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Global online sales set to reach US$19.5 billion in 2000

Worldwide online holiday sales are forecast to reach US$19.5 billion in 2000, an 85 percent increase over last year's revenue, according to Gartner Group, Inc.

Online holiday sales for Asia Pacific are projected to increase 91 percent this year.

SINGAPORE - Internet retailers must prepare for early holiday shoppers this year, as worldwide online holiday sales are forecast to reach US$19.5 billion in 2000, an 85 percent increase over last year's revenue, according to Gartner Group, Inc. In 1999, Internet holiday sales totaled US$10.5 billion.

"Explosive Internet access growth over the last two years, particularly in regions beyond North America, means that many Internet users are now familiar enough with the medium to make online purchases," said Lane Leskela, Gartner's e-business principal analyst.

"We've witnessed strong demand for Western goods by the affluent in Asia and support by governments, retail banks, card companies and national portals to 'Webify' their countries."

North America will continue to account for more than half of online holiday sales this year (see Table 1), but the other regions are gaining market share.

Europe and Asia/Pacific are projected to grow 96 and 91 percent respectively, while Japan and the rest of the world online holiday shopping sales this year will increase more than 180 percent of 200 percent over 1999 revenue.
Table 1
Worldwide Internet retailing sales forecast estimate for fourth quarter 2000 (billions of U.S. dollars)



 
Region 4Q '00 Revenue 4Q '00 Market Share (%) 4Q '99 Revenue 4Q '99 Market Share (%) Growth (%)
North America 10.72 54.9 6.31 59.9 69.9
Europe 5.38 27.5 2.74 26.0 96.4
Asia Pacific 1.60 8.2 0.84 8.0 90.5
Japan 1.31 6.7 0.46 4.4 184.8
Rest of the world 0.52 2.7 0.18 1.7 188.9
Total 19.53 100.0 10.53 100.0 85.5

During the holiday season last year, many consumers were making their first purchase over the Internet. Many Internet retailers were not prepared for the large number of shoppers, so some Web sites had difficulties fulfilling orders in time for the holidays.

Gartner analysts said Internet users and Internet retailers both learned from lessons last year to better prepare for this holiday season.

"In an effort to avoid stock outages and long delivery times, consumers are likely to shop earlier as they shop more in 2000. Retailers have learned their lesson too. They have spent the year implementing real-time inventory systems and are motivating consumers to shop earlier in an effort to deliver the best shopping experience possible," added Leskela.

Gartner analysts will provide additional insight into the Internet retailing market during Gartner's Symposium/ITxpo 2000, October 24-27, Brisbane, Australia.