Q1 E-Commerce Spending Matches Holiday Season

Consumers spent an estimated $7 billion online in the first quarter of 2000, the same amount they spent in the fourth quarter of 1999, according to the e.commercePulse survey by Harris Interactive.

An additional estimated $13.8 billion were spent by phone and in stores as a result of online shopping, a drop of more than $2 billion from Q4. Although total revenues stayed the same, the prevalence of online buying spread, as the estimated number of monthly online buyers rose 15 percent, from 23.3 million to 26.8 million.

The hot holiday markets that carried Q4 — toys, clothing/apparel, and electronics — all saw revenue drop during the first quarter, while auctions, health/beauty, and travel services showed strong improvement. eBay continued to build its dominance in auctions and extended its influence to other markets, while Amazon’s revenue shares dipped across the board.

E-Commerce Revenue by Category
Q1 2000
Travel services $2 b
Computer hardware/peripherals $852 m
Clothing apparel $619 m
Auction $644 m
Books $461 m
Electronics $287 m
Music/video $340 m
Computer software $257 m
Flowers/gifts/cards $195 m
Health & Beauty $153 m
Toys $147 m
Home & Garden $82 m
Fitness & Sports equipment $69 m
Source: Harris Interactive e.commercePulse

“Clothing, electronics, and especially toys all saw their online sales more double during the holiday season, but fall in Q1,” said Harris Interactive Director of E.Commerce Research Lori Iventosch-James. “These drops are not just a function of decreased post-holiday demand; they illustrate that online retailers face the same challenges traditional retailers face in sustaining themselves at other times of the year.”

Toy sites as a whole saw the greatest drop in quarterly revenues, 61 percent from $379 million to $147 million. Electronics revenue fell 24 percent to $287 million and revenues for clothing/apparel dipped 17 percent to $619 million. Auction sites, health and beauty sites, and sites that sell travel services showed the greatest increase in quarterly revenues. Largely on the continuing success of eBay, an estimated $644 million was spent online at auction sites in Q1 up 33 percent from the fourth quarter. Health and beauty revenues grew by 28 percent to $153 million and consumers spent an estimated $2 billion at online Travel Services sites in Q1, an increase of 25 percent from Q4.

The “veterans” of e-commerce — computers, books, and music/videos — all showed steady growth in the first quarter. Revenues for computer hardware/peripherals climbed more than $100 million, or 14 percent, to $852 million, and those for computer software rose 10 percent to $257 million. Book revenues jumped 12 percent to $461 million, while music/video revenues were up 8 percent to $340 million. Consumers also spent $195 million on online flowers, gifts, and cards and $82 million on home and garden items. Revenues from fitness and sports equipment remained steady at $69 million.

eBay posted very strong numbers in the first quarter, and not just in the auctions category. It expanded its leading transaction share in auctions and also emerged as the top site for online electronics, was third in toys, and was fourth in flowers/gifts/cards.

“eBay’s performance beyond the Auction space is one of the biggest stories of the quarter,” said Iventosch-James. “Consumers are now thinking of eBay as a full-service e-commerce site.”

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