Clear leaders are emerging among European companies profiting from ecommerce, creating a gulf between successes and those companies lagging behind.
According to the 'European Electronic Commerce' report from KPMG Management Consulting, 10 per cent of the 518 companies surveyed are turning ecommerce to their advantage.
The companies said they were achieving one per cent of their revenue from ecommerce projects and were doing so profitably. As the majority of companies surveyed had turnovers of over $300 million, this means $184 billion is being transacted over the Net.
The report predicts sales over the Internet to explode to $1,988 billion (10 per cent) in three years, rising to a massive $3,555.7 billion (17 per cent) in five years.
This boom will not happen any sooner due to companies being forced to concentrate on more pressing issues. ?Currently 70 per cent to 80 per cent of IT spend is on Year 2000 and EMU issues, squeezing out ecommerce,? said Paul Baker, a partner at KPMG Management Consulting responsible for ecommerce. ?Shortly after 2000 this will tail off and resources will be freed up.?
Of the strategies by ecommerce ?leaders? the report was able to establish a criteria for success. It found that these companies are more likely to have a substantial budget dedicated to Internet marketing than the rest. On average the leaders were found to be spending almost twice as much on ecommerce than the rest.
Also identified as essential for a successful and profitable ecommerce venture were integration of ecommerce into the supply chain and board level support for ecommerce projects. A staggering 80 per cent of leaders had support at the highest level, compared to 56 per cent of the rest.
As a result 64 per cent of the leaders believed they had increased sales from marketing via the Internet and regard the Internet as more cost-effective than traditional supply chain channels for making purchases.
As ecommerce matures more companies recognise importance of allowing customers to conduct the whole process including payment over the Internet. Almost a third of the leaders believed they had gained competitive advantage by offering this service, and 66 per cent thought ecommerce is vital to global competitiveness.
The report also highlighted a difference in attitudes to ecommerce among European companies. Perhaps the most surprising was Germany?s where in five years? time only five per cent of sales were expected to be handled over the Net. While in Italy, 82 per cent of manufacturers are not using the Net to transact with suppliers.
Four out of five French respondents said their companies had implemented electronic data interchange which, due to the success of the Minitel system, may explain their comparatively slow uptake of other ecommerce technologies. Only 38 per cent were convinced of the benefits of ecommerce, compared to 70 per cent of Scandinavian respondents who saw ecommerce as vital to global competitiveness.
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