ECommerce and How Big is ECommerce?....Really?
You simply cannot read a US newspaper today without stumbling across the word
ECommerce". ECommerce is being tossed around in all business circles these days. Corporate CEOs want it, small business merchants want it, and customers want it. So what is ECommerce? and how big is it...really?
ECommerce is short for
Electronic Commerce. ECommerce is simply the idea of replacing physical business transactions with electronic business transactions using the Internet. ECommerce cuts through boundaries such as time and geography to put store owners and customers into a virtual contact with one another. A key ingredient of ECommerce is the ability to take orders and receive payments through an electronic storefront. Philosophically, ECommerce is about openness, connectivity, and integration between businesses and customers.
From the store owner's perspective, ECommerce provides a way to instantly satisfy demand for products, services, and information of each customer individually. From the customer's perspective ECommerce offers convenience, variety, cost savings, and anonymity. Ultimately, ECommerce shifts the power from the merchant to the consumer. One new marketing slogan says it all about this power shift - "Shop naked!
ECommerce also provides a way for the merchant to connect his customers, vendors, suppliers and employees all over the world. He can enable his business or organization to reach an infinite number of customers over the Web, seeking out potential markets that were once outside the traditional boundaries of his business.
The Size of Ecommerce
A new industry report by ActivMedia projects that global ECommerce revenues will reach $115 billion this year, and will exceed $1.8 trillion by 2004. ActivMedia reports revenue growth rates of 150 percent -- up from 72 percent -- are forecast for 2000 and 138 percent for 2001 as online buyers rely on the Internet for a wider range of goods and services. The report also stated these findings:
The following internet statistics and forecasts were collected during the month of December 2001. These statistics can be useful to our business community for planning their future marketing plans.
|US Online users forecast (millions)
2002 - 2006
|2006||-||210.8||US Online retail revenue projection ($billion)|
2002 - 2006
|Specialty Retail Stores ||213 %|
|Legal Services ||185 %|
|Computer and Data Processing Services|| 96 %|
|Financial Institutions || 91 %|
|Records, Audio Tapes, Cassettes & CDs|| 39 %|
|Professional Services || 70 %||
|Charities ||215 %|
|Computers ||187 %|
|Medical Services || 63 %|
|Health and Beauty || 56 %|
|Food and Drink || 49 %|
|Insurance || 47 %|
IDC Research predicts that 183 million people will buy online by 2003, representing 36 percent of the total Web population. This compares to 31 million in 1998. Non-US users will account for 65 percent of the total user population by 2003, generating just over half of all ECommerce revenue by that time. In contrast, in 1998, non-US users accounted for 56% of the world Web traffic but generated just 26% of the total ECommerce revenue.
The main factors that will drive international ECommerce growth over the coming years will be the dramatic increase in the number of people buying online, the increase in the size of online transactions, and the acceptance of the Web as an important business vehicle, according to the report.
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