Studies Examine European Web Trends

LONDON — A rash of Internet studies were published this month as the interest in such information among e-tailers — and their willingness to pay for it — showed no sign of diminishing.

Fields covered in the latest research included Internet sales to consumers, the growth of electronic marketplaces, the impact of customer relationship marketing on Web sales, the expansion of application service providers and the continued complacency among corporations and start-ups about the Web.

Taylor Nelson Sofres Interactive found Internet access growing strongly across Europe with some of the smaller Scandinavian and Benelux countries approaching US penetration rates.

Norway, Denmark and the Netherlands respectively had rates of 56 percent, 54 percent and 46 percent, compared to 58 percent for the US. Belgium, Germany, the UK and France recorded rates of more than 26 percent while the Czech Republic led Eastern Europe with 22 percent.

Penetration was key to future e-commerce development, said survey director Peter Cape. The deeper the penetration the greater the likelihood of increased online shopping.

Despite the relatively low penetration rate in France, French online shoppers led the survey in several key sectors: travel and leisure, toys and games, PC software, and stocks and mutual funds.

One explanation is the minitel, France's once pioneering but now sadly outdated online service. Designed as a telephone book installed in millions of households, it made French consumers comfortable buying other things online.

In the Netherlands, 40 percent of Internet shoppers bought music online, while Belgians bought the most books. Germans bought more electronics and cars on the Web than anybody else. Note that the German population base is much larger than that of the Benelux countries, which are Belgium, the Netherlands and Luxembourg.

“The one with the big potential is France,” Cape said. “Though very slow to start, it is coming along strongly. The dark horse will probably be the Mediterranean countries — Spain and Italy.”

Electronic marketplaces, new research shows, are the fastest growing segment of e-commerce and should account for more than half of all Web-based transactions by 2005.

Global business-to-business e-commerce already exceeds $140 billion a year, and a growing number of research firms agree on a staggering $7 trillion by 2004.

At present only 20 percent of European suppliers are online, but increasingly buyers are moving away from vendors that don't have a Web presence, putting pressure on them to get online.

One side effect, researchers note, is a decline in brand identity on platforms that operate on price only.

A study by Dataquest, Los Angeles, found that the global ASP industry is set for explosive growth over the next four years. Total sales were $1 billion last year and should hit $3.6 billion in 2000.

ASPs handle software for customers so they don't have to worry about installation and management and can access it from their desktops. Providers charge a fee for their end-to-end services.

The US and Canada accounted for 65 percent of ASP sales last year, a figure expected to drop to 45 percent in 2004 when sales should total $25.3 billion. Europe's share will grow from its current 20 percent to 32 percent.

Less encouraging is a survey conducted by PeopleSoft, a customer relationship solutions vendor, at the recent CRM 2000 conference. It found that 60 percent of respondents had failed to integrate any of their customer channels.

The failure, said Charles Grover, the company's European business development director, “spells danger to companies which need to share customer information across all departments in order to be successful.”

Finally, a study conducted by online research agency Protégé and the London School of Business found widespread complacency among European corporations and start-ups with businesses on the Web.

The study was based on a survey of 300 corporations, 110 start-ups and 50 Internet service providers in 11 European countries. Some 40 percent of those surveyed said they did not expect serious competition from one sector or the other.

“The idea that 40 percent of each group says that they are not scared of ever getting competition is really dumb,” said Nick Rosen, chairman at Protégé. “The complacency comes from people who don't really understand the business they're in and this should be a worry to them.”

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