Net will reach 80% of UK homes by 2010, says study

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The Independent Online
EIGHTY PER CENT of households will have access to the Internet within 10 years, says a report by Business Strategies, an economic consultancy.

The survey, entitled "Consumer Market Outlook", claims that by 2008 annual turnover from e-commerce in the UK will be about pounds 8bn, 1 per cent of total consumer spending.

The report argues that many estimates of the rate of uptake of Net technology are too low. It says: "In addition to connection through PCs, two other significant options for connecting to the Internet are becoming available in digital TV and third-generation mobile phones."

The forecasts for consumer spending in e-commerce are derived from data for the US, which is thought to be about five years ahead of the UK in its take-up of "e-tailing" - Net retailing - and from estimates of the effects of Net investment by UK retailers. The report points to "the extent to which existing methods of direct selling, such as call-centre ordering from hard-copy catalogues, are likely to be replaced by e-channels".

Business Strategies says the goods and services most suited to e-tailing include computer hardware and software, music, videos, books, insurance and bank services, travel and entertainment. Products least suitable include impulse buys and specialist goods such as cameras, hi-fi equipment, home furnishing, sports equipment and medical services.

The survey warns that several hurdles need to be overcome before UK consumers become fully-fledged cyber shoppers. The most crucial is a lack of confidence in the security of Internet shopping.

But a separate report, published by E-Insight, specialist in developing e-commerce for UK retailers and venture capitalists, concludes that shoppers' worries over e-commerce trust and delivery will subside if the price is right. The "Family Internet Survey" claims users are reluctant to buy unless they gain 20 per cent discounts on the Net.