Studies: Everything's E-OK

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While venture capital financiers seem to be shying away from e-commerce investments, consumers aren't. Dollars drawn from Internet retail sites will continue to grow, further cementing the Internet into our economy, according to a pair of recent studies.


The first study, conducted by the Gartner Group, Stamford, CT, estimated that Internet retailing will top $29.3 billion this year, up from $16.8 billion last year. Online retail currently makes up 1 percent of overall consumer spending, but by 2004 this number will most likely grow to 5 percent to 7 percent, according to the Gartner Group's North American Internet retailing survey.


Through 2004, the study projected that the computer/hardware/software/consumer electronics segment will lead the online retailing pack. This segment is expected to grow to $59.7 billion in 2004 from $7.5 billion in 1999.


Banking and financial services are expected to almost quadruple to $12.3 billion in 2004, from $3.6 billion in 1999. Online sales of entertainment and home consumables are also expected to soar through 2004.


In a related study, BizRate.com examined online retail on a quarterly basis. It found that first quarter 2000 e-commerce sales grew 12 percent to $8.15 billion from previous quarter sales of $7.25 billion. Second quarter sales were expected to grow an additional 25 percent, to $10.2 billion.


The entertainment and holiday categories have seen the most dramatic changes on a quarter-by-quarter basis, according to BizRate, Los Angeles. Entertainment sites saw an increase of 35 percent from fourth quarter 1999 to first quarter 2000. Computer goods grew 30 percent, and gifts and flowers grew 14 percent.


On the downside, toys and hobbies decreased 72 percent, and food and wine shrank 60 percent.
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