The internet is continuing to boom in Europe but consumers are still wary of spending online, an NOP survey has revealed. This year's boom in free internet access providers and improved web content for European viewers means 17% of the British population is now online, compared with 16% in Germany and 13% in France. But the New Mass Medium report shows many users are wary of spending money, with only one in four net users having made a purchase online.
This is despite the fact that there have hardly been any instances of credit card fraud resulting from run-of-the-mill online trading. The boom in access to the web has coincided with a sharp rise in the number of UK start-up companies formed to exploit the enormous potential of web trading. Freeserve, part of Dixons, confirmed in the past week that it is likely to become Britain's first billion pound internet company when it is floated in the near future while QXL, a British rival to America's eBay online auction house, is hoping to be valued at up to £500m when it starts selling shares in September.
Funmail, an email service allowing users to choose up to 25 domain names to reflect different moods or occasions, will also be floating in a few weeks time even though it was launched only two months ago. The company claims that new registrations are growing at the rate of over 1,000 a day. Boo.com, the UK based net clothes company, is planning to launch in a few weeks time. Lastminute.com which offers cheap deals on "vanishing inventories" like airline tickets and hotels recently raised $10m to expand in Europe and the US.
Among numerous others that have started up recently is confetti.co.uk which provides wedding services online. A further sign of burgeoning entrepreneurial activity is that First Tuesday, a newly formed club to encourage networking among media and web companies, had to turn hundreds of people away from its July meeting this week because it could not cope with more than 250 people at its central London venue. Even people with invitations were turned away when the club was forced to close the doors.
US companies are generally reckoned to be at least two years ahead of British companies in the exploding field of e-commerce but there are some areas - like free internet service provision and wireless technology for telephones where Europe is setting the pace. Ramona Liberoff, an executive consultant for one of the NOP report's sponsors, KPMG, says that it is important for retailers to provide as much information on their products as possible. The report showed that 77% of UK users had researched purchases on the internet, even if only 25% then bought a product online. "People want as much information as possible," says Liberoff. "Some 42% of people in the UK say they would be encouraged to do online shopping if there were more pictures. That's quite a simple thing to do." Liberoff also suggests that after users have experienced e-commerce once, they are willing to go back for more.
"Once people try it once, they express that they're quite satisfied and would definitely do it again. So as long as someone can test it out, not see anything suspicious on their credit card bill, the thing arrives in the post and it's exactly what they wanted, they then suddenly becomes converts to e-commerce. "And we should keep in mind that some things are not appropriate to buy online, or that the facilities to do so are not there yet, so we shouldn't imply that people are not happy doing so yet," she added. "It may be that the facilities are not there yet, or that it's not a particularly sensible thing to transact for a car over the web yet, for example.
"Some categories are ideal for users to do research and go right up to the point of transaction and get rid of all the hassle waiting for brochures and everything else. "If you look at the fact that 58% say they would be encouraged if transaction security was guaranteed by a major financial institution, I would say that people expect the same guarantees on the web as they do in real life. "When they're using a credit card in a shop, they know that Visa or Amex guarantees purchases up to a certain amount. They're expecting that on the web."
