British businesses are being urged to expand into the online marketplace over the course of the New Year, in a bid to broaden their horizons and increase sales.

The news comes after an important study carried out by Capital Economics in collaboration with Amazon estimated that small and medium-sized enterprises (SMEs) operating in the retail sector could see substantially higher sales this year if they took full advantage of e-commerce.

The research, which was published towards the end of December, estimated that tech-savvy firms are likely to enjoy faster revenue growth and faster jobs growth this year if they follow through with plans to expand online.

It found that currently, only 64 per cent of SMEs trade their goods and services online – a number which is set to grow to 88 per cent this year.

By analysing data from previous years, the report forecast that those firms who expand into the online marketplaces will enjoy substantially higher sales growth by the end of the year.

It estimated that those who embrace e-commerce will welcome a 1.9 per cent increase in sales, in comparison with only a 0.6 per cent rise among firms with no online presence.

Doug Gurr, of Amazon, said: “The contrast in performance between businesses who use e-commerce and those that don’t is significant, so it’s reassuring for the UK economy to see small businesses investing in digital.

“The impact digital tools and services have on a small business cannot be underestimated. They can improve productivity, boost revenue growth and provide real export power for SMEs.”