RealTime IT News

Report: E-Commerce Comes of Age in the UK

E-commerce has overtaken communication as the driving force behind Web development in Britain, says a new survey.

According to the UK Internet Survey 2000 by Fletcher Research, the UK research arm of Forrester Research, in 1999, the majority of companies (59 percent) were using the Web primarily to communicate with consumers, employees and investors. Today, almost half of all sites are attempting to exploit e-commerce opportunities.

The report says that the relative youth of the UK Internet means that large corporations are not necessarily disadvantaged by Web-based start-ups, and "although competition is fierce, many big businesses are moving sufficiently quickly to secure online success."

" UK corporations have put up strong competition to Web-based start-ups," said Rebecca Ulph, senior analyst at Fletcher Research.

"For instance Smile, backed by The Co-operative Bank, is one of the strongest brands in UK online financial services; the BBC has aggressively leveraged its off-line brand in a portfolio of Web operations; and BT has remained one of the UK's largest ISPs in the face of aggressive competition from Freeserve."

But the UK remains an attractive market for established U.S. Web businesses, the report says. In many cases, UK services are being led by competitors that began life in the U.S., and at present, a great many stand-alone Web businesses operating in the UK are extensions of successful U.S. businesses. Amazon, for example, controls over 50 percent of the UK online book retailing market.

The increased competition in the UK Internet economy is boosting investment in Web operations, and the cost of setting up and running Web companies is growing rapidly.

It now costs around GBP1 million to set up a competitive commerce-enabled Web site, up over 100 percent from last year, the report says.