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Forrester Research’s Jaap Favier predicts €100 billion will be spent online in 2006, growing to €263 billion in 2011: |
In the coming five years, the number of Europeans shopping online will grow from 100 million to 174 million. Their average yearly Net retail spending will grow from around €1,000 to € 1,500, as UK Net consumers, who currently spend €1,744 each year, outspend even their US counterparts online. Overall, this will cause European eCommerce to surge to €263 billion in 2011, with travel, clothes, groceries, and consumer electronics all above the €10 billion per year mark.
As expected the growth is fueled first by early adopters, or technology optimists, half of the current body of internet users, who are broadening their spending into clothing and electronics.
But the bulk of the growth is to come from the mainstream users, who comprise 90% of the retail customers, are starting to have an impact in online spending. As broadband becomes widespread, the non-techie customers are being won over by convenience and price advantages offered by online retailers. Favian told ZDNET that
“Consumers take about a year after going online before they will purchase something online. The first thing they purchase is either a book, a CD or a trip.
All welcome news for all online businesses, including online publishers. Using the traditional 10% of sales is the marketing budget rule-of-thumb, the online marketing spend for Europe should top €10 billion in 2006. The prediction is below Jupiter Media Metrix’s forecast of €4,014 million by 2008. A reflection of the online advertising struggle to gain its proportinoal share of the overall advertising spend.