Global E-Commerce Takes Off

120 Million People Worldwide Have Purchased Goods Or Services Online

"Global e-commerce takes off -- 120 million people worldwide have purchased goods or services online: Angus Reid study"

"Window shopping a big part of online experience: 25% of all online purchases made on impulse"

SAN FRANCISCO, April 11, 2000 -- Nearly 120 million out of the estimated 300 million worldwide Internet users have already made a purchase or transaction online, with as many as one in four purchases made on impulse, according to an Angus Reid Group study of Internet users in 34 countries. Contrary to other studies, the vast majority of shoppers were very satisfied with their online experience and only a minority voiced concerns about fraud and security issues.

"The online encryption and security industry has done a terrific job reducing concerns about online shopping," said Brian Cruikshank, senior vice-president in charge of The Face of the Web, the most comprehensive study of global Internet usage. "Still online credit card payment is more of a North American phenomenon than a global one."

Barely half of shoppers outside the US and Canada use credit cards, compared with 75% in North America. Cash on delivery and bank drafts are almost as popular as instant credit card payments in Asia and Europe, the Angus Reid study indicates. This global study -- based on a sample of 28,374 internet users and consumers -- was conducted by telephone or face-to-face using conventional research techniques and full random sampling in 34 countries last December.

Forty percent of all internet users -- about 120 million people worldwide - have made at least one purchase online, the study shows. More than half (54%) of all online transactions were made in the U.S. The typical American online shopper made seven purchases over the past three months for a total of $828, compared with the global average of less than $500. As well, three- quarters of Internet users around the world expect to spend more online this year than last.

The majority of online shoppers planned their purchases and knew exactly where to find what they were looking for, but 24% said they found a product by chance in the course of a routine Internet session.

"Advertising and word-of-mouth work. They're driving people to the desired sites," Cruikshank said. "But I wouldn't discount the sheer pleasure and fun of random surfing. That's the beauty of the web: you never quite know where you'll end up and what you're going to do next. Internet users have become avid window shoppers."

E-Commerce Activities

The most frequently mentioned experience with e-commerce was using the Internet to gather information about products and services - 52% of Internet users have tested the waters this way. Almost as many - 40% - have taken the plunge and purchased a product or service directly online. Other commercial services, such as chat lines (37%) and sampling or downloading music (36%), have also drawn large followings, especially among younger Internet users. Financial transactions such as banking (20%) and stock trading (8%) also attract a sizable base of global users.

"One interesting development is that the American market is beginning to lag behind in certain sectors - for instance, online banking is more widespread among Internet users across most of Europe, or in South Africa and Brazil, while downloading music files has really taken off in Latin America, Asia and developing countries such as Turkey or Egypt," said Clay Braziller, a vice- president in the Angus Reid Group's Interactive Research Division.

The goods most frequently purchased on-line included books (37%), computer equipment and software (21%), music or music CDs (20%) and clothing (17%).

Two-thirds of the online purchasers in the survey had bought something online within the past thirty days.

Internet information gathering is potentially as important as actual transactions, according to Braziller. "Using the Web to get information about products or services - whether just to `window shop' or plan a future purchase - can be a springboard to a whole series of future transactions that can take place on- or off-line, using either old or new distribution channels."

Online shoppers show every sign of making the Internet a regular part of their shopping behaviour. Among those who said they were likely to buy books, music recordings, travel tickets or computer software in the next twelve months, nearly half indicated they would make their purchase online, while most of the remainder planned to use the Internet for gathering information about the products they intended to buy elsewhere.

Global Internet users who had made an online purchase also registered a high degree of satisfaction with the process - 71% described themselves as "very satisfied" with their last online transaction and another 22% were "somewhat satisfied." The majority (60%) of global online purchasers cited convenience as their motivation for using the Internet over traditional shopping methods.

However, it should be noted that some of the data were collected before the 1999 holiday season where a number of websites experienced major customer service and delivery problems.

"Still, like so many other aspects of the Internet, on-line commerce is hard to give up once you have tried it," Braziller said. "A few people are still reluctant to try shopping online because of security concerns, but this issue is starting to recede as more attention focuses on privacy issues."

About Angus Reid

Established in 1979, the Angus Reid Group is among the world's leading research companies, providing a full array of marketing and social research services to the private and public sectors. Founded by Dr. Angus Reid, the Angus Reid Group has conducted extensive research in 80 countries and in 40 languages and serves clients around the world through 11 offices and 300-full-time and 800 part-time staff. For more information visit www.angusreid.com

For more information on this release, please contact:

Elen Alexov Director of Marketing Services Ipsos in North America 778.373.5136

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