Internet take-up in Australia hit a robust 40 percent last year, with an increase of 1.89 million users taking to the Net. It was also a year that taught the dot-com sector many lessons.
According to an IDC study just released, adoption of the Internet grew to 7.4 million people in the last 12 months and the significant lessons learned last year will ensure the continued growth of the sector in Australia.
Despite last year's business-to-consumer (B2C) failings, IDC predicts e-commerce will experience a 116 percent growth in spending between 1999 and 2004.
According to the report - "Lessons Learned in 2000" - spending in the sector reached US$2.9 billion in 2000. It's estimated the market will be worth well over US$37 billion within three years.
"With some high profile failures creating a lot of doom and gloom [in 2000], the new bricks and mortars business model looks more positive. With the changing business models, e-commerce spending is sure to grow," IDC's Senior analyst Lisa Shishido said.
Furthermore, the business-to-business (B2B) sector is set to grow even faster than B2C, with a rise of 144 percent spending in the next five years.
"There has been a lot of smoke and no fire [in the B2B sector] so far in Australia because they have been in the planning and implementation stages and there hasn't been so much trading going on," Shishido said.
According to Shishido, in the years to come, B2B spending will increase dramatically, surpassing B2C.
Not for Free
Further lessons learnt in 2000 included the shake-up of the free service provider market, with Web sites becoming more creative in terms of creating revenue.
Relying on advertising to offer Internet access for free is no longer viewed as a viable business model, according to Shishido.
"It's not free to produce content, so services can't provide it free anymore," Shishido said.
E-commerce also failed to capture the SME market, with many small businesses seeing the transition as too costly and complicated.
However, according to Shishido, 2001 will see a rapid growth in SME's going online and becoming e-commerce enabled.
"There is more education out there about the benefits of having an e-commerce business model, we'll see more take-up in 2001," Shishido said.
Privacy concerns
Privacy and security continues to hinder customer performance online, with a number of Web sites still not having a clear privacy policy of how users' information will be used and protected according to Shishido.
"This is still an issue for a lot of individuals," Shishido said.
