E-commerce's growth is accelerating

[April 18th 2002]

E-commerce as an industry is accelerating, not maturing or decelerating, according to new quarterly numbers from BizRate.com. The just-ended first calendar quarter of 2002 revealed year-over-year online retail sales gains of 41.1% to $11.60 billion versus Q1 2001's $8.22 billion.

This first quarter increase of 41% beat the last three quarters: fourth quarter 2001, which includes the holiday season, grew by 34.5% year over year; third quarter 2001, which was impacted negatively for two weeks from the terrorist attacks, grew at a 19.6% rate; and second quarter 2001 increased by 21.3% versus the prior year. Unmistakably, the online sales growth is up and accelerating as consumers take a stronger affinity to the convenience of online sales, both at work and home.

Contributing to the increased sales is both a greater volume of orders and higher price points per transaction. Online orders grew by 33.9% this past quarter from 68.29 million purchases in Q1 2001 to 91.47 million in Q1 2002. The average online sale in Q1 2002 was $127 per purchase, up 5.3% from Q1 2001's $120.

"There is a still a perception that online industries are faltering, but this is actually the reverse with online retail sales. The trend shows that consumers love buying online and are shifting their purchases from offline to online -- and at ever-increasing levels -- even though their overall spending might not be growing," said Chuck Davis, President & CEO of BizRate.com.

"While a 35% growth rate for e-commerce during the busy fourth quarter season was reason to celebrate," Davis said, "it looks like more champagne needs to be uncorked for this quarter's 41% growth rate. It proves that there is unabated enthusiasm to the 24-by-7 convenience of shopping online, despite the warm winter which probably let shoppers spend more time away from their computers."

Due to the outstanding performance of Q1 online sales, BizRate.com is increasing its estimate for 2002 total online retail sales from 26% to 44%. Total online retail sales, which were $28.91 billion in 2000 and grew by 24% to $35.87 billion in 2001, are now forecasted to be up 44% to $51.48 billion in 2002. BizRate's previous 2002 estimate announced in October was for a 26% increase to $45.22 billion.

"The recession neither penetrated as deeply nor lasted as long as everyone predicted," Davis said. "Furthermore, the growth of e-commerce bucked the whole downward trend and therefore has already come out of the gates stronger than most other industries. "BizRate had forecasted a 27% growth rate for Q1 2002, which instead came in at 41%. Online sales in 2001 grew by 24% versus 2000, so the new prediction of 44% is that much more dramatic."

Davis also attributed this growth to the power of information online and the consumer's desire to research pricing online. "Comparison shopping becomes addictive for shoppers," he said. "Shoppers like price shopping, and once they see the power of pricing information available online, they return to buy more online knowing they can always get a great deal from a great merchant."

Year-Over-Year Online Retail Dollar Sales
Percentage Growth By Quarter

     Q2 2001                        21.3%
     Q3 2001                        19.6%
     Q4 2001                        34.5%
     Q1 2002                        41.1%

Links
BizRate.com		http://www.bizrate.com