Consumer spending on mobiles devices set to top £19bn by 2021

M-commerce: poised to grow by 55% over next five years

M-commerce: poised to grow by 55% over next five years

British consumers are set to spend £19.3bn year using their mobile phones and tablets within the next 10 years, compared with £1.3bn spent today, according to new research by Barclays Corporate. 

Food and groceries remain the most popular on-the-go mobile purchase; ringing up sales of nearly £300m for supermarkets this year, claim researchers. By 2021 this figure is expected to top £5bn. 

Electricals are the second most popular mobile purchase with £290m worth of products due to be purchased via a smart phone or tablet this year. By 2021 sales are predicted to reach £2.1bn but the purchase of electrical goods will fall back in the rankings to fourth position in value terms, said Barclays.

Personal care, which includes hair care, beauty, dental and baby products will enjoy the strongest growth with m-commerce sales rising from £63m in 2011 to £3.1bn in 10 years time, said researchers.

Richard Lowe, head of retail & wholesale at Barclays Corporate, said: “M-commerce is still a relatively niche channel accounting for 0.5% of total retail spend. However, with little new shop space coming into play the real growth opportunities lie on the virtual high street and those retailers which are prepared to invest will be at a significant advantage to the competition.”

During the next five years m-commerce will enjoy growth of 55%, the fastest of any retail channel, said Barclays. This compares to expected growth of 8% for online sales and 1.6% for in-store sales. Mail order is expected to shrink by 1.2%. The growth of mobile sales will, in part, be driven by increases in smart phone penetration and technological improvements such as 4G and Near Field Communications. Total 2021 retail sales are expected to be worth some £390bn – m-commerce will account for 4.9% of sales.

Direct spend is only part of the picture with more than half of all consumers (52%) already using their mobile devices at one or more stages of the purchasing process, whether it be to research before buying, making price comparisons while browsing in store or actually making a purchase.

For example Argos, Tesco, Asda and Next are among the 10 most visited websites via mobile, but despite increases in the amount of money migrating online, this does not mean the end of the traditional high street, said researchers. By 2021, more than three quarters of retail spend will still pass through tills. 

Lowe said: “Stores have been the mainstay of retail for centuries and this is not about to change, particularly for those purchases which require a high-level of customer interaction such as clothing and footwear. 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.”

M-commerce: fast facts 

  • £19.3bn – total m-commerce spend by 2021 (2011: £1.3b)
  • 55% – expected growth rate of m-commerce over the next five years
  • 52% – proportion of consumers already using mobile devices at one or more stages of the shopping process
  • Food and groceries – top on-the-go mobile purchase
  • £5bn – total m-commerce spend on food and groceries by 2021 (2011: £300m)
  • Baby, health and beauty products (personal care) – fastest growing sub-sector
  • £3.1bn – total m-commerce spend on personal care by 2021 (2011: £63m)