European E-Commerce Forecast To Rise By 40% In 2005

Commenting on the research, Jeffrey Grau, senior analyst at eMarketer and author of the report said: “E-commerce should continue to grow at a healthy pace this year and next throughout Western Europe, as more people go online more frequently, and at a greater bandwidth.”

Grau continued: “Each passing year will create a larger population of more-experienced web users, and if the US is a model, experience online leads to purchasing online.”

Germany and the UK are revealed by eMarketer to have some of the largest internet user populations in the world, with the combined online community of Germany, the UK, France, Italy and Spain forecast to reach 174.6 million, up from 131.5 million in 2004.

Research published at the beginning of the year by Millward Brown for the European Interactive Advertising Association revealed that over a quarter of UK consumers spent more than £1,000 online in 2004 (see UK Leads Europe In Online Spending).

The study showed that 30% of Britons purchased over 16 items online during last year, compared to just 19% across Europe.

In the US, internet users are predicted to increase to 188.5 million by 2008 compared to 170.1 million in 2004. Western Europe is catching up with the US, with eMarketer projecting an annual growth rate of 7.3%, while the US is forecast an annual growth rate of just 2.6%.

eMarketer reveals a three-tier digital divide in Western Europe. The Scandinavian countries and the Netherlands have the greatest internet penetration, with Sweden the leader at a rate of 74% in 2004. Central European countries follow, while the least advanced nations in terms of internet uptake are Italy and Spain.

In 2004, the internet penetration rate in the European Union was 48%, compared to a US rate of 61%. Overall, broadband uptake in Western European households is high and penetration rates are shown to quickly be approaching the US level.

According to Forrester Research, by 2009, the UK and Germany will represent 49.55% of online sales. France, Italy, Spain, Germany and the UK combined will account for a 76.2% share.

Grau attributes this growth to the maturing of the US retail e-commerce markets, resulting in many marketers beginning to target customers in faster growing foreign markets. He said: “Western Europe and the UK in particular are drawing a lot of interest because of cultural affinities and fewer language barriers.”

Online retail sales in the US are predicted to rise by almost 25% this year, with revenues forecast to increase to $109.6 billion, up from $89 billion in 2004, according to a recent study by Shop.org and conducted by Forrester Research (see US Online Retail To Rise By 25% In 2005).

The projections are in line with analyst eMarketer’s latest online retail estimates, predicting US online retail sales to reach $84.5 billion this year, a 22.1% increase from last year (see US Online Shopping To Reach $84.5 Billion In 2005).