A Year Ago: E-trade war brews as market reaches saturation

First published: Mon, 18 Oct 1999 16:02:19 GMT

Analyst predicts "anarchy in the UK", as online retailers compete for consumer eyeballs and wallets

Speaking at the Jupiter Consumer Online Forum in London Monday, Jupiter analyst Nick Jones believes a war between e-traders is brewing as the market becomes saturated with content.

"There will be blood on the floor as consolidation occurs," he said. Jones predicts MP3 Web sites will be among the first casualties, as will Internet bankers and women's interest sites.

Jones criticised UK Internet merchants for failing to capitalise on the opportunities of the Net. Describing service levels as "poor, very poor", Jones accused 53 percent of UK e-traders as being mute, for example, failing to respond to customer's enquiries or complaints.

UK traders are also failing to promote their Web presence as companies "dabble in the Internet to please shareholders", Jones said. According to Jupiter research, only 16 percent of UK e-traders distribute their services through the major portals.

Despite this, Jupiter predicts a healthy future for online shopping, with UK consumers parting with £2.7bn in 2003. While UK shoppers are beginning to prefer the Internet because of the ease with which they can comparison shop, German shoppers prefer to bank online rather than shop. Fifteen percent of German users cited banking as the main factor in going online, compared to 12 percent using the Net for shopping.

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