Net economy passes new milestone
Washington, January 14:
Americans spent over $100 billion shopping on the Internet in 2006, and growth in e-commerce is likely to extend its strong pace in the coming years, analysts say.
A report by research firm comScore Networks said online retail spending excluding travel reached $102.1 billion last year, a 24 per cent increase over 2005. A large chunk of that came in holiday season of November and December — $24.6 billion, up by 26 per cent.
“E-commerce is becoming more mainstream,” said Jeffrey Grau, senior analyst at the research firm eMarketer. “A larger segment of the population is buying online, and people are buying more things than they have in the past.” Investment firm Cow-en and Co calculated the 2006 sales figure at $108 billion and sees this growing to $225 billion by 2011. “We estimate that US e-commerce sales will grow by 20 per cent in 2007, driven by increasing adoption of broadband, lower prices in online channels, and the increased convenience of online shopping,” the Cowen report stated.
This would mean e-commerce would account for 4.7 per cent of total US retail sales in five years, up from 2.7 per cent at the end of 2006. “Retailers have to take it seriously, if they don’t they are really behind the boat,” Grau said. “There doesn’t seem to be any end in sight as to how large it will grow. It will continue to grow above the rate for offline retail.”
Grau said more consumers are comfortable with buying online, and are purchasing a wider range of goods such as jewellery, apparel, appliances and furniture. “At the same time retailers are becoming more savvy marketers,” he said.
Research by eMarketer suggests 22 per cent growth in online sales in 2007 to $132 billion, excluding travel.