Despite security concerns costing the US e-commerce market $2 billion in sales this year, the local market is unlikely to be affected by similar issues.
International ICT analyst firm Gartner says almost $2 billion is lost in electronic commerce sales in the US as a result of security concerns. In a statement, it says while e-commerce sales have experienced consistent revenue increases, recent online and offline security breaches are impacting on the buying patterns of US adults.
However, local research company World Wide Worx says such concerns are unlikely to affect the local market. MD Arthur Goldstuck says the festive season is likely to see sales of about R170 million this year, a 25% increase on last year's activity.
This figure, which excludes increased financial services activities and travel bookings, does not represent a spike in sales over the period, but is consistent with normal spending patterns.
Gartner, citing an in-house survey, says "due to consumers' concerns about the security of the Internet, nearly $2 billion in US e-commerce sales will be lost in 2006".
The company surveyed 5 000 US adults online in August and found $913 million in e-commerce sales this year was lost because of security concerns among online shoppers. Another $1 billion is lost because of shoppers who refuse to shop online because of security concerns.
Goldstuck argues, however, that the local landscape is different and such concerns are only likely to arise in about five years as Internet usage matures.
"E-commerce and online banking grows relative to the experience of users in SA," he says. Over the past four years, use of the Net for these services has grown at between 25% and 35% a year. Goldstuck expects this trend to continue over the next two years as the market matures.
Explaining the security concerns in the US, he says these are being seen as it is a mature market. Nearly half of online US adults, or 46% of more than 155 million people, told Gartner that concerns about theft of information, data breaches or Internet-based attacks have affected their purchasing payment, online transaction or e-mail behaviour.
Online banking safer?
Of all the behaviours affected, online commerce, which includes online banking, online payments and online shopping, is suffering the highest toll, says Gartner.
"Financial institutions and other e-commerce service providers need to beef up security in their online channel to retain customers, but they must be careful to keep the added measures relatively convenient," says Avivah Litan, VP at Gartner.
Gartner estimates these security concerns have kept about 33 million US adults from banking online. According to the survey, nearly nine million US adults have stopped online banking altogether, while another estimated 23.7 million would not start because of their security concerns.
However, Goldstuck says online banking is the safest form of transacting. He says, locally, someone is more likely to be caught in a bank robbery than have something go wrong with an online transaction.
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