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A survey released today by the Office for National Statistics shows the increasing popularity of e-commerce among businesses, with a massive rise in online sales volumes last year.

The ONS e-commerce survey, based on results from businesses with 10 or more employees, shows rapid growth both in the use of Information and Communications Technologies, and the value of trade over the internet.

The total value of internet sales by businesses reached £103.3 billion in 2005, a rise of 56% from the 2004 figure of £66.2 billion. The survey showed that businesses are making more and more use of ICT.

Other key findings of the survey included:

• 14% of all businesses traded over the internet in 2005; a rise from 12% in 2004.

• 56.3% of businesses made purchases via the internet, compared with 50.3% in 2004.

• Internet purchases by businesses rose by 50.4%; from £48.4 billion in 2004 to £72.8 billion.

• 69.8% of businesses had a website in 2005, a rise from 66.9% in 2004.

Contrary to previous assumptions that succesful online retailers would be those who operate only on the internet, growth in online sales is also driven by high street retailers and supermarkets who have increasingly moved into the online market.

John Lewis’ online store, John Lewis Direct, increased its sales by nearly 70%, and is now the company's second-largest 'store' after its flagship outlet on Oxford Street.

Tesco.com saw its sales rise by 28.7% in the first half of 2006 to £554 million. It now processes more than a billion pounds of sales a year.

Research has shown that an online presence can drive offline sales volumes, with, for example, 34% of consumers shopping online prior to an offline presence. We also know that consumers like to research before the purchase - a DoubleClick study has shown that 60% of sales are influenced by internet research, via search engines.

Businesses who are yet to trade online, including some major high street players, should take a good look at these figures.

Further Reading:
Internet Statistics Compendium - September 2006

Graham Charlton

Published 13 October, 2006 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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