Published August 2014
Ethical Online Retailers
This guide is the latest in our series on Amazon alternatives, which help consumers avoid the companies that are avoiding tax.
In this guide you’ll find ratings of online stores that offer a variety of products, rather than ones that only sell one particular type of product, for example, just cosmetics. The companies we have covered were chosen by our readers.
Growth of the ethical market
The annual Ethical Consumer Markets Report reveals that demand for ethical consumer goods and services continues to defy recessionary pressures and grew by more than 12% in 2012, whilst the mainstream UK economy grew by just 0.2%. Total ethical spending in the UK is now worth £54 billion, an amount greater than that spent on cigarettes and alcohol combined.
With ethical markets now representing around 6% of overall UK consumer spending, it is a sector that continues to flourish. Nowhere is this more obvious than online, where there are many small retailers making ethical claims.
As we know, Amazon sadly dominates the online market. Its sales accounted for more than £1 in every £4 spent on entertainment during the last quarter of 2013 while, according to the Bookseller, they have cornered 79% of the ebook market.2
But there is now a real choice for consumers looking for more ethical options with more shops opening online seemingly every day.
For instance, we have recently seen the launch of Hive and Made Closer, two companies that see themselves as direct competitors with Amazon. The people at Hive have created a network of small, independent, bricks-and-mortar retailers that sell online through the Hive website. A percentage of every sale made on the site goes to a local retailer, and you can pick up in store if you wish, rather than getting the product delivered. Made Closer only stocks goods that are manufactured in the UK and Europe to help cut down on the carbon footprint of transportation. Labour rights in Europe are also better protected than elsewhere in the world.
Made Closer director, John Palaguta-Iles told us: “The only compliance we insist upon is that the goods are manufactured within this continent. Within our marketplace we are currently implementing filtering options that will include attributes such as recycled, upcycled and eco-credentials, where the customer has the power to filter for the attributes that interest them, not those that we dictate.”
A personal approach to trade
An ethical approach to supply chain management is part of what differentiates many of the companies on the table with their less ethical competitors. The personalisation of supply chains is a key feature of the smaller ethical retailers covered in this guide: many of the business owners meet and work with long term suppliers. This is certainly the case for many of the Fairtrade companies on the table such as Nkuku, Green Tulip, Evolution and Global Seesaw.
James from Evolution told us: “We have long-standing, close relationships with most of our suppliers that have been built up over years. A lot of these suppliers are quite small and some have grown out of the trade that we started with them, enabling them to gain new buyers through our recommendations.”
Direct links not always possible
This is, of course, not possible for massive high-street brands who instead rely on often weak criteria and auditing processes to ensure the rights of workers. It seems that, for the smaller retailers, scaling up may be difficult if they wish to maintain their high standards and not resort to the same tactics as many larger companies.
According to James from Evolution: “Obviously starting small and very idealistic and growing into a medium-sized business that now has a wholesale arm, 19 retail stores and an online store brings challenges in making sure we are keeping to our ethical principles. We have a committee and board made up of a majority of external members who make sure that we are constantly revisiting our work practices against our ethics.”
Charity Nicloas of Green Tulip concurs. “As the business grows there are definitely procedures and guides that we will put in place – I used to be a buyer for John Lewis so am used to having controls in place! But at this time I do all of the sourcing myself and therefore have full control over all the decisions,” she told us.
Perhaps this difficulty in scaling up is one reason why ethical retailing has so far failed to break out into the mainstream in the way we all hope it might; most of the companies on the table have a turnover under £8 million.
Who do you shop with online?
We asked readers to choose which ethical online stores they regularly use and would like us to cover.
Natural Collection and Ethical Superstore were the most popular shopping sites, both used regularly by around 13% of those who took part in the survey. Other stores that proved popular included Global Seesaw, Nigel’s Eco Store, John Lewis, the Co-op Group and New Internationalist.
The survey also showed that people are now using online shops more and more. Only a handful of people said that they only used local independent stores. Market research indicates that almost 90% of shopping in the UK is still carried out in physical stores but that the online market continues to grow apace. In 2013, £38.83 billion was spent online, 16% more than the previous year, and this level of growth is expected to continue. 
Good news on tax avoidance
Readers will be pleased to know that most of the companies covered in this guide score a best rating in our tax avoidance category. Only two score middle (Co-op and Spark Etail).
WWF has been criticised for greenwash by campaigners over its sponsorship deal with Coca Cola. The latter have given the conservation charity millions of dollars to run a joint project on water conservation, despite Coke’s poor record on environmental issues, specifically around water conservation in India. Through subsidiary Merchandise Mania, the US company Innerworkings operates WWF’s UK store under license. WWF approves the stock sold in the store.
Made Closer is an online market place that only retails products that are manufactured in the UK and Europe. It is owned by the Rainbow Chain, an ethical investment vehicle that supplies capital to new ethical businesses. The company gives two thirds of their net profits to charities and community projects.
Natural Collection and Ethical Superstore are both owned by Spark Etail, a subsidiary of Spark Response Limited. Spark Response is a logistics and distribution company that has a number of large corporate clients including Toys R Us. It has very little in the way of social reporting and at least two of its major shareholders are companies based in Jersey.
Windhorse Trust, the owner of Evolution, started as a wholesaler of gifts and houseware in 1980 and is a Buddhist organisation. It now has a chain of 18 Evolution stores whilst the wholesale side sells to small, independent gift shops and homeware stores, garden centres and larger chains such as Oxfam. The Trust donates profits to Triratna Buddhist Community projects in the UK and social projects in countries of supply.
New Internationalist runs a number of shops for various organisations including Amnesty, as well as having its own online store. The Amnesty brand picks up the scores of both companies on the score table.
Viva! and Animal Aid both use their profits to campaign around animal rights issues.
Ethical Wares stared out selling vegan shoes but now sells a range of ethical goods while retaining its vegan heritage.
Global Seesaw is a social enterprise that aims to create sustainable employment for women who have escaped forced prostitution. It sells a range of goods including homeware and jewellery.
Ecotopia is owned by the green energy company Ecotricity.
Cebra, Green Tulip, Nkuku, Fairtrade Warehouse are all smaller ethical gift shops.