Internet portals are in the best position to capitalize on the new market of e-tailers, according to a study by Keenan Vision. Software vendors, networking companies, and ISPs will also capture pieces of the market.
Only portals can offer a complete stack of e-commerce services, the study found. Portals are already setting up online shopping sites that allow merchants to set up shop quickly and easily, the study found. These sites give merchants the opportunity to use the marketing of portals and give portals a share of sales and advertising from the merchant.
The number of e-tailers on the Web will grow from 17,500 in 1998 to 45,000 by the end of 1999, according to the Keenan Vision study. This number will grow to 215,000 in 2001 and 400,000 in 2003, the study found.
According to Keenan Vision founder Vernon Keenan, e-tailers are drawn to the Web by the promise of reaching more customers, and because their competition is online.
“Our study found some unconventional wisdom in the e-merchant story, such as the fact the portal sites will assume a leadership role in marketing e-merchant services to small businesses,” Keenan said.
The Keenan Vision study also found that banks, credit card companies, and other financial institutions will look aggressively to partner with portals in ways that allow them to provide services to the growing class of e-merchants and online buyers.