Comparing OnIine RetaiI SaIes Growth : US Vs Europe

L-commerce is one of the fastest growing markets in Lurope. 1he statistics are problematic as state
statistical research organisations teno to unoerestimate the size of the sector. Baseo on CRR
research commissioneo by Kelkoo, 2010 online sales in the UK were E44 billion [52 billion or 10.7%
of UK retail traoe [+16% on 2008.

or Lurope [incluoing UK, the total market was worth E145,600 million in 2010 [up from E102,v00
million in 2008. Online retailers in only three countries, UK, Cermany ano rance accounteo for 71%
of Luropean online sales.

Online sales in Cermany were E33.2 billion [3v.2 billion, 8.0% of retail sales [+14% over 200v. ln
rance, where online retailers grew at one of the fastest rates in Lurope, 2010 online sales were
E26.4 billion [3v.2 billion or 6.0% of retail sales [+26% over 200v.

14.0% increase in online sales to reach E50.3 billion [5v.4 billion. 1his means that the UK will be
the first Luropean country with online sales of more than 12.0% [against 10.7% in 2010. Last year
we forecast that UK online woulo rise to a 10.5% market share in 2010, it was actually 10.7%.

ln 2011, online sales in Lurope are forecast by CRR to grow by 18.7% to a new total of E171.8 billion
[202.v billion.

e expect the rate of growth of online retailing in the UK, rance, Spain ano ltaly to be slightly lower
in 2011 than 2010, but Cerman online to grow slightly faster. But with Luropean average growth
expecteo to be 18.7% this year, it is still a cracking pace.

US Online Sales

1he Once annual sales growth of more than 25%, growth online in the US has oiminisheo. However
retail sales through conventional shops have slumpeo baoly ano in comparison online sales have not
oone too baoly.. Online retail sales in the US have a market share somewhere between 8% ano v%.
But 1his may inoicate that online sales in the US as a percentage of retail sales may soon fall below
the level of several Luropean countries.

E-reta|| sa|es r|se 137 |n 03

Online shoppers in the United States spent $36.3
billion in Q3, comScore says.
Thcd Rueter
Senor Edtor

Online shoppers in the United States spent $36.3 billion in the third quarter, up 13.1% from the $32.1 billion spent for
the same period a year ago, according to figures released today by comScore nc.
The web measurement firm says the third quarter marks the eight consecutive quarter of year-over-year growth for e-
commerce spending, and the fourth consecutive quarter of double-digit growth. n the second quarter of 2011, e-
commerce spending increased 14% compared with the same period a year ago.
ComScore says most of the growth in the third quarter came from a 22% increase in the number of online buyers.
The firm adds that 74% of all web users made at least one online purchase in the third quarter.

"The third quarter of 2011 saw a continuation of the year's strength in U.S. retail e-commerce spending, even in the
face of renewed economic headwinds and uncertainty facing the U.S. consumer, says comScore chairman Gian
Fulgoni. "As we approach the critical holiday shopping season, we are optimistic about the continued health of the e-
commerce sector despite other factors, including stubbornly high unemployment and volatile financial markets. More
consumers than ever before are relying on the online channel for product and pricing information, which along with
the nternet's fundamental appeal of convenience and attractive pricing, are contributing to the sustained upward
momentum in e-commerce spending.
For the third quarter, the top-performing online categories includes digital content and subscriptions, event tickets,
jewelry and watches, consumer electronics (but not computer peripherals) and computer software. Spending in each
of those categories increased at least 15% compared with the third quarter of 2010.
The comScore report also notes that 40% of online purchases in the third quarter of 2011 included free shipping.
That's down from a peak of 49% for the fourth quarter of 2010, though comScore anticipates an increase in free
shipping offers in the fourth quarter of 2011.

The U.S. online retail market looks solid as the busy holiday shopping season gets under way,
although economic uncertainty remains, according to a study from comScore.
SMLAR ARTCLES:
O Holiday Related Online Sales Grew 15 Percent in 2009
O PayPal Users Beware of Holiday Phishing Scam
O Cyber Monday is a Joke, but Online Shopping sn't
O 5 Unique Ways to Make Money Online
O Black Friday Sales Gains Higher Online Than in Stores
O Apple Cuts Prices on iPads, iPods, Macs for Black Friday
U.S. retailers' online sales grew 13 percent in the third quarter, compared with the same quarter last
year, marking the eighth consecutive quarter of year-on-year growth, comScore said on Wednesday.
A key factor in the market's growth was an increase of 22 percent in the number of buyers -- 74
percent of all nternet users made at least one online purchase during the quarter, the company said.
"As we approach the critical holiday shopping season, we are optimistic about the continued health
of the e-commerce sector despite other factors," said comScore Chairman Gian Fulgoni in
a statement.
Despite high unemployment and financial-market turbulence, e-retail has grown as people, more and
more, use online stores, search engines and other sites to research products, find deals and benefit
from the conveniences of shopping online, according to comScore.
The most popular product categories during the quarter were digital content and subscriptions; event
tickets; jewelry and watches; consumer electronics; and computer software. Each category grew at
least 15 percent year on year.
The study doesn't include travel-related sales, items bought at auctions, cars or large corporate
purchases.
Juan Carlos Perez covers search, social media, online advertising, e-commerce, web application
development, enterprise cloud collaboration suites and general technology breaking news for The
DG News Service. Follow Juan on Twitter at @JuanCPerezDG.

