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Growing Net usage fuels e-commerce

With worldwide Net usage booming, online commerce is expected to gross $100 billion by the turn of the century.

Online commerce is expected to gross $100 billion by the turn of the century, fueled by the Net's explosive growth, according to a survey released today by International Data Corporation /LINK's.

Household Net usage also is booming--not only the United States, but also in Europe and Asia-Pacific countries, the report shows. The report says the number of Web users will grow from 16.1 million in 1995 to 163.0 million by 2000.

"Especially interesting was the amount of Internet usage in homes in certain Asia-Pacific countries, where access often costs more and fewer PCs are equipped with modems," Richard Zwetchkenbaum, director of Global New Media Consumer Research at IDC/LINK said in a statement. "Japan, for instance, had a higher utilization rate than the U.S.--more than 18 percent of households with PCs were using them to access the Internet."

Online commerce will expand as well, but could be stunted by inefficient online services, especially in the United States, the report warns.

In 1996 online commerce grossed around $3 billion, with more than one-third of those purchases completed on the Web itself. In the United States, the percentage of users who make purchases online will grow from 29 percent in 1995 to 45 percent in 2000.

The findings are based on telephone and in-home interviews with 18,500 households in 16 countries, including the United States, France, Germany, Italy, Netherlands, Sweden, United Kingdom, Australia, China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, and Taiwan.

IDC/LINK, a division of the international information technology research firm IDC, concluded the research November. IDC/LINK analyzes the home-computing market and emerging technologies.

As more people get online, commerce over the Net will steadily increase internationally, the report states. For example, in Western Europe, 34 percent of households that are online said they used the Internet to purchase goods and services. In Japan, 17 percent said they shop online. In the United States, 22 percent of Net users currently buy goods and services online.

IDC's research indicates that one-third of transactions are completed over the Web (as opposed to fax or phone). By 2000, that fraction should be much greater than two-thirds.

But consumers will remain skeptical of the Net's reliability for commerce if spotty service from companies like America Online, for example, can't improve access and technical support. Consumers acceptance of the Net is still minor in comparison to the telephone, television, and the radio.