Arise Sir Start-up

Lockdown fuels rise in start-ups as entrepreneurial Brits driver e-commerce boom

Lockdown has had the unexpected side effect of giving rise to a leap in the number of new companies being formed in the UK, according to our latest study.

During the lockdown period from March to July, 315,000 companies were incorporated in the UK - a seven per cent increase compared to the same period in 2019.

In the second quarter of 2020 from April to June, 176,000 start-ups were recorded, the highest for any second quarter on record, exceeding the previous record high set in 2016.

The data suggests that the unique circumstances prompted by the pandemic and the associated lockdown have prompted a spike in entrepreneurial activity. Many entrepreneurs and small businesses have been quick to adapt to Covid-19 restrictions, which have resulted in more consumers shopping online. Fleet-of-foot entrepreneurs have reacted by creating new business models that cater to growing numbers of home deliveries.

The e-commerce boom

The highest rates of new business creation have been within e-commerce, followed by the services sector, and property.

Leading the pack, UK entrepreneurs have been quick to move into e-commerce to capitalise on consumers’ growing embrace of online shopping and preference for home deliveries. Nearly 16,000 e-commerce businesses were created between March and July 2020. The e-commerce boom reflects the changing patterns of consumer behaviour, including the way we shop, that were largely enforced by lockdown measures. Non-financial management consultancy activities are the next best performer, seeing just over 11,000 new incorporations during the same time period.

During lockdown, our research revealed more than half (53 per cent) of UK adults felt that receiving parcels had become more important and more than a third (36 per cent) said receiving a parcel was the highlight of their day.


And the growth in lockdown start-ups appears to have taken place across the UK. Many postcodes saw considerable growth in the number of businesses incorporated during the pandemic. Between March and July 2020, 26 postcodes saw the number of incorporations at least double, with growth spread across different regions of the UK.

Nick Landon, chief commercial officer, said: ‘It is 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 e-commerce sector has experienced a real boom and at Royal Mail we understand the importance of our postal service in keeping the UK connected – particularly during such unprecedented times. 77 per cent of online shoppers trust Royal Mail to deliver more than anyone else. In uncertain times, a familiar, reliable service matters.’

16 Oct 2020