Ecommerce shows signs of maturity
11.11.2002

Broadband growth will further boost online sales The collapse of dotcom mania has done little to slow the exponential growth of ecommerce in the UK and its development into a mature business opportunity.

Online sales increased by 42 per cent to £17bn in 2001, according to the latest government figures released by the Office of National Statistics (ONS) last week.

The ONS survey reinforces the message that the internet is a key business tool despite the doom and gloom surrounding the IT industry, says Liz Grant, director of advisory body UK Online for Business.

'Sales of £17bn worth of products and services is considerable chunk of business,' she said.

'A major challenge going forward is to help companies understand what technology is available, in the context of a clear business case. 'A few years ago everyone thought a website would triple your sales overnight and now business is looking to use technology to cut costs and improve productivity - it's a different message.'

Integration of the internet with existing systems offers the biggest benefits, says Confederation of British Industry head of ebusiness Jeremy Beale.

'The focus is changing from websites to integration issues, and that's where the momentum will increasingly be. It's not just about hooking up - which is what a lot of the dotcom mania was about - but about squeezing out economies by developing integration,' he said.

Despite economic uncertainty, business is still willing to invest in projects offering a strong return, says Charles Ward, director of marketing and services at supplier body Intellect.

'Whilst overall it is a tough time in the high-tech sector, people will still spend money to save money. The online sales figures show companies are picking up on the opportunity for streamlining and increasing efficiency, and that is driving the adoption of ebusiness.'

'Broadband will be crucial, says Institute of Directors' director of emarketing Jonathan Cummings.

'It's an enormous year-on-year growth but its still a small percentage of overall sales. Broadband will have a huge impact and hopefully we will see even faster growth rates over the next year or two,' he said.

David Roberts, chief executive of blue chip user group The Corporate IT Forum, agrees that high-speed communications will provide a further boost to online sales.

'If growth is at almost 50 per cent without much effort on broadband then think what it could do with broadband,' he said.