Net Users Worldwide Taking Commerce Online

In between dot-bomb jokes and pink-slip parties, it’s easy to forget that Internet use is still growing at a pretty good clip worldwide, and more users means more e-commerce transactions. Nearly 1 billion people, about 15 percent of the world’s population, will be using the Internet by 2005, International Data Corp. (IDC) found, and their use will fuel more than $5 trillion in Internet commerce. That represents a staggering 70 percent compound annual growth rate when compared to Internet spending of $354 billion in 2000.

“With the dot-com stock crash and U.S. economic doldrums so much in the news, it’s easy to lose sight of the explosive growth in Internet usage and commerce taking place below the surface,” said John Gantz, IDC’s chief research officer. “More than 100 million new users come onto the Web every year, and corporate volume purchasing over the Web is just getting cranked up. Add to that the proliferation of mobile phones and other Internet access devices that will allow people to access the Internet anytime, anywhere, and you have a scenario for explosive growth.”

With the much-publicized periods of hypergrowth over, and with the mature markets topping out, Internet use in the coming years will be widespread, as opposed to dominated by a single region. In 2000, the United States accounted for 34 percent of Internet users, with Europe at 29 percent, Asia-Pacific (excluding Japan) at 16 percent, Japan at 10 percent, and rest of world at 11 percent. But growth in the number of Internet users in Asia-Pacific and the rest of the world — especially in Latin American countries — will quickly outpace growth in more developed countries such as the United States, Canada and major European nations. By 2005, the balance of Internet users will completely shift, with Asia-Pacific rivaling Europe for the most Internet users while the United States slips to third place.

Similar shifts will occur among e-commerce. The United States currently accounts for just under half (46 percent) of total e-commerce. By 2005, however, its share will dip to 36 percent, according to IDC.

“The U.S. share in 2005 is actually more in line with its position in the offline economy, representing the shift in e-commerce from an emerging market to a more mainstream industry,” said Carol Glasheen, vice president of IDC’s Global Market Models and Demand-Side Research program. Growth in e-commerce in all regions will be healthy, but Asia-Pacific and Western Europe will grow the fastest between 2000 and 2005.

According to the First Quarter 2001 Global Internet Trends report from Nielsen//NetRatings, one in six European adults used the Internet to seek pricing or product information for products and services. One in 11 adults actually made an online purchase in the same period. Denmark, Sweden and Switzerland led the region in terms of Web-based browsing and purchasing, while Belgium/Luxembourg, Italy and Spain had relatively few people browsing or purchasing via the Internet.

Half of the Europeans who have browsed for information in the past six months have purchased, with browsing to purchase rates highest in Britain, Norway and Sweden. Italians and Spanish, on the other hand, are more reluctant than other Europeans to buy after having sought product information online. According to Nielsen//NetRatings, only Sweden comes close to the United States, where 74 percent of all Web surfers shop online each month and 30 percent buy online.

In the Asia-Pacific region, adults in Australia and New Zealand are most likely to use the Internet to seek information about products and services, with one in four adults turning to the Net. Purchasing online is also common in Australia and New Zealand, as well as South Korea. Only a very small proportion of people in Hong Kong, Taiwan and Singapore have bought goods and services online.

“If a South Korean browses the Internet for information on goods or services, he or she is much more likely to buy than is the case in other countries,” said Richard Goosey, chief of measurement science and analytics for ACNielsen “Three in five South Koreans who browse convert that investigation into a purchase. By contrast, only one-third of adults from Hong Kong or Taiwan who browse for information then go on to buy.”

Worldwide Online Browsing and Purchasing Behavior
Past six months, adults 16+
Nation Browsing for
Australia 24% 10%
Austria 25% 12%
Belgium/Luxembourg 12% 5%
Denmark 39% 16%
Finland 28% 11%
France 12% 6%
Germany 22% 11%
Hong Kong 13% 4%
Ireland 17% 8%
Italy 10% 3%
Netherlands 28% 11%
New Zealand 29% 12%
Norway 24% 14%
Singapore 19% 7%
South Korea 18% 11%
Spain 8% 3%
Sweden 46% 26%
Switzerland 32% 17%
Taiwan 13% 4%
UK 19% 11%
United States 74% 30%
Source: Nielsen//NetRatings

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