Consumers will spend £2.5 billion shopping on their mobiles in 2016, according to PayPal

Consumers will spend £2.5 billion shopping on their mobiles in 2016, according to PayPal

Online payments provider PayPal has commissioned a five-year forecast projecting the growth of mobile retail in the UK.

The report anticipates an explosion in mobile retail, predicting that the market will grow an average of 42% each year and be worth £2.5 billion by 2016, as a result of just over 14 million adults regularly shopping via their mobiles.

UK mobile retail sales currently represented 1.5% of overall UK online retail sales, or £438 million.

It also found that each mobile shopper currently spends an average £100 per year in 2011 and predicts that, by 2016, this will jump to £180 per year. This amounts to a compound average growth rate of 42.5% per year, fuelled by increasing numbers of mobile shoppers, a rise in smartphone use and increasing numbers of retailers developing easy to use mobile shopping experiences.

Retail sectors make mobile gains

The report therefore said mobile retail is a huge opportunity for retailers. It found the channel will show strong growth across all categories, but some retailer segments will race ahead of others: mobile ticketing and vouchers were first and second out of the top winners, with 47% and 44% gains up to 2016 respectively.

Excluding digital downloads, travel and financial services, the fashion sector, including clothing accessories and footwear, was also forecast to grow by 43.9% during the same period, followed by health and grocery (42%); books, music and videos (40%), and computing and appliances (39.6%).

Cameron McLean, PayPal UK general manager of merchant services, commented: “Mobile shopping is a growth market for UK retailers. The convenience of a connected device that can be used almost anywhere will lure increasing numbers of UK consumers into mobile buying. Our report shows that this consumer pull will be matched by a retailer push, with mobile-savvy retailers offering slick, sophisticated mobile experiences that rapidly become a key part of an overall multi-channel strategy.

He added that over a million PayPal UK customers have sent a payment on their mobile.

PayPal is developing its own rival to Google e-wallet initiative, while it recently featured as an integrated payment facility in a PizzaExpress app that saw PayPal brought to the UK High Street for the first time.