B2C Goes From Rags to Riches
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The e-commerce sector, once the face of the protracted dot-com slump, has emerged as a rare bright spot on the Internet with research firms predicting a banner year in 2003.
Despite a continued sluggish economy, business research firm eMarketer is predicting the total business-to-consumer (B2C) commerce market will reach $90.1 billion in 2003, a whopping $30 billion over 2002.
By 2005, the B2C e-commerce market is projected to reach $133 billion, eMarketer said. The statistics mirror projections from Jupiter Research that the market this year will reach $85.7 billion and $132.2 billion by 2005. (Jupiter Research is owned by Jupitermedia Corp., the parent company of this Web site).
Excluding travel, eMarketer is projecting $58.2 billion in B2C retail revenue in 2003. Similarly, Jupiter Research statistics show non-travel e-commerce revenue will be in the range of $51.7 billion. Both firms indicate that more than half of the Web population have embraced online shopping.
The expected boom this year follows a retreat in 2001 when the first three quarters remained flat.
"After the traditional first quarter dip following the holiday season, online sales in the second quarter rose about $1.5 billion from first quarter of 2002 and kept growing from there, culminating in an all-time high of $14.3 billion," eMarketer said.
All told, last year was nice to the e-commerce sector. Statistics from the Department of Commerce showed spending reached $45.5 billion, a $10 billion increase over the previous year.
The good news is in stark contrast to a few years ago when e-commerce
plays were going out of business at a rapid pace. Since then, success
stories have emerged among the major plays such as Amazon.com
, Barnes & Noble.com
and airline ticketing clearinghouse Orbitz.
Even more encouraging, Jupiter Research reported, was that higher percentages of Web surfers have become more comfortable with the concept of online shopping.
Driven by online population growth, increased spending by buyers, and higher percentages of online shoppers (142 million consumers or 65 percent of the online population will have made a purchase online by 2007) Jupiter expects online retail spending to reach $105 billion by 2007, accounting for 5 percent of all U.S. retail spending and influencing 34 percent of all U.S. retail spending.
Jupiter found that the Internet affected $232 billion in offline spending in 2002 -- excluding automobiles, prescription drugs, financial services, and travel) -- and will grow to $573 billion by 2007.
* Robyn Greenspan of internetnews.com sister site contributed to this report.