U.S.: E-Commerce Up 24 Percent in Q2

E-commerce sales hit US$10.2 billion in the second quarter, a 24 percent increase over last year’s levels, according to data collected by the U.S. Department of Commerce (DOC).

The quarter was the second best recorded since the Census Bureau began releasing estimates of online sales in the fourth quarter of 1999. Only the final three months of 2001, when sales fueled by the holiday season hit $11.5 billion, saw more online activity. The government data does not include online travel sales, one of the largest and fastest-growing online industries.

E-commerce did lose a little ground, in terms of growth, to overall retail . While retail grew 11 percent between the first and second quarters, e-commerce recorded just a 3.7 percent sequential gain. That reversed a trend in which e-commerce grew much faster than overall retail in late 2001, when online sales rose 13 percent and retail grew just 5 percent.

Second Verse

In the second quarter, e-commerce sales accounted for 1.2 percent of all retail activity, up from 1 percent a year ago.

The DOC noted that the numbers are not seasonally adjusted and are subject to future revision. Because they are based on statistical modeling, the figures also have a margin of error of plus-or-minus 1.4 percentage points.

Still, the numbers seem to paint a fairly positive picture for e-commerce, which is gearing up for what is always its most critical stretch, the final months of the year, when holiday shoppers traditionally push online sales to new highs.

Second Opinion

The figures come on the heels of a report from comScore that showed steady double-digit growth for online sales. ComScore, which purchased the Web measurement assets of Media Metrix this summer, estimated July e-commerce sales of $6 billion, representing a 26 percent uptick from the same month in 2001.

Lisa Strand, director and senior analyst at Nielsen//NetRatings (Nasdaq: NTRT), told the E-Commerce Times that online sales continue to see steady growth, not just in the United States but in many corners of the globe. She noted, however, that quarter-to-quarter estimates can be problematic.

"The more important numbers are year-to-year growth, and those have been showing double-digit growth for quite a while," Strand said. "It's gaining acceptance, and people who have tried are coming back again and again."

But the government's numbers are becoming an increasingly important benchmark. Many firms that once tracked each and every e-commerce move have taken a more long-term view, tracking only holiday sales or reporting infrequently on trends in the online arena.

That has left government data, along with quarterly reports and forecasts from major e-commerce companies, to serve as the best barometers of where e-commerce has been and where it might be headed.

Trend Lines

The Census Bureau bases its estimates on a random sample of 11,000 retail firms chosen to mirror the makeup of the 2 million U.S. firms engaged in retail sales.

Not surprisingly, the Bureau has tracked a steady increase in online sales since it began taking e-commerce's pulse. Sales grew from $5.7 billion in the fourth quarter of 1999 to $6.1 billion early in 2000, $6.7 billion in the second quarter of 2000, $7.6 billion in the third quarter and $9.9 billion in the fourth quarter of that year.

In 2001, quarterly figures first slumped and then shot skyward, with $8.7 billion in e-commerce sales in the first quarter, $8.5 billion in both the second and third quarters and $11.5 billion in the fourth quarter.