Online shopping is set to double its share of the retail market to 10.4% by 2012, new research suggests, making it “the silver lining in the economic crisis”. By then it will be worth more than £30bn a year and £1 in every £10 will be spent online.
But while e-commerce is expected to grow by a rapid 36%, or £8bn, in the next 18 months, in-store sales are forecast to grow by just 1%, or £3.3bn.
Those are the key findings of the second annual PayPal Online Retail Report, carried out by Experian. If its forecasts come true, online retail will be worth £30.6bn by the end of 2012.
Already internet spending has tripled as a share of total retail spend since the end of 2006, the report found. And it’s expected to grow by at least 22% a year in 2010 and 18% in 2011. At the same time, overall retail sales are expected to rise by 0.4% this year and 1.6% in 2011.
Carl Scheible, managing director of PayPal UK, says: “Online retail is booming even in the current economic uncertainty because shoppers turn to the internet when they are trying to be thrifty. Two-thirds of online shoppers believe their money goes further online compared to less than half who believed it last year, an increase of 8.5m people.
“The success of online retail really is the silver lining in the economic crisis.”
He adds: “The growth of online shopping is not just about saving money it’s also about saving time. In the last year we’ve seen an 11% increase in the number of online shoppers who say buying online does just that.”