E-tailing in India
chillibreeze writer - Shaila Rao
During the dotcom boom - Ecommerce was the sunrise industry, the
one that would change the face of the world. While Ebay and Amazon
- the twin pillars of Ecommerce in US did bring about paradigm shift in
USA, the tech pundits in India are still a bit iffy about Ecommerce in
India.
The Ecommerce market is expected to touch 9210 Crore INR in 2007-
08, E Tailing or E RE-tailing market is only about 1150 Crore INR
according to a survey conducted by Internet and Mobile Association of
India and Indian Market Research Bureau (IMRB).
For the purpose of this article E-tailing is defined as Ecommerce sites
including auction sites that sell groceries, apparel, CDs, books,
electronic items, gifting item etc but exclude travel, digital downloads
and online classifieds sites.
The top E-tailers in India are indiatimes.com, fabmart.com, rediffshopping.com. They have managed
to retain their lead due to innovative business strategies, supply chain model and changing urban
lifestyles

is Ecommerce so important?
E commerce and ETailing, from a business perspective offer an opportunity to cater to consumers
across geographies, no operational timings, unlimited shelf space - and all this with miniscule quantity
of infrastructure. For a country like India, this business model is a good way of growing the
consumption driven economy.

Growt Drivers
The growth in the E-tailing market is driven by the need to save time by urban India. Besides with
over 2.5 billion internet users, access to internet has also played an important role in growing the
markets. Changing demographics (youthful India), changing lifestyles and exposure to the developed
markets sure give a fillip to this fledgling industry. The soaring real estate costs in India have certainly
inspired many an online venture. Also E-tailers have developed many innovative promotions to lure
customers and there by growing the market.
Barriers to Growt
But then all is not well in the E-tailers paradise. The cost of customer acquisition is pretty high in
India - about 1100 INR/customer which eats into the margins, as most goods retailed are low value
items such as books, CDs and electronic gadgets. High margin goods such as apparel are not very
popular because of the touch and feel factor. Most Indians are not comfortable using their credit cards
for shopping and there is always a fear of "what you see may not be what you get. There may be a



>> read more
problem with complaint resolution, especially after receipt of wrong goods or delayed delivery.

%e Real Issues
The Indian Retail industry has always thrived on personalization. The grocer, tailor or even the mom n
shop apparel store owner knows the preferences, remembers customers taste, budget and previous
purchases. They sense the customers mood too - which no CRM software can claim to do.
Trying to personalize each customers experience - might be one way to grow.
The Indian consumer is still very need oriented, not very impulse or deal oriented like the American
counterparts. Hence it might make sense to create real consumer centric promotions constantly that
provide real value to the Indian consumer. Slowly but surely this is happening in India.
There have been horror stories about receipt of bad or wrong goods, delayed deliveries, no response
from the company - which adds up to not trusting the online retailers. Through this changing - albeit
slowly, thanks to automation and technical integration.
%ouc points to focus on
1. Customer is te King - A good 24/7 customer service through email, chat and toll free phone is
what the E-tailers are providing. Customer complaint resolution - whether, delayed delivery, product
quality, wrong product delivered will certainly work towards long term customer relationship, retention
and acquisition.
2. Suppl Cain
Most customer complaints and delivery returns can be traced to the supply chain vendors or
merchants. They are in fact the most important internal customers. It is important to have the supply
chain vendors or merchants well integrated into the system - both technically and strategically.
3. New Business Models
E-tailers always search new and innovative business models. Case in point being US based Power
Reviews - where it provides free review technology to E-tailers and all it asks in return is that the
reviews collected on the retailers web site are syndicated, which is then aggregated on the
Buzzillions.com, its sister website. Some Indian sites simply collect orders over a period of time say a
week, order in bulk from the vendor and finally ship it to customer at a discounted rate. The customer
is told beforehand about the delivery date, of course.
4. Comparison Sopping and Customer Reviews
All the E-tailers are present on comparison shopping sites is of paramount importance - especially
since people now visit these sites before they place the order. Being present on well known sites such
as compareindia.com andwize.com is a very good idea. Also they encourage customer to write the
product reviews - nothing authenticates their offering to an undecided customers like a good product
review.

%e Conclusion
Though much is yet to be achieved, remember E-tailing is a new industry in India. With broadband
internet access still accessible to entire population, this industry may see an explosive growth. Most
growth drivers are in Indias favor - demographics, economy, changing lifestyle, exposure to new
ideas. It is just a question of creating a sustainable eco system for E-tailing, which is at an inflection
point. Time to fasten the seat belts!