Online spending to rocket, says IDC

New Zealand's online spending is set to explode to $21 billion by 2004 according to research firm IDC.

New Zealand’s online spending is set to explode within four years.

Analyst firm International Data (IDC) issued the prediction at its annual Directions conference in Auckland last week. Senior researcher Mark Cribbens says the country spent about $2 billion online in 2000 but that will rocket to $21 billion by 2004.

The figures for 2001 to 2003 are approximately $4 billion, $6.5 billion and $12 billion respectively.

In 2000, spending was split roughly 50:50 between e-procurement and e-distribution. Cribbens says larger firms are doing much in these areas. Marketplaces took a tiny 5% share last year. However, they will take off the quickest in coming years, says IDC, so by 2004 each market will account for about a third of spending. New Zealand has several marketplaces, including OneZone, SupplyNet and SouthFresh, and more are planned.

B2B commerce will grow from just over $1 billion last year to around $16 billion in 2004. B2C commerce will grow from several hundred million to just under $5 billion in the same period. Cribbens says the growth of e-commerce will be driven by the prospect of lower costs and lower prices than via traditional sales channels, improved supply chain management and access to new markets. However, its further adoption is being inhibited by company inexperience and a lack of case studies and standards, as well as integration and security issues.

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