Europe’s e-commerce market growth is outpacing the rest of the world, according to two reports from industry analyst Datamonitor. Global E-Commerce Software Markets predicts that the trend will continue until 2002, while European Business Internet Services Markets forecasts that, by 2004, 5.4 million, or 65% of all European businesses, will use the internet.
The market is driven partly by the massive grassroots adoption by non-business users, partly by strategic campaigns by governments, but also by a fear that this is an opportunity that other companies are taking, and that if firms do not enter the electronic arena soon, they will be at a serious competitive disadvantage.
Although Europe currently represents only 25% of the world’s $645m internet software market, by 2002 it will have increased, argues Datamonitor, to 33% of $2.8bn, taking share away from the US, which will see its 63% whittled down to 52%.
The reports make particular mention of the benefits in electronic data integration (EDI) that e-commerce brings to business. Prohibited by the costs of building expensive proprietary networks, smaller companies can now use the web to run business processes such as invoicing and purchase ordering.
Datamonitor predicts that the internet service provider market will become increasingly competitive and, therefore, consolidated as margins are compressed. The survivors from this activity, which can only benefit users, will be the ISPs which offer a full range of products with price benefits rather than firms which specialize in niche offerings.
