tariffs (just like Switzerland, Norway, and Iceland who are also part of this agreement with the EU, called the European Economic Area). There would've been a possibility of additional paperwork that might be needed in the shipping industry, but that would've been inevitable regardless.

Tensions continue to loom since Ms. May was unsuccessful in getting her deal agreed upon. Back up plans are currently being proposed, but there is a possibility that none of them will be approved. If no agreement is made, the UK might have to leave the EU without a deal (also known as a "no-deal" Brexit).

All of this makes us wonder about what will happen with international eCommerce post-Brexit. In this post, we’d like to discuss potential events that could occur after March 29, to help you think about what you'd like to do moving forward.

The Potential Impact of Brexit on...

UK Businesses

Possible Pound Depreciation - In the short term after Brexit, it would be hard to stabilize the depreciating value of pound. UK shipping companies would benefit from rising British exports due to affordability of British products internationally. This could help the economy cover up its trade volume deficit marginally… but will this negatively cost the economy to revive its pound value in the long term?

Possible Increase in Taxes / Tariffs - EU member states currently make up for 45% of British exports. However, due to imposition of tariffs now, EU customers might turn away from British products. Depending on the withdrawal terms, slower delivery times and higher costs could discourage EU customers further from buying anything that is British. On the other hand, UK consumers would bear the tariffs on products coming in from the EU countries.

The UK Could Face a Skill Shortage - Before Brexit, UK eCommerce businesses are able to freely contract workers in other Eurozones. However, visa requirements would now make this difficult and outsourcing important business functions like multilingual customer service could be challenging.

The UK Could Lose its Long-Established Appeal - The UK port is the one and only entry point for many businesses setting up their base in Europe. But after Brexit, Germany and Netherlands could rise up to that position due to their skilled workforce and central location within Europe. Other countries like China might benefit too, as UK consumers shift their focus from EU to other foreign markets.

Global Parties

Global eCommerce Could Companies Lose Out - Depreciation of the pound would mean expensive imports into the UK. This may affect the bottom line for global eCommerce companies selling into the UK. Localization might persist (UK consumers buying from UK companies only).

Global Consumers Could Lose Trust in British Products - EU’s pan-European certificate for online shops / marketplaces would not be applied to the UK anymore. Local and global consumers could potentially lose their trust in British products due to this.


The above are only possibilities and speculation of what Brexit could mean for the UK's international trade and their economy.

As this is an ongoing and changing situation, we'll be sure to keep you posted on any tax, duty, and import changes that occur.

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