Online spending stats to ponder

by oneafrikan on January 20, 2006

There’s an interesting piece on the front of the FT today, that talks about online spending stats in the UK. Here are some of the take homes:

  1. UK shoppers spent nearly £5bn on internet purchases in the 10 week period leading up to holidays
  2. This was a nearly 50% increase on Christmas 2004
  3. Internet shopping now accounts for about 9% of retail spending
  4. 24m people shopped for Christmas presents online, spending an average of £208
  5. 2005 online shopping overall grew 32% to £19.2bn, with shoppers spending an averag of £816 during the year
  6. It’s estimated that the average online spend per individual per year will top £1000 in 2006, with the market expected to grow to £26bn
  7. Broadband connections grew 60% last year, with more than 37% of UK homes how having high speed internet
  8. Online e-tailers are starting to cannibalise traditional retail sales – there were a few examples, but basically people are starting to spend less in store and more online, with products like books, music, and electronic devices dominating spend

For me, this is significant for two reasons:

  1. Skepticism around the viability of online operations in the UK should start to diminish, with increased spending around customer acquisition and retention.
  2. This validates my position on the weak viability of online ventures in emerging markets – there is opportunity to replicate already successful models, but the number of people buying online just does not make a good ROI predictable, or even possible within the first 3 years – you’re not talking about marketing issues, you’re talking about a critical mass of people needed that doesn’t yet exist (there is a positive upswing to this though ;-))

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