Internet retail boom predicted to close out this year

By Greg Wiles
Bloomberg News Service

SAN JOSE, Calif. — Internet sales will rise 48 percent worldwide in the fourth quarter, led by growth in Europe, according to Gartner Inc., a market research company focusing on the computer and communications industries.

Online sales of goods will increase to $38.2 billion from $25.7 billion in the same period a year earlier, said David Schehr, research director for Gartner's GartnerG2 unit. European sales will grow by three quarters to $15.8 billion. Sales in the United States and Canada will gain 32 percent to $15.7 billion.

The growth will come as more Europeans use the Web to purchase from mail-order companies, Gartner said. Convenience and growing Web use will contribute to the U.S. increase, Schehr said.

"The Internet is becoming a mass-market channel," Schehr said. "It's not the realm of techno-geeks any more. Joe and Jane Consumer are going online."

Other firms also forecast an increase in U.S. online sales. Jupitermedia Corp.'s Jupiter Research says U.S. spending will rise by 17 percent to $11.2 billion this year. Amazon.com Inc., the largest Web retailer, is projecting a fourth-quarter sales increase of up to 28 percent to $1.43 billion.

The European increase is fueled by companies integrating their mail-order catalogs and Web pages, Gartner said, noting that Next Plc, the U.K.'s third-largest clothing retailer, and U.K. toy-seller Hamleys Plc have been among the companies successfully selling on the Internet.

Sales in Japan will increase by 38 percent to $1.93 billion. Sales in other Asia and Pacific countries are expected to swell by 35 percent to $3.32 billion. Sales in the rest of the world will increase 54 percent to $1.52 billion, Gartner said.

The forecast excludes travel-related purchases and sales of movie and event tickets.