Government hails boom in e-commerce

Official figures released on Wednesday show that online spending in the UK boomed in 2001.

According to the Office for National Statistics (ONS), which has published new results from its 2001 e-commerce survey, UK businesses -- excluding the financial sector -- sold £18.4bn of goods and services via the Internet in 2001. This is the equivalent of 1 percent of the non-financial sector's total sales throughout the year.

The ONS found that large companies enjoyed the bulk of the fruits of e-commerce. Firms that employed over 1,000 employees had online sales of £8.8bn. In contrast, firms employing fewer than 10 people achieved total online sales of just £1.4bn.

Almost two-thirds -- £11.8bn -- of this £18.4bn was business-to-business online sales, with online business-to-consumer e-commerce totalling around £6.6bn.

Firms employing fewer than 10 people were not included in the 2000 e-commerce survey. When excluded from the 2001 results, the ONS's figures show a 42 percent increase in online sales last year compared to 2000.

According to e-commerce minister Stephen Timms, this increase in online spending in 2001 is proof that even though the dot-com bubble has burst e-commerce has a bright future.

"These new figures show that e-commerce was not just the latest fad, but is becoming part of everyday business. Dot-com doom-mongers should eat their words," said Timms in a statement. "This massive increase in online sales means that businesses and consumers are exploiting the new opportunities and benefits that e-commerce offers," he added.

A Department of Trade and Industry (DTI) spokesman told ZDNet UK that one key message from the ONS figures is that it is important for businesses to understand how to benefit from e-commerce -- something the government's UK online for business initiative tries to help firms with.

"It's not just about hitting targets for the number of firms online, it's about creating a more sophisticated user, and working with businesses to find out what they want from e-commerce and helping them achieve it," the DTI spokesman explained.

The ONS excluded finance companies from the 2001 survey because it is reviewing how it captures e-commerce activity and turnover in this sector.

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