Published November 2000

Research: Future bright
for e-commerce

By Debra Malmos
Columnist

How will the Internet affect our lives and the way we do business in the years ahead? This question is fascinating to me. The explosive growth of the Internet is more than even the “experts” have been able to keep up with. With that in mind, here are some of the latest statistics and predictions.

While the art of estimating how many are online throughout the world is an inexact one at best, NUA Surveys’ educated guess from observing numerous published surveys is 359.8 million as of July 2000. There are now 51 million U.S. households online. That’s 45 percent more households than the 35 million predicted in April 1996 by Jupiter Communications.

The same 1996 survey predicted $14.2 billion in U.S. currency to be spent online in 2000, while the latest reports from the Gartner Group forecast $19.5 billion for this year’s fourth-quarter spending alone. According to Activmedia, total Internet-generated revenue by 2000 now is projected to be $377 billion, with that revenue projected to grow to $717 billion by 2001 and $1.23 trillion by 2002.

Online business-to-consumer sales in the United States this year already are up 75 percent on 1999 and are expected to surpass $29.3 billion, according to the Gartner Group. Total revenues in this sector last year were $16.8 billion, an increase of 157 percent on 1998.

Business-to-business e-commerce is set to become a $4.8 trillion market in the United States by 2004, up from $1.2 trillion in 2000. And it is projected that by 2003, 80 percent of all business-to-business transactions will be online, with $2 million changing hands every minute.

Who’s online is changing as well.

NUA Surveys reports that U.S. women are leading the way in terms of time online by 32 percent and representing 58 percent of all new online orders.

And, according to Media Metrix, older users also are becoming trendsetters as the fastest growing group in the U.S. Internet market. One-fifth of U.S. Internet users are between 45 and 64 years old, and more and more people in this age group are going online.

The Internet seems to be unlimited in its industry reach. Here are examples of a few marketing sectors that impact our lives:

• Banking — 22.8 million U.S. households will be using Internet banking services by 2004.
• Health industry — The future is bright for the online health industry, showing growth in the United States, with 40.9 million adults, or 54 percent of Internet users, using the Web for health care. About 14.6 million adults are shopping for health and beauty products on the Web, while 4.6 million of these have bought goods in this category. Patients also want more online interaction with their doctors: Just 3.7 million U.S. adults e-mail the doctor’s office, but 33.6 million said they would like to.
• Auto sales — The Internet will have a major impact on the value of the automotive market in the United States during the next five years. According to Gartner Group, the Internet influences half of all car purchases.
• Retail — Back-to-school shopping headed to the Internet in 2000. While the numbers are not yet in, the “Back-To-School e-Visory” report from NPD found that 28 percent of college students and 26 percent of parents of students buying items for the school term this year were expected to use the Internet for such purchases.
• Telecommunications — The global market for home networking equipment should exceed $600 million this year and $5.7 billion by 2004, according to Cahners InStat.
• Education — Reports show that the Internet is seen as a key information resource by 67.3 percent of respondents to a UCLA survey (books No. 1, newspapers No. 2, Internet No. 3). Within five years, the Internet has surpassed television and radio as an information resource, and it also is perceived to be a useful tool for furthering political knowledge.

Without a doubt, the days of wondering whether the Internet was here to stay, or whether it would represent a significant impact on our lives, are long gone. The Internet has simply become an essential part of doing business. Not only is it expanding marketing reach, it is dramatically cutting the costs of doing business. I believe a safe prediction to make is that in the years ahead there will be two kinds of businesses: businesses that are online and businesses that are out of business.

Debra L. Malmos AAP is president and CEO of iFULL Enterprises, an Internet services provider for access and hosting, Web site development and Internet marketing. She can be reached by phone at 360-321-6242. Her Web site is www.ifull.com.

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