UK shoppers spend close to 5 billion pounds on low-cost international shipping platforms

UK shoppers are spending approximately 4.7 billion pounds a year on ultra-low-cost international shopping platforms such as Shein, Temu, and AliExpress, causing retailers to face increasing competition from these global competitors, according to research from Barclays and Retail Economics.

Close to half of all UK shoppers (49 percent) purchased items from these platforms in the last year, according to the Retail Resilience report, accounting for 5 percent of UK non-food online sales. 

How ultra-low-cost international platforms are changing UK retail

No longer viewed as niche disruptors, these Chinese shopping platforms are fundamentally changing consumer expectations when it comes to price, range, and delivery, making it more difficult for domestic retailers to keep pace and manage elevated costs, margin pressures, and changing demand.

Having the biggest impact among fashion, beauty, homeware, and general merchandise, many domestic retailers in these categories are facing challenges when it comes to price expectations. As shoppers continue to become increasingly accustomed to lower and lower prices, frequent discounting and huge online ranges, it becomes harder for them to protect margins while maintaining the same quality, service, consumer trust and compliance standards. 

To help overcome these struggles, many UK retailers are also turning to international markets to grow. “Ultra-low-cost international platforms are no longer a fringe trend – they’re reshaping how UK consumers think about price, choice and value,” said Karen Johnson, head of retail and wholesale at Barclays UK Corporate Bank, in a statement. “For domestic retailers, that raises the bar, but it also sharpens the focus on where they can compete and win.”

Cyber security & AI found to be leading risks for UK Retailers

In addition to pricing pressures, research also found that cyber and data security is now a leading risk for UK retailers. 64 percent of retail leaders surveyed rank it among their top three concerns for the year ahead, up from 58 percent last year, and 29 percent named it their single biggest risk, ahead of financial, operational, and strategic risks. 

UK retailers are responding accurately, with 37 percent of respondents stating they are highly equipped to handle a major incident, compared to 25 percent in 2025. Cyber risk is no longer seen as a technology issue, but a commercial one, capable of halting trading, disrupting operations, and undermining customer trust, and is being treated as such.

The research also found that the rise of consumer-facing AI is another key risk for retailers, as it shifts how shoppers discover, compare, and choose products. 78 percent of retail leaders surveyed stated that AI is already changing how consumers search, and 89 percent expect it to weaken traditional discovery channels in the next 12 to 18 months. UK retailers must compete not only for traffic, search rankings, and footfall, but also for visibility within AI-led recommendations.

Lastly, the research found that social commerce is gaining ground as a sales channel, especially among younger shoppers, with 30 percent of Gen Z consumers having purchased via platforms like TikTok Shop. Yet only 37 percent of retail leaders questioned say they are fully prepared to scale it, reflecting the operational complexity across content, creators, fulfilment, customer service, and demand planning.

“The risk environment facing retailers has become far more complex,” added Richard Lim, CEO of Retail Economics, in a statement. “The risk environment facing retailers has become far more complex. Heightened uncertainty around geopolitics, supply chains, cyber security, and AI is creating a much more testing backdrop for businesses already operating on tight margins.” 

“A disruption in one part of the business can quickly spill over into operations, customer trust, financial performance, and long-term competitiveness. That means resilience can no longer sit in a silo or just be one business function’s responsibility. The retailers best placed to navigate this environment will be those that build greater agility into how they operate, plan for a wider range of scenarios, and respond quickly when conditions change.”