European E-Commerce Still Lags Behind U.S.

Despite recent gains, European e-commerce still lags behind online sales in the United States, according to a new study from International Data Corporation (IDC).

The study, titled “European Internet and eCommerce,” reveals that of the 10,600 households surveyed in the 12 largest European Internet markets, five percent of the total adult population had made purchases on the Internet in the three months preceding the study.

The study found that the primary reason that some consumers are reluctant to buy online is the perceived risk of credit card fraud. Another significant factor is a mistrust of online shops.

Notably, the study shows that Europeans are not particularly concerned about price or delivery times.

“Many products and services on the Internet are not priced any lower than in the normal shops, and it takes several days for products to arrive with the mail,” said Stefan Elmer, Internet analyst at IDC. “People are not very concerned with these facts. Instead they worry about having their credit card abused, even though the risk is minimal.”

Europeans Do Not Surf Like North Americans

Unlike North American Internet users, Europeans spend less time on the Internet. Only one in four reported surfing the Web for a half an hour a day or more. The studied cited cost as the major factor reducing time spent on the Internet.

While North American users typically pay a low flat rate in the $15 to $25 (US$) per month range for unlimited Net usage, the study said that Europeans incur high telephone charges for use of the Internet on an hourly basis.

Internet Use Throughout the Continent

Some European countries are more enthusiastic about Internet use than others, according to the study. In Sweden, 58 percent of the population is online, as opposed to France, where only 16 percent use the Internet.

Similar discrepancies were found in shopping patterns among nations. In Britain, for example, 11 percent of the adult population and 26 percent of all Internet users said they had bought products online in the three months prior to the study.

In Spain, however, only one to two percent had shopped online. The number of Web buyers in Europe has increased as Internet use has spread from smaller Nordic countries to larger Northern and Central European countries, the study reported.

In terms of absolute numbers, the study claimed that more than 50 percent of all Internet users are in Germany and the United Kingdom.

Europe Still Lags Behind U.S.

The findings from IDC were made public one day after European policymakers and Internet executives met in Madrid at an Internet conference. Spanish Prime Minister Jose Maria Aznar commented that Europe has not been capable yet of “reproducing the successes achieved on the other side of the Atlantic in the 1990s.”

“Our problem is not the lack of a scientific or technical base,” Aznar observed. “Our problem is the lack of stimulus for business initiatives, which is key to North America’s success.”

Referring to this week’s announcement of a merger between AOL and Time Warner, Spanish Industry Minister Josep Pique said, “This shows the way we will have to go in Europe.”

Cultural and Economic Differences in Europe

Europe has long been stymied by vast differences among cultures and languages that inhibit the growth of uniform technological advancements. In December, however, the European Commission announced its “eEurope plan” that intends to spread Internet access to all Europeans over several years.

For its part, Spain believes that the eEurope plan will take too long, since the pace of technological change is so rapid. Spain, therefore, decided to spend $3 billion over the next three years to provide its citizens with Internet access.

Europe’s Advantage Over the U.S.

With regard to Internet use and the potential of widespread e-commerce, Europe excelled over the U.S. in only one category. Mobile phone use in Europe has become far more prevalent than in the U.S., with a new generation of Internet-ready phones already introduced.

Phones are already commonly used in some countries to make purchases from vending machines, gas stations and other consumer outlets.

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