From...

July 9, 1999
Web posted at: 9:50 a.m. EDT (1350 GMT)

by Nancy Dillon

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(IDG) -- Worldwide e-commerce revenue will grow from $98.4 billion in 1999 to $1.2 trillion by 2003, with the U.S. continuing to generate a majority of e-commerce dollars, according to a new report from New York-based eMarketer.

"One of the things that we realized with the report is the degree to which the U.S. is steamrolling over the rest of the world in terms of e-commerce,'' said Geoffrey Ramsey, statsmaster at eMarketer.

Ramsey said e-commerce transactions in the U.S. reached $29 billion last year. This number is expected to grow to $98.4 billion this year and to $1.2 trillion next year.

Germany had the second-highest level of e-commerce revenue with $1.5 billion last year. Germany's projected e-commerce revenue for this year is $4.4 billion.

"One of the reasons for [U.S. e-commerce dominance] is that the U.S. has many more users than most countries,'' Ramsey said. "What we've seen is that there has to be a critical mass of people online in a given country before e-commerce really kicks in.''

Critical mass, according to eMarketer, is between 10% and 20% of a country's adult population.

"At that point, e-commerce starts to become a viable opportunity for business and we see a snowball effect,'' he said. A few businesses put up some interesting e-commerce sites, these sites attract more users to the Internet, and the new users, in turn, attract more e-commerce vendors, he said.

Some examples of countries now on the brink of this "snowball'' threshold are France, Sweden, the Netherlands, Australia and Italy, Ramsey said.