Technology

E-commerce benefiting from economic crisis, says OECD

10.11.2009
While the Irish and global retail sector is being pulverised by the ongoing recession, a new report from the Organisation for Economic Co-operation and Development (OECD) shows that e-commerce has fared well during the economic crisis and has seen continuing growth in many countries.

According to the ‘Empowering Consumers in E-Commerce’ report, part of the reason for the improved fortunes of e-commerce is that as consumers have become more cost-conscious, they are increasingly going online to compare products and save money.

In the US, for example, while most sectors were experiencing a downturn in the first quarter of 2009, online retail sales for 80 retailers rose by an average of 11pc.

Similarly, the French electronic commerce and distance selling federation estimated that for the first quarter of 2009 e-commerce sales grew by 26pc and should increase throughout the year by 20pc to 25pc.

The report also notes the importance of broadband connections plays in e-commerce, citing the fact that in both Ireland and Finland, internet users having a broadband connection were almost twice as active in buying online as those not having broadband access.

Businesses selling to other businesses online
The report also says that the crisis is driving more businesses online, attracted to the internet as a means to increase visibility and markets at relatively low cost.

And business-to-business (B2B) e-commerce makes up the lion’s share of online sales - in the US, B2B generated US$3.1 trillion in sales in 2008 compared to US$130bn in sales to consumers.

Looking ahead, the report warns that although e-commerce will keep growing, business and governments will need to do more to strengthen people’s trust in buying online.

While the OECD says that most countries have e-commerce laws and regulations, the speed with which new technologies help create new products and services can mean that those laws and industry best practices are or will quickly become outdated.

The increasing use by business of behavioural advertising techniques which track online behaviour to tailor advertising to consumers’ interests is also under government scrutiny, the OECD said.

To read the OECD’s ‘Empowering Consumers in E-Commerce’ report, visit www.oecd.org/dataoecd