North America Will Lead Global eCommerce To $6.8 Trillion In 2004, According To Forrester
Internet commerce is making significant gains worldwide as countries collectively adopt online trade. A new Report from Forrester Research, Inc. (Nasdaq: FORR) estimates that global eCommerce will reach $6.8 trillion in 2004, capturing 8.6% of the world’s sales of goods and services. North America will continue to be the global eCommerce leader — contributing nearly $3.5 trillion in online business-to-business (B2B) and business-to-consumer (B2C) sales in 2004 — but the region’s dominance will fade as Western Europe and Asian-Pacific countries hit hypergrowth in 2002.
“North America’s share of global eCommerce will inevitably fall as this boom echoes across other regions of the world,” said Bruce D. Temkin, research director. “Global eCommerce is being driven by a powerful growth spiral — as more businesses and consumers come online to buy and sell goods, firms are aggressively competing for market share, in turn drawing more businesses and consumers to the Web. This phenomenon will continue to carry online trade to higher levels, regardless of the fate of any particular country, sector, or company.”
North America benefits from all the factors that support the growth of online trade: favorable trade and monetary policies, an advanced technology infrastructure, and deep links to international supply chains and trading blocs. These factors enabled the US to hit eCommerce hypergrowth this year.
The leading countries in Western Europe are expected to hit hypergrowth in 2001. By 2004, Western European eCommerce will hit $1.5 trillion in 2004, led by the aggressive efforts of industry giants and the growth of eMarketplaces for online business trade. The Asia-Pacific region will be in hypergrowth by 2004, when technology exports and national commitments to online trade will drive $1.6 trillion, or more than 8% of all sales online. The region will not develop uniformly, however, due to policy and infrastructure hurdles at the national level.
In Latin America and Eastern Europe, infrastructure deficiencies and less favorable policies have delayed the onset of eCommerce. However, Forrester expects Latin America to accelerate into hypergrowth in late 2004 when it will produce $82 billion in online sales. Faced with greater challenges, Eastern Europe won’t reach hypergrowth until 2005.
“Falling trade barriers create openings that eCommerce will pour through,” said Matthew R. Sanders, associate analyst. “In India, for example, falling tariffs will finally allow imports of technology from other industries, which will in turn enable Indian industry to tie more tightly to trading partners in other countries. The Net forges new links between countries, which accelerates the move to global eCommerce.”
For the Brief “Global eCommerce Approaches Hypergrowth,” Forrester examined the conditions underlying eCommerce growth in 52 countries. These conditions include the regulatory environment, technology infrastructure, connection to international supply chains, and existence of regional trading blocs. Forrester expects the expansion of online trade to be highly concentrated with 12 countries representing nearly 89%of worldwide Net sales.