One-fifth surf regularly today, half will by 2003

1999 showed tremendous growth rates in terms of Internet penetration in Western Europe. The total number of users almost doubled between the beginning and end of the year. At the turn of the millennium, IDC noted that Western Europe had an Internet population of 81 million users, spending approximately 10.3 billion euros online. The new research from IDC predicts growth of the region`s online population to 215 million, or over half the population, spending over 125 billion euros by the end of 2003.

"Although the number of Internet users rocketed in 1999, the share of users that buy online is still relatively limited," said Stefan Elmer, research analyst for IDC`s European Internet and eCommerce Strategies program. "Only 15% of the users purchase products or services online every quarter, which probably reflects the lack of trust in the shops and online purchasing processes." Fifteen percent, however, does represent, for the first time, a significant part of the entire population. While only just over 3% of Western Europeans buy online today, IDC expects 20% to regularly purchase products and services online by yearend 2003.

"Part of the reason for the forecasted growth is a rapidly increasing number of access devices," Elmer said. IDC estimates there are currently around 45 million Web access devices in Europe and that this number will triple over the course of the next four years. "Currently the PC is the main Internet access device, but we believe alternative access devices such as screen phones and set-top boxes will supplement the PC, to an increasing extent, over the coming years."

"There is, however, a great variation in terms of Internet usage and growth rates from country to country," Elmer added. "With Internet penetrations between 36% and 45%, the Nordic countries continue to be the most advanced and are around a year and a half ahead of the European average." The United Kingdom, Germany, Austria, Switzerland, and the Netherlands are not far behind the Nordic leaders and are just ahead of the European average. "France and Italy have substantially lower rates but have fairly high growth rates. Portugal and Greece are Europe`s laggards and are some four years behind the average," Elmer concluded.

Internet Usage and Commerce in Western Europe 1998-2003 (IDC #I03F) sizes and forecasts this market and includes the number of people accessing the World Wide Web, the number of Web-access devices, the number of users buying on the Web, and average spending rates per buyer. Data and forecasts are segmented by country and by access location (home, work, and school/public access). Internet commerce data and forecasts are segmented by business-to business and business-to-commerce and broken down by 19 product and services categories at the European level. This report is available to purchase from your local IDC office.

BMI-T Comment

BMI-T predicts a 37% growth in Internet usage for 2000, which should see about 1,96 million South Africans online by the end of the year. More than 50% of these users access the Internet at least once a day. By the year 2003, the number of Internet users is predicted to rise to 3,56 million. While the growth rate is significant, the number of Internet users as at the end of 2000 will only represent 4.9% of the total South African population and 8.9% in 2003.

As BMI-T has previously noted, South Africa has a dual economy, with a combination of developed and developing nation characteristics. It has world-class IT infrastructure in many parts of its business sector, with 97% of large, 89% of medium and 80% of small companies having some access to the Internet. The same applies to household IT usage in the upper income bands. However, this rapidly evaporates in households with lower living standards, the majority of which will not be in a position to embrace IT in the short and medium term. The advent of lower cost alternative Internet access devices will make Internet more affordable, and by 2003 BMI-T predicts that about 1,2 million alternative access devices will be in use.

BMI-T`s most recent research, ECMM - SA Electronic Commerce Overview (March 2000), indicates that Internet commerce in the South African non-financial business sector, amounted to R2,8 billion in 1999 and is predicted to rise to R5,8 billion by the end of 2000. This however only represents 2,6% and 4,4% of total e-commerce revenues for the non-financial sector for 1999 and 2000 respectively.