Europe Still Sees E-Gold Ahead  

by Steve Kettmann <mailto:[log in to unmask]>  3:00 a.m. May. 24, 2000 PDT 

>From WIRED NEWS

BERLIN -- Boo.com's demise may have spooked Internet businesses all over
Europe, but on the opening day of this week's Internet World trade show at
the Berlin Messe, giddy talk of big growth still dominated.  "By no means
does boo.com declaring bankruptcy mean that consumer demand will slow as
well," Nicole Vanderbilt, a vice president of the e-commerce analyst Jupiter
Communications, said at a workshop on the opening day of the three-day
event.   

In fact, Jupiter predicts that the total number of money spent on European
e-commerce will rise from 2.9 billion euros ($2.6 billion) last year to 64.4
billion euros in 2005. 
That is just the sort of rosy talk that makes an event like Internet World
tick. There are more than 350 exhibitors covering 21,000 square meters,
compared to 300 exhibitors spread out over 15,000 square meters last year. 
But this is not an event designed for the public, like the massive CeBIT
computer fair in Hannover every year. Internet World expects only 1,600
convention attendees this year -- compared to 26,000 "professional visitors"
-- and the tone is appropriately boosterish. 
"ALL IMPORTANT DECISIONS REGARDING THE INTERNET ARE MADE IN BERLIN,"
declares the Internet World website
<http://www.internetworld-messe.de/messe.2000/2k.en/fs_messe.htm>. 
"To develop the perfect Internet website, a business has to find the right
partners," goes the pitch. "Internet World Berlin 2000 provides that latest
knowledge on the Internet more concentrated than any other German trade
fair." 
Schmoozefests have their place in business, of course, and the mood still
seems to be get-while-the-getting-is-good. That's true despite the example
of boo.com, the British online sportswear retailer. It was seen as one of
the bright stars of Europe's startup scene until announcing last week it was
being liquidated just six months after launch. 
"Certainly, the capital markets are starting to fall out of love with their
once-poster childs," Vanderbilt said. 
But the next few years still promise to make a lot of fortunes, she said, as
long as dot coms are willing to learn some lessons both from outfits that
fail, like boo.com, and from traditional businesses. 
Her company researched European e-commerce and produced surprising results
on how companies were doing in the all-important area of fielding customer
complaints. Jupiter emailed 69 European companies with standard
customer-service questions, and found that nearly half (46 percent) either
never responded or took five days or more. Fewer than a third (30 percent)
responded within one day. 
"This is a huge symptom on the Internet," Vanderbilt said. 
It's also part of a larger pattern, she said, in which Internet companies
have focused too much on marketing without spending time on retaining
customers and building relationships with suppliers. 
It takes time to build an online customer base, Jupiter said, since the
longer people have been using the Internet, the more likely they are to buy
online. 
The figures from the United States are striking. Among people who have been
online for less than a year, 24.9 percent have made a purchase using the
Internet. The percentage jumps to 56 for those who have been online two
years or more. 
Given the lower number of Internet users in Europe, those are important
numbers because Jupiter says the gap is narrowing. The firm predicts that by
2003, 41 percent of Europeans will shop online, compared to 54 percent in
the United States. 




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