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Monday, 16th January 2012, 16:50:55
Will ecommerce businesses continue to thrive in 2012?
Ecommerce companies reportedly saw a huge surge of traffic over the festive period of 2011, with figures showing that online spending on Christmas Day and Boxing Day escalated above £300 million. However, now the holiday season is over, will e-shopping continue to grow in 2012?
According to Ashish Gupta, senior managing director and co-founder of Helion Ventures, which invests in high growth technology, the success of ecommerce has surged in the past two years alone and businesses have continued to adapt their services to the online consumer market, as well as branch out with existing platforms to cater to those who prefer to spend money via the internet.
Speaking to Forbes India magazine, Mr Gupta said: "In two years, the ecommerce number has moved from nothing to a billion dollars per annum. This is pretty compelling growth. You are seeing real money now."
He added that in areas of Europe, the US and Latin America, the world of online shopping is thriving and this is expected to remain so throughout 2012 and beyond. However, he also explained that e-commerce in India is still in its early stages and this will be where the largest growth is seen.
"One of the things that you'll see in 2012 is the separation of the men from the boys as some of them mature and others die. All the companies will feel the heat. Several of them will have to start scaling. The skills they need to scale are different from the skills they needed to enter the fray," the expert commented.
"To get to the point where one has got credibility, companies have to go through a lot of heartache. For smaller companies, that is going to be even harder."
Mr Gupta compared the fundamentals of the hype around ecommerce to that of the internet buzz between 1999 and 2000. He explained that in order to keep the excitement and steady business levels going, companies must constantly look to how they can maintain and improve their sales through online platforms.
Although the outlook for the next 12 months looks promising, retailers may first need to regain strength after a large quantity of Christmas gifts were returned in the weeks after Christmas.
Reuters reported that January 3rd was set to mark an all-time high for online returns being processed.
Predictions showed that couriers returning goods to online retailers would see an eight per cent rise in the number of packages handled in comparison to the same time last year.
Ken Burkeen, marketing director of the retail and consumer products division at UPS, said: "This will definitely be the busiest year for returns."
This could be in line with the boost in ecommerce activity prior to the holiday period, when it was estimated that sales were up by around 15 per cent between November 1st and December 26th in comparison with the same time in 2010, according to figures from market watchdog comScore.
Dave Bird, managing director of Webtistic.co.uk, an internet marketing company comprising qualified and experienced consultants, recently suggested that the market for ecommerce businesses is set to become increasingly competitive as time goes on.
He explained that companies should carefully assess their feasible output and budgeting levels before embarking on a project to go digital in order to succeed against competitors in the same field.
Consumer traffic will come to a website as long as the needs of online shoppers are met, Mr Bird concluded.
Posted by Phil Williams
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Categories: | Ecommerce |
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