E-Christmas may not live up to promise

Will Santa be coming via your ISP this year? Not exactly

Despite several heady predictions, the UK may not be set to share the US' annual Christmas-inspired e-commerce explosion, experts say.

The US Research from accountancy firm Ernst & Young this week found that online shopping in the US will treble this year. The survey predicts that up to 67 percent of users will shop on the Net this Christmas, spending between $12bn (£7.4bn) and $15bn.

A survey by BMRB (British Market Research Bureau) predicts it will be an equally merry Christmas for UK e-tailers, with up to eight million people shopping online in the run-up to Christmas. (See Merry Christmas! E-commerce set to soar .) MORI is also getting ready for an e-Christmas, predicting 31 percent of UK users will be turning to the Net for Christmas presents this year.

"Santa has swapped his sleigh for a surfboard this year," predicts the director of online video retailer BlackStar.co.uk, Jeremy Glover, which commissioned the MORI survey. "This doesn't just represent a step up for Christmas cyber shopping compared to last year, it's a gigantic leap. 1999 will truly be Britain's first cyber Christmas," he said.

His optimism is echoed by marketing manager of Amazon.co.uk, Judith Catton. "We are very excited about Christmas. We are really convinced it will be the UK's first e-Christmas," she said. In order to attract customers to the site, Amazon will be producing a Christmas catalogue and updating its gift centre with festive goods.

But not everyone is convinced. Mikael Arnbjerg, analyst with research firm IDC, doesn't think an e-Christmas is in the offing: "There has been so much focus on e-Christmas. Last year it took off in the US and people are predicting it will repeat in Europe this year but I'm sceptical," he said.

Arnbjerg believes cultural differences between the US and Europe will keep Europeans on the high-street this Christmas. "The attitude to Christmas shopping in the US is different with a lot of Americans regarding it as a hassle, with relatives to buy for that live a long way away, et cetera. Whereas Europeans still enjoy the experience of Christmas shopping, combining it with a glass of mulled wine," he said.

A spokesman for Verdict, a retail research firm agrees the e-Christmas boom has been over-hyped. "Online retailers will be selling more than last year but its not going to be an e-Christmas," he said. According to Verdict's figures, online shopping accounted for just 0.2 percent of total retailer sales in 1998, rising to 2.5 percent by 2003. "Online shopping will be more significant by Christmas 2003, but it is still very small compared to high street sales," he said.

Arnbjerg is also not convinced UK e-tailers are ready for Christmas. "The largest retailers are still struggling with their infrastructure and I would advise anyone thinking of shopping online to shop early," he said, adding that there was still a lack of attractive retailers online. "The big players are people like Tesco and Dell and you don't usually do your Christmas shopping there."

Enterprise director of Ginger Media Group Steve Taylor believes the off-line world will play a key role in promoting e-Christmas. Virgin radio is launching an interactive shopping facility on its Web site, with music, computer games, clothes, mobile phones and other goods available from around ten e-tailers, including Orange, Boxman, BlackStar and Dressmart. The site will be heavily promoted on Virgin radio, which Taylor believes will be the key traffic driver.

"This Christmas is predicted to be the breakthrough point for e-commerce in the UK and we know our listeners are regular online shoppers. Virgin radio is well-place to exploit this boom because of its 20-44 affluent profile," he said.

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