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Europe's Christmas e-spending to surge

Web retailers look set to enjoy a bumper season, and non-US e-commerce is likely to account for more than the US for the first time
Written by Graeme Wearden, Contributor

The technology downturn will not stop Europe's Internet users from shopping online in the run up to Christmas 2001, with analysts predicting a significant increase in spending compared to a year ago.

Europe's Internet users will spend over £6bn shopping online in the run-up to Christmas 2001, according to latest predictions from GartnerG2, part of analyst firm Gartner. This is a 40 percent rise on the same period last year, when around £4.32bn was spent online by European surfers.

These figures -- which exclude spending on travel, and on tickets for films and concerts -- indicate that the Web is becoming an increasingly important shopping channel, at a time when some economists fear that a drop in consumer spending could push countries such as the UK into recession.

In the US, analysts say online shopping is likely to get an extra boost from consumers' fears of going to crowded shopping malls, in the wake of recent terrorist activity.

While the US will still dominates the online shopping market, other parts of the world are experiencing faster growth rates. GartnerG2, forecasts that surfers living outside North America will make 53 percent of online sales in the fourth quarter of 2001. Last year, the split was 50-50.

In the last year, many traditional retailers have got their e-commerce activities up to speed, and GartnerG2 believes that European Internet users will reap the benefits this festive season. "In Europe, e-tailers continue to improve their Web site functionality by offering stock checking, order tracking and keeping their customers informed by email," said Gill Mander, business analyst at GartnerG2 Europe, in a statement. "More flexible delivery times and new delivery methods are also encouraging customers to buy online."

GartnerG2 believes that a total of £17.79bn will be spent online in the last quarter of the year, a 39 percent increase compared to £12.8bn in Q4 2000. Again, these figures exclude spending on travel and tickets.

Many observers believe that online retailers have learned from the mistakes of previous years. In the past, poor customer service and product delivery have left some consumers swearing to never again trust their precious Christmas shopping to inexperienced e-commerce vendors.

Rob Solomon, vice-president and general manager of Yahoo! Shopping, believes that retailers are now battle-hardened enough to offer a quality service. "They're pretty sophisticated at this point," Solomon told Reuters recently. "Two Christmas shopping seasons ago they didn't know what to expect at all, and now they've gone through three or four shopping seasons and they really know what to expect."

Solomon also said that Yahoo! has been advising merchants which items are likely to be most popular, so they have the opportunity to stock up in advance.

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