Points North: Al Mackin, CEO and co-founder of Formisimo

David Prior's picture
by David Prior


Each Friday, Points North gives a senior media figure a platform to air their views on a topical or relevant issue.

This week it’s Al Mackin, CEO and co-founder of Formisimo, on the impact of e-commerce and the opportunities for SMEs in the North.

Last week, the ONS published a report about e-commerce in the UK – and whilst the figures came from 2012, they’re still eye-watering. E-commerce accounts for 18% of the UK’s overall turnover, contributing £164bn in website sales.

Northern companies are among those contributing to the significant income being generated by websites.

A growing number of online businesses with £10m-plus turnover have emerged in the region, ranging from web-centred brands such as AO, BooHoo and Missguided, to retailers that maintain presences both on and offline, like ShopDirect, KitBag and Better Bathrooms. Beyond this, there is a small army of web-based SMEs that are just a successful quarter away from a seven-figure turnover.

Al-MackinThe companies that are drawing e-commerce revenue into the region are creating opportunities far beyond their own walls. These growing businesses need high-quality staff and access to suppliers – offering everything from market-leading advertising to reliable transport and delivery services – to remain competitive.

While being near to a successful internet-only company doesn’t guarantee a financial windfall, employment and supplier relationships help income trickle down into the North's economy.

Recruitment companies, marketing firms and transport suppliers are typically among the first to benefit, but ultimately, the entire region benefits from the increased revenue generated by the growth of e-commerce.

Additionally, talented graduates and apprentices sourced from local universities and schools, increase the number of skilled employees available and encourage entrepreneurialism where talent or job opportunities are lacking. One MediaCity business has 200 young web developers, soon to rise to 400, all future employees of the e-commerce sector.

Northern companies who thrive online are both an immediate blessing, and a long-term concern. Success draws suitors, and an acquisition by a company outside of the region will eventually erode the use of local suppliers. However, though less money will flow into the local economy once an online business is acquired, the region will be blessed with something else it desperately needs – online super angels.

Cash-rich entrepreneurs – such as Oliver Cookson who sold MyProtein for £60m, then later set up GoNutrition in Manchester – will likely give back to the local economy, either by building more businesses or supporting the next wave of start-ups.

With regional firms achieving international success within months, instead of years, the greatest challenge for the North will be growing new, market-leading e-commerce businesses faster than the successful ones can be acquired.

Al Mackin is CEO and co-founder of Formisimo, as well as founder and chairman of theEword.

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