 New PayPal report reveals that online spending is the only factor that will enable the British retail sector to grow by the end of 2011
 Almost one in four UK adults (24%) believe online shopping will become the norm and the high street will eventually die out
 By the end of 2011 shoppers are forecast to spend at least one in every 14 pounds online

Online shopping in Britain is set to boom from £8.9 billion to as much as £21.3 billion* in annual sales by the end of 2011, according to forecasts in a new report by online payment service PayPal**. This forecast 137 per cent growth in online spending means consumers in 2011 will spend the equivalent of approximately £430 for every UK adult – more than doubling the current annual online spending.

As experts debate when Britain will come out of recession, the PayPal UK Online Retail Report, conducted by Experian, predicts that 2011 will offer the first signs that UK retailing has emerged from recession. Online shopping is forecast to see its strongest year ever in 2011, and offline sales are predicted to begin to pick up once again.*** The report suggests that in the 18 months up to the end of 2010, online shopping is the only area of retailing likely to record sales growth. Without this forecast growth UK retailing could be on track to fall in value by an estimated £11.8 billion by the end of 2011, unless consumers choose to move any of their purchases to other channels.

PayPal’s report looks at the impact of the recession on shoppers and how shopping habits affect the economy. It forecasts that by the end of 2011, adults will dramatically change where and how they shop.

A new era of considered consumption
A mood of considered consumption is now well established amongst UK adults, with shoppers now scrutinising every purchase before committing to spending money. The need to make the most of their money is also driving consumers online where they believe they will find the best deals.

Nearly 4 in 10 online shoppers (8.7 million****) now believe that it is easier for them to budget by purchasing items online rather than the high street, while 47 per cent (10.8 million) believe their money goes further online. Meanwhile seven in ten consumers (33.6 million) say they gather as much information as possible before committing to a purchase, and 62 per cent of online shoppers (14.2 million) believe that the best deals are only available online.

Is this the end of the high street?
While millions will continue to visit UK high streets over the next few years, consumers are set to shift more of their shopping online. By the end of 2011 the forecast is that at least one in every 14 pounds spent shopping will be online, which is undoubtedly made easier now that 15 million***** homes in the UK have a broadband connection. Already 8.6 million UK adults shop online at least once a week and now nearly a quarter of adults (11.7 million) believe that shopping online will soon become the norm and high street shopping will eventually die out.

Carl Scheible, Managing Director of PayPal UK, said: “As we all try to make our budgets work harder during the recession it is hardly surprising many of us have headed online to seek a better deal. In fact almost nine million of us now shop online at least once a week. Online shops have already seen phenomenal growth and by the end of 2011, when the recession is expected to be over, we’ll be spending at least one in every 14 pounds online.”

Growing sectors
Over the last six months online shoppers have spent the most money per head in travel, financial services and other major purchases, like white goods and cars. These are all areas in which people want to shop around and compare prices, something the internet has revolutionised.

 Travel spending: 14.7.million online shoppers have spent an average of £940 each, and nearly 3 million adults think they will spend more in this sector before the end of the year.
 Financial services: 7.1 million online shoppers (31%) have done all or most of their financial services shopping online over the last six months. UK adults shopping in this online category<script type="text/javascript" src="http://econsultancy.com/javascripts/tiny_mce/themes/advanced/langs/en.js?1245840741"></script&gt; have spent an average of £764 each.
 Major purchases (e.g. white goods such as fridges and freezers): 9.7 million shoppers have spent an average of £495 each on major internet orders over the past six months.

Carl Scheible concluded: “The downturn has meant quick impulse buys may be a thing of the past as we now spend longer thinking about what we purchase. However, cost isn’t the only deciding factor when buying online; an easy and secure final check out is also important to shoppers.”

PayPal offers shoppers a faster and easier way to shop online without having to enter sensitive financial details each time, or even to share them with the online retailer. According to the Payments Council Report, PayPal is the UK’s favourite online payment service, with a 21% share of consumer internet payments. Almost one in every ten pounds spent online globally is currently sent via PayPal.

Notes to Editors
*Online shopping will grow by 137% from £8.9billion at the end of 2008 to £21.3billion by the end of 2011

** PayPal UK Online Retail Report compiled by Experian on behalf of PayPal, May 2009
Consumer research carried out by Research Now on behalf of Experian. Online interviews were conducted with a nationally representative cross-section of 1000 UK adults during April 2009.

*** All figures in the press release are based on Experian’s forecast figures set out in the Report.

**** Any population figures are based on the following:
- UK adult population: 48,772,161 [Source: Government Actuary’s Dept, 2006-based forecast for 2009]
- Adults with internet access: 73.7% [Source: Experian/nVision research, March 2009]
- Percentage of adults who have shopped online in past 6 months: 47% [Source: Experian/nVision research, March 2009]

***** Statistic on broadband usage taken from Ofcom, August 2008

About PayPal
PayPal is the faster, safer and easier way to pay and get paid online. PayPal stores your card and bank details, enabling you to pay online without entering your sensitive financial information every time you shop, and you can be confident that it is never shared with the seller. With more than 73 million active accounts in 190 markets and 19 currencies around the world, PayPal enables global ecommerce.

PayPal (Europe) S.àr.l. et Cie S.C.A. is a Luxembourg-based limited liability partnership, which is regulated by the Commission de Surveillance du Secteur Financier (‘CSSF') in Luxembourg. PayPal Inc is the ultimate parent of PayPal (Europe) S.àr.l. et Cie S.C.A. and is 100% owned by eBay Inc. PayPal Inc was set up in the US in December 1998 and acquired by eBay Inc in 2002.
• PayPal has 22 million accounts in the UK and is accepted on over 150,000 retailer across Europe
• PayPal’s 2008 full-year revenue was $2.38 billion, up 28 percent year over year
• PayPal’s net Total Payment Volume for 2008, the total value of transactions, was $60 billion, up 27 percent year over year
• PayPal’s Total Payment Volume in 2008 represented nearly 9 percent of global e-commerce and 15 percent of US e-commerce.(based on Forrester estimates of US e-commerce with the addition of eBay Inc. internal metrics totaling $256B)
More information about the company can be found at www.paypal.co.uk or www.paypal.co.uk/press

Published on: 11:00AM on 24th June 2009