Small-scale manufacturers in the South West are investing in their e-commerce capabilities – but continue to lag behind their counterparts in the East of England and London, new analysis reveals.

Some 38 per cent of firms across the region now sell goods online, which is the same as the UK average.

The East of England came out on top at 47 per cent, while London ranked second at 41 per cent. The Midlands was the worst-performing region, with just 27 per cent.

The figures were published in a new report, which also found that manufacturers who invest in their e-commerce capabilities enjoy average margins of 57 per cent.

In contrast, those who depend on traditional sales channels, achieve a 46 per cent margin.

Unleashed Software, whose supply chain management platform supports more than 4,000 businesses globally, compiled the figures from a sample of 385 UK manufacturers.

Analysts at the tech company, which is now part of The Access Group, collected 79,000 data points generated from firms’ day-to-day operations, including sales orders, EU exports and e-commerce activity.

Stephen Jones, regional manager at Unleashed Software, said:

“SMEs are the backbone of both the manufacturing industry and UK economy, so it’s reassuring that so many firms in the South West are future-proofing their business by investing in e-commerce technology. However, there’s still room for improvement if they want to catch-up with the top-performing regions.

“There was an explosion of e-commerce activity during the pandemic but while much of the focus was on the consumer sector, firms further down the supply chain also see it as a way to differentiate themselves in a competitive market. They know that business customers are as driven by convenience and competitive pricing as the average shopper.

“Our research found that e-commerce can significantly improve margins, which could help protect them from price hikes in materials and labour.”

Download your free copy of The Unleashed Software 2021 UK Manufacturing Report.