UK mcommerce sales to rise

21 October 2011

LONDON: Mcommerce sales are set to witness rapid growth in the UK in the next decade, with brands in the grocery, electronics and personal care sectors all likely to benefit, a forecast has predicted.

Barclays Corporate, a specialist unit of the financial services provider Barclays, estimated consumer spending through mobile phones and tablets should reach £19.3bn by 2021, versus £1.3bn today.

In the next five years, retails sales made via these devices will expand by 55%, measured against increases of 8% for the web and 1.6% for bricks and mortar stores.

At present, mobile yields just a 0.5% of retail returns. By 2021, when total UK retail revenues are pegged to hit £390bn, mobile will take a 4.9% share.

"M-commerce is still a relatively niche channel," said Richard Lowe, head of retail and wholesale at Barclays Corporate. "However, with little new shop space coming into play the real growth opportunities lie on the virtual high street."

Currently, the grocery sector generates the greatest revenue from mcommerce, at £300m, largely thanks to the simplicity of making and changing orders, finalising payments and organising deliveries.

In ten years time, expenditure on products in the grocery category should top £5bn, meaning the segment retains the lead position overall.

Total spending on electricals, claiming second place in terms of value today, is expected to stand at £290m in 2011 and £2.1bn in 2021. Despite this, the sector will fall back in the rankings to fourth.

Revenues for personal care, incorporating haircare, beauty, dental and baby products, will leap from £63m to £3.1bn over the forecast period, enjoying the fastest growth rate as a result.

In its research, Barclays Corporate argued that direct spending was only "part of the picture", as 52% of shoppers already use their mobile phones during the purchase process.

Popular activities include conducting research, making price comparisons while browsing in stores and actually completing transactions.

Even though the importance of digital channels is rising, more than three-quarters of retail spending in the UK is still due to be taken by bricks and mortar outlets in 2021.

Lowe added: "The real value to be found in m-commerce is through its role as a multi-channel integrator and the indirect sales boost it generates by connecting physical stores with online."

Data sourced from Barclays Corporate; additional content by Warc staff