Ireland's B2C E-Commerce Industry Lagging Behind

by Amanda Banks, Tax-News.com, London

07 August 2001

A report was released last week by Amárach Consulting with the conclusion that the growth of e-commerce in Ireland is being hampered by the fact that 63 per cent of the population do not possess credit cards as well as a lack of alternative payment systems amid security concerns.

Entitled "Eir-Commerce 2001" the report presents an overview of the current state of Ireland's B2C market as well as a forecast for its future development. Although Internet useage in Ireland has doubled over the last two years and this has been matched by the number of people buying online, the report says that future growth will not continue at this rate.

'The slowdown in Internet take-up is being driven by a number of factors. Internet use at work has almost reached saturation levels and little additional growth will come from first-time users accessing the Internet at work,' said Bettina MacCarvill, Senior Consultant at Amárach. 'In addition, many people continue to see the Internet as having no relevance to them and they are simply not interested in using it. Our research found that an estimated 47% of Ireland’s adult population say they will never go online. The Internet is failing to take-off among the over 50s and among a majority of those in C2DE households. The digital divide is not receding.'

Amárach estimates that the value of Ireland's consumer e-commerce market will be close to £100 million (EUR127mn) this year, rising to £260 million (EUR330mn) in 2003. This represents a downward revision of forecasts released last year. Forecasts have been downgraded because - despite the impressive level of growth in numbers buying online - the simple truth remains that the vast majority of Internet users are not buying online, nor do they have any intention of starting to buy online in the near future.

Gerard O'Neill, Managing Director of Amárach Consulting, said: 'The downgrading of forecasts is not due to any underlying economic slowdown. It is a result of lack of alternative payment systems, continued lack of confidence in the security of buying online and a lack of relevant online propositions that target the wider consumer market. Internet use is concentrated among young people, who for the most part don’t own credit cards and therefore cannot buy at the vast majority of websites. Older Internet users, especially 35-49 year olds are still dogged by security concerns. And there are few online offerings that hold real appeal beyond small niche markets. Overall the future outlook for Ireland’s online consumer market is good, but not spectacular.'

According to the report there are 895,000 Irish adults currently using the Internet, 15 per cent of which are active e-commerce users with travel being the most popular reason behind electronic purchases. Further details of the report can be found on Amárach's web site at: http://www.amarach.com

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