E-Commerce Statistics: Explanation and Sources

E-Commerce Statistics: Explanation and Sources

Order Code RL31293
Report for Congress
Received through the CRS Web
E-Commerce Statistics: Explanation and Sources
Updated June 4, 2003
Rita Tehan
Information Research Specialist
Information Research Division
Congressional Research Service ˜ The Library of Congress

E-Commerce Statistics: Explanation and Sources
Summary
The value of e-commerce transactions, while still small relative to the size of
the U.S. economy, continues to show strong growth despite a recent economic
downturn. Congress will play a vital role in many e-commerce policy issues,
including Internet taxation, encryption and electronic authentication (i.e., digital
signatures), intellectual property protection (i.e., patent or copyright infringement),
computer network security, and privacy safeguards for individuals and organizations,
as well as consideration of
how European Union (EU) and World Trade
Organization (WTO) policies may affect U.S. e-commerce activities
While e-commerce growth is widely discussed, until recently it had remained
largely undefined and unrecognized in official economic statistics. Establishing
relevant and consistent working definitions is a critical first step in developing useful
measures for e-commerce. The Bureau of the Census initiated an aggressive program
in 2000 to begin filling the e-commerce data gap. In addition, the Bureau of
Economic Analysis (BEA) is involved in measuring the new economy. BEA is
studying the impact of the digital economy, to determine whether these changes
should be captured in gross domestic product (GDP) and other economic accounts
estimates. In February 2002, the Economics and Statistics Administration (ESA) of
the U.S. Department of Commerce released Digital Economy 2002, its fourth annual
report on the impact of information technology on the structure and performance of
the U.S. economy. Among other findings, the report concluded that while early
observers thought online versions of businesses would replace their real-world
“bricks and mortar” counterparts, nothing approaching this degree of transformation
has occurred.
The Census Bureau, the BEA, and ESA face a number of obstacles to providing
accurate forecasts of electronic commerce. These include categorizing retailers who
appear, disappear, or change products with dizzying regularity. There are hurdles in
collecting data from e-commerce companies and in projecting data from survey
respondents so that it represents the entire universe of e-commerce spending.
Private consulting firms and research and polling firms that provide estimates
of the impact of the Internet on consumers and business, such as Nielsen and Gallup
have also entered the field, along with new types of companies, such as Forrester
Research, Gartner Group, Jupiter Communications, International Data Corporation
(IDC), and Nielsen/Net Ratings.
There is much debate over which Web
measurement company’s methods are more accurate. The research firms disagree
among themselves about sampling methods and panel selection, and differing
methods of identifying and soliciting the survey participants result in different data
interpretations.
This report addresses the complexities of measuring e-commerce growth and
provides background information on government and private firms’ methods for
estimating it. This report will be updated periodically.

Contents
What Is E-Commerce? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Complexities of Measuring E-Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Difficult to Define . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Other Measurement Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Government Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bureau of the Census . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bureau of Economic Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Economics and Statistics Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Consulting and Research Firm Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Recent E-Commerce Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Selected Web Addresses for E-Commerce Statistics . . . . . . . . . . . . . . . . . . 11

E-Commerce Statistics: Explanation and
Sources
What Is E-Commerce?
Electronic commerce (or e-commerce)—i.e., business processes which shift
transactions to the Internet (or some other nonproprietary, Web-based system)—is
growing at a rapid rate. The value of e-commerce transactions, while still small
relative to the size of the U.S. economy, continues to show strong growth despite a
recent economic downturn.
More significant than the dollar amount of these
transactions, however, are the new business processes e-commerce makes possible
and the new business models it is generating. Many new Internet-based companies
and traditional producers of goods and services are working to transform their
business processes into e-commerce processes in an effort to lower costs, improve
customer service, and increase productivity, with varying degrees of success.
Congress will play a vital role in many e-commerce policy issues, including
Internet taxation, encryption and electronic authentication (i.e., digital signatures),
intellectual property protection (i.e., patent or copyright infringement), computer
network security, and privacy safeguards for individuals and organizations, as well
as consideration of how European Union (EU) and World Trade Organization
(WTO) policies may affect U.S. e-commerce activities.
Complexities of Measuring E-Commerce
Difficult to Define
While e-commerce growth is widely discussed, it remains largely undefined and
unrecognized in official economic statistics. Establishing relevant and consistent
working definitions is a critical first step in developing useful measures for e-
commerce. Policymakers, industry, and the media use a variety of methods to
capture digital or electronic economic activity. Moreover, these terms often are used
interchangeably and with no common understanding of their scope or relationships.1
It is difficult to determine if all the dimensions of what is occurring in
e-commerce can be identified. For example:
1 Barbara Fraumeni, Marilyn Manser, and Thomas Mesenbourg, Government Statistics: E-
Commerce and the Electronic Economy, U.S. Census Bureau, June 15, 2000, at
[http://www.census.gov/econ/www/ecomm2.htm].

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! How is business-to-business (B2B) and business-to-consumer (B2C)
e-commerce impacting the accuracy of labor surveys?
! What are the goods and services choices, characteristics, and prices
offered?
! How difficult is it to track international transactions as well as
business costs and productivity?2
Other Measurement Challenges
E-commerce businesses pose additional measurement challenges.
These
businesses can quickly expand their product line, adding new goods and services,
even entering into entirely new kinds of activities, much faster than their retail and
wholesale brick-and-mortar counterparts.
Additionally, the characteristics and prices of e-commerce products may not be
the same as those sold in retail brick-and-mortar outlets or through wholesalers. For
example, the Consumer Price Index (CPI) and resulting real personal consumption
measures do not capture all aspects of consumer benefits from B2C transactions.
E-commerce retail purchases may involve particular amenities for the consumer
(such as convenience of shopping from home, added information that is available on
the product, or lower prices) or deterrence (such as frustration at lengthy downloads,
not being able to examine an item, or service deterioration).
These are the types of factors that are not captured in general in measures of
prices and real gross domestic product (GDP). It is not clear that these sorts of
problems are greater for e-commerce than for other activities, nor even that they do
not in general balance out. In the area of B2B e-commerce, improved speed