European businesses are embracing the Internet as an exclusive channel to market, with a fifth having launched a product that is only available over the Internet.
European companies' annual Internet sales currently stand at $288 billion and they expect them to rise to $2004.4 billion by 2002.
These figures are from the latest KPMG Consulting survey of senior directors with responsibility for ecommerce in 357 European companies. This found that nearly three quarters of respondents have, in the last three years, launched a new product or promoted an existing one, using ecommerce technologies.
Alan Buckle, chief executive at KPMG Consulting, said: "In the last 12 months, European business has grasped the monumental scale of the e-business and ecommerce opportunity. All business leaders now know they must respond quickly or die."But the easy wins are over. Barriers to entry are increasing as the first movers mature. The action is moving from the pure ecommerce retailers, to the re-engineering of the whole enterprise to e-business. In this phase the business to business impact will be major," he warned.
Other major findings in the report included 63 per cent of companies saying they now have sales attributable to the Internet, up from 45 per cent last year. In 1996 the same survey, conducted in the UK only, found less than one in four companies had sales attributable to the Internet.
The UK, Germany, Italy and Scandinavia emerged as the most sophisticated ecommerce countries. On a sector level, manufacturing and retail/wholesale distribution are the most advanced.
Overall, 12 per cent of respondents claim to be fully automated with online customer purchases linked to back office systems such as stock control.
However, the majority of companies (51 per cent) are only at the stage where they have established two-way communication with their customers, but are still unable to carry out transactions online.
The most important benefit of ecommerce is the ability to reach new markets, according to 36 per cent of respondents, up 25 per cent from last year. Speed and cost savings take a nosedive (23 per cent to 15 per cent), which KPMG believes could be because businesses have discovered that implementing ecommerce strategies is more expensive than originally calculated.
The usual culprit, security, is still blamed as the biggest barrier to ecommerce, being cited by 78 per cent of respondents as a concern. Low skills level is second at 61 per cent, and implementation difficulties third at 60 per cent. In 1996 35 per cent of UK respondents said retraining of staff was a major factor, something that has shrunk significantly.
KPMG's fourth annual research report into ecommerce and the second pan-European study can be found on its website www.kpmg.co.uk.
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