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Online retail sales up 27 percent

E-tail sales rise to $13.3 billion during the third quarter of 2003 and are expected gain even more traction during the holidays.

Online retail sales rose by 27 percent during the third quarter of 2003, according to a report released Friday by the U.S. Department of Commerce.

E-tail sales rose to $13.3 billion during the quarter, compared with $10.5 billion for the same period last year. While significant, the growth still lags behind the sector's performance several years ago, when the market was growing at quarterly rates as high as 68 percent.

However, the third-quarter revenue total represents the largest figure reported during that period since the department began tracking retail e-commerce sales in 1999.

Third-quarter 2003 e-commerce revenue accounted for 1.5 percent of $872.5 billion in total retail sales for the period, compared with 1.3 percent of $822.1 billion in sales for the same period a year ago. The third quarter outpaced first- and second-quarter online retail sales, which were $11.9 billion and $12.5 billion, respectively. The fourth quarter has been the strongest period for retail performance, both online and offline, for the past three years, driven largely by holiday sales.

One area of the market that continues to grow rapidly is the online ticket sales segment. Earlier this month, InterActiveCorp reported that more than 50 percent of the $1.1 billion in tickets sold by the company's Ticketmaster division during the third quarter were acquired via the Web.

Industry watchers are predicting that the fourth quarter of 2003 will deliver the greatest amount of online retail sales for the calendar year. A report published earlier this month by Jupiter Research predicted that holiday retail e-commerce revenue will reach $17 billion, a 21 percent jump over the same period in 2002.

According to the research, almost 40 percent of Internet users are planning to do some or all of their holiday shopping online, an increase of 18 percent from last year. Among the catalysts for market growth listed by Jupiter was increasing confidence among consumers concerning the use of credit cards over the Web.