Online Malls and Discount Retailers: The Future of E-Commerce?


Despite a tough third quarter for the retail industry as a whole, the latest online retail data from the US Census Bureau confirms that business-to-consumer e-commerce continues to see significant growth. Compared with the third quarter of 2001, online retail sales for Q3 2002 saw 34% year-over-year growth, while online retail sales increased by 7.8% sequentially when compared with the second quarter of this year.

Nonetheless, just 1.3% of all US retail sales were concluded online, according to the US Census Bureau, leaving plenty of room for further growth in the future. Forrester Research, for example, estimates that as much as 8% of retail sales will be transacted online within the next five years. The question is, who is going to benefit most from this anticipated growth?

According to data from Nielsen//NetRatings, online shoppers continue to flock to eBay, which received more than 10 million unique visitors during the week ending 20 Octoberh alone. eBay’s gigantic consumer-to-consumer marketplace has continued to expand this year, with strong growth coming from its eBay Stores division that permits large and small retailers alike to hang their shingles at eBay’s online mall.

Other leading online shopping destinations include, Yahoo! Shopping and MSN Eshop, all of which offer a wide range of products from several manufacturers and retailers.

And just like eBay, these websites have also evolved to become more like virtual shopping malls, where “anchor tenants” are prominently featured, typically with links to their separate online storefronts. Consumers enjoy the convenience of one-stop shopping, with the added benefit of having a single online shopping cart and virtual wallet, through which they may pay for purchases from multiple retailers at one time. (segue)

By Steve Butler

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