The E-Commerce Market: Size and Trends

Today the Internet might be viewed as a huge market potentially capable of covering the population of the whole world. This is why electronic commerce or E-Commerce is so attractive for many traditional businesses.

E-Commerce consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown dramatically since the large introduction of the Internet. A wide variety of commerce is conducted in this way, including things such as electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange, automated inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web in at least some point in the transaction\'s lifecycle.

Since mid 1990’s traditional traders followed large Computer Manufacturers into the new sphere and today you can buy practically anything through the Internet: from a bunch of flowers to a car. The only exception seems to be ’ a trip to Mars. Today E-Commerce market is huge and still growing.

The E-commerce market is totally democratic. This is perfect capitalism: if you sell ’ you win, if you don’t sell ’ you loose. It’s all about marketing and economic rules of demand and supply. Certain products or services appear more suitable for online sales; others remain more suitable for traditional sales. Many successful purely virtual companies deal with digital products, music, movies, education, communication, software, photography, and financial transactions. Examples of this type of company include Amazon.com, Google, E-Bay and Paypal. Products less suitable for E-Commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings ’ most notably clothing ’ and products where color integrity appears important. Nonetheless, clothing sold through the internet is big business in the U.S.

According to eMarketer’s annual report in 2006 the E-Commerce market size in Europe has grown to ’106 billion ($133 billion). Analysts say that it is very likely to go on increasing and display a very fast rate of annual growth ’ up to 25%. The situation will be stable for at least five years and the market will reach the point of ’323 billion ($407 billion) by 2011.

Britain, France and Germany prevail in the European E-Commerce market. These countries have the largest share in the total figures transactions ’ up to 72%. British E-Commerce market ranks first and analysts believe it will reach $84 billion in 2007, which is 39% higher than the figures of 2006. Germany holds the second place. However, it is first in the number of online-customers ’ there are as many as 3 million.

Some researchers also note that in the next five years the European market might increase significantly due to the E-Commerce growth in the countries like Italy, Holland and Spain.

A wide range of goods and services can be sold through the Internet. A large piece in this pie is held by Information Technology. However, the share of other niches (for instance, traveling and finance) is unexpectedly high. Real estate, computers, hardware and software, tourism, and financial services comprise the top of the list.

According to Mentis Corporation (North Carolina, USA) in the future total sales will jump to $4.5-$6 billion. An average Internet-transaction will be $25-$30. The total Internet-transaction figure is likely to amount to $130-$200 million. The on-line goods market share will come to 60%-70%. Although these figures make up only a comparatively small part of the total retail market volume their absolute value makes E-Commerce market attractive for new investments. Computer Intelligence (California, USA) reports, over 3 million customers have conducted on-line transactions in a single day.