BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Thursday, 17 January, 2002, 08:35 GMT
The year e-tailers did so well
Website logos
by BBC News Online's Emma Clark

Imagine a world where you could do your Christmas shopping without leaving your armchair.

Most visited UK sites (December)
Amazon.co.uk
(2.37m visitors)
eBay.co.uk
(1.09m)
Tesco.co.uk
(1.07m)
Argos.co.uk
(1.03m)
Lastminute.com
(1.03m)

Source: Nielsen//NetRatings
Of course we have dreamed about such a world since the great internet start-ups opened for business, but this year it seems we really began to believe it.

Almost 33 million Europeans logged online to do their Christmas shopping in December, says the internet research firm, Jupiter MMXI.

And the money spent by these European surfers increased by 71%, compared with last year, according to Jupiter projections.

Bumper sales

Most of the e-tailers have gushed about their Christmas sales, even if they have been cagey about giving out specific figures.

Most visited European sites (December)
eBay.de
(4.37m visitors)
Amazon.de
(3.83m visitors)
Amazon.com
(3.68m)
Amazon.co.uk
(2.52m)
eBay.com
(2.11m)

Source: Nielsen//NetRatings

Amazon, Tesco.com, Bol (UK) and WHSmith.co.uk all said they saw strong sales.

"It's been a bumper Christmas," said Tesco.com's chief executive, John Browett, at the end of December.

The supermarket site made a record 100,000 deliveries in the Christmas week - a "dramatic" increase on last year, says Tesco.

Billion dollar shopping bill

Even in the US where consumers have had longer exposure to the internet, the numbers are still increasing.

The US online research company comScore Networks calculates that $10.8bn was spent in the last three months of the year at US websites - up 18% from last year.

Dan Hess, vice president at comScore Networks
Mr Hess believes the web is coming into its own

Over the whole year, the level of spending on US sites was up 20% - and all this in the middle of an economic slowdown.

One of the sites that has released earnings results, the popular auction site, eBay, saw its revenues jump 64% in the last three months of 2001.

"The internet is coming into its own, it has found its place for many different people," says Dan Hess, a vice president at comScore Networks.

Confidence boost

Mr Hess believes that increasing confidence in the internet is fuelling the spending boom.

"It is all about trust," he says. "Consumers are doing business over an impersonal medium and they need to have confidence."

The personal experiences of online shoppers seems to back this up.


I will continue to use Amazon and am definitely more likely to increase my use of other websites over the coming year

Shauna Cockburn
Online shopper

Shauna Cockburn, who works in London's financial district, did a quarter of her Christmas shopping online and was particularly impressed with Amazon.

"It's much easier to order online and get stuff delivered to work than have to battle with the crowds [on the high street]," she says.

"I will continue to use Amazon and am definitely more likely to increase my use of other websites over the coming year."

Her sister, Emma, an engineer, also shopped on Amazon and was encouraged by the discounts they offered.

The big boys

The trust issue means that the established brands are attracting the most shoppers.

Simon Palethorpe, John Lewis Direct
Mr Palethorpe says offline brands are doing well

In the UK the most visited websites included Amazon, as well as high-street names Argos, Tesco, Comet and WH Smith, according to Nielsen//NetRatings.

Among the top 10 was JohnLewis.com - a surprising new entry if only because the site launched in October.

"There is an increasing dominance of established retail brands," says Simon Palethorpe, head of business development and IT at John Lewis Direct.

"Very few of the pure-play e-tailers have made it over the line to becoming trusted brands," he adds.

"Amazon is the only one I can think of."

'Going great guns'

Last March John Lewis bought up the UK operations of Buy.com - Mr Palethorpe's former employer - and used the technology to transform its small transactional site into the new-look JohnLewis.com.

John Lewis delivery van on the road
John Lewis took over 1,000 orders a day

In the run-up to Christmas, JohnLewis.com sold more than 100,000 products, generated by more than a 1,000 orders a day.

"It has gone great guns and exceeded all our expectations," says Mr Palethorpe.

He puts the success down to people getting more accustomed to buying online, as well as the loyalty of John Lewis' existing customer base.

(Click top-left link "Getting web wise" to read a full interview with JohnLewis.com's Simon Palethorpe.)

Any chance of a profit?

The strong Christmas sales have increased hopes that dot.com companies are on the way to making money.

"They have a better chance than ever of turning a profit this year," says comScore's Mr Hess.


They have a better chance than ever of turning a profit this year

Dan Hess
comScore Networks

Ebay is one of the few sites to have made a profit already, although Amazon has promised that it will announce an operating profit later this month.

JohnLewis.com, meanwhile, plans to break even in three or four years, says Mr Palethorpe.

The issue for companies like Amazon will be whether they can sustain profitability and control their costs, once they go into the black.

E-tailers will also be hoping that they can hang onto the Christmas shoppers, such as Ms Cockburn, in the year to come.

And if they can, we may yet experience the armchair revolution we have heard so much about.

 WATCH/LISTEN
 ON THIS STORY
John Lewis' Simon Palethorpe
"We were set the challenge of getting a revamped web operation up and running and ready to capture the Christmas traffic"
See also:

15 Jan 02 | Business
Etailers 'raised Christmas prices'
05 Dec 01 | Business
E-tailers prepare for Xmas boom
29 Nov 01 | Business
Consumers urged to shop online
26 Nov 01 | Business
Hopes rise for internet stores
26 Nov 01 | Business
Safeway cyberstore shuts up shop
22 Dec 00 | Sci/Tech
Christmas in cyberspace
07 Nov 00 | Business
Christmas cracker for web retail
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories