Europe could leapfrog US in e-commerce

"Will Europe leapfrog the US in electronic commerce?" This was the question posed by Frank Gens of IDC at the IDC European Forum in Paris this morning. Last year his report was negative, with Europe reckoned to be two years behind the US. Now it is a matter of months behind, and growing faster then in the US. Within Europe, there are marked differences. Gens showed data indicating that France lags in terms of both Internet users and purchasers, whereas the Nordic countries were the leaders in home Internet use. Highest sales were in Germany, with the UK not far behind. The most surprising finding was that although few Italians use the Internet, those who do were very enthusiastic spenders online, he said. Although e-commerce was generally not profitable at present -- costs were $17 billion/year whereas sales were only $32 billion/year -- he forecast that by 2002 costs would be $167 billion and sales $426 billion. Business-to-business sales represented 66 per cent of online sales at present, and Gens estimated this would increase to 79 per cent, which contrasts with the world economy, where 61 per cent of sales are to consumers. In the next 12 months, a critical milestone will be passed, Gens noted: annual e-commerce sales will exceed Bill Gates' net worth. Gens also forecast if not the death of the PC era, at least strong competition from Internet devices. In the US, in 1997, 4 per cent of Internet access was from appliances, but by 2002 this is forecast to increase to 43 per cent. So far as preferred suppliers were concerned, there were consderable differences between Europe and the US, with the uncommited being higher in Europe. Microsoft was a 47 per cent favourite in the US, but only 11 per cent considered MS a preferred supplier in Europe. IBM's mindset had increased over the past year, increasing from 3 per cent to 10 per cent as a result of IBM's blitz on the market.®