Electronic Commerce: How Soon? How? How Much?

Published - Aug 2000| Analyst - Steven Safran| Code - IFT013B
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Report Highlights

  • Consumer e-commerce expenditures in the U.S. will grow from $22 billion in 1999 to $157.4 billion in 2004, an AAGR of 48.0%. This will be accomplished by a combination of an increase in the number of Internet users and increased expenditures by these users. The number of households with Internet access will grow from 27.4 million in 1999 to 44 million in 2004, an AAGR of 10.0%. Further, the average annual e-commerce expenditure per household will increase from $801 in 1999 to $3,577 in 2004, an AAGR of 35%.
  • The most significant use of the Internet for business purposes has been the "B2B," the business to business aspect of e-commerce. Expenditures by companies who buy materials and services from other companies over the Internet is becoming so well accepted, such expenditures will increase from $142 billion in 1999 to $3,012 billion in 2004, resulting in an AAGR of 84%. This growth will be so robust that B2B expenditures will increase from 1.5% of the total gross domestic product in 1999 to 25.1% in 2004.
  • Overall, e-commerce expenditures in the U.S. will increase from $164 billion in 1999 to $3,169.4 billion in 2004, an AAGR of 81%.



The goal and objective of this study is to define the overall e-commerce spectrum as well as to assess the impact this Internet-based distribution process will have on consumers, es, the financial services community, merchants and regulatory bodies.


Our way of doing both in the consumer and to sector is undergoing a dramatic change. The period from 1999 going forward through 2004 will present challenges which will lead to obstructions and opportunities. The environment is already changing from a "bricks and mortar" economy to a combination of a bricks and mortar and "clicks and mortar" economy. This study will address the issues and opportunities which come with providing goods and services in a real time world.


This study will present answers as to how the new clicks and mortar process will become very important to our standard of living, and will coexist with its bricks and mortar counterpart. These answers will be of value to consumers; consumer groups; merchants; the corporate world (especially financial services companies); state, local and federal governmental agencies; vendors and suppliers; and economists, teachers, students, consultants and investors.


The study will present quantifiable evidence of material change in how will be conducted over the next five years, utilizing 1999 as a base year. Each of the sections in the study plays an important role in explaining the growth of e-commerce both at the consumer and levels. The report is presented in a modular format so as to give readers the full flavor of the e-commerce phenomenon.


The methodology utilized in this study is as follows:

  • Determine current state of Internet-based e-commerce environment
  • Ascertain growth of the Gross Domestic Product (GDP) through 2004
  • Determine those business sectors which will be most impacted by the Internet in their transactions with other businesses, i.e., automotive, government, health care, etc.
  • Ascertain to what extent these businesses will be impacted in using e-commerce in their business dealings with other businesses, i.e., what percentage of their expenditure will involve e-commerce
  • Determine what products and services consumers will purchase over the Internet, i.e., travel and entertainment, computer, software, houseware, etc.
  • Ascertain what dollar volume of expenditures will occur for each major line item of goods and services
  • Determine the extent to which e-commerce expenditures will impact the GDP from 1999 through 2004

Note: Average Annual Growth Rate (AAGR) percentages calculated through year 2004 are based upon a starting point of 1999 unless otherwise noted.


The following sources were utilized in the completion of this study:

  • Company annual reports
  • Company and organization press releases
  • Material from the following organizations:
    1. FDIC, Division Research and Statistics
    2. Federal Trade Commission (FTC)
    3. Federal Communication Commission (FCC)
    4. The Census Bureau
    5. U.S. Department of Commerce
    6. Statistical Abstract of the United States
    7. National Retail Federation
    8. Cellular Telecommunications industry association
  • Interviews with company officials of pertinent companies and organizations

Table of Contents & Pricing

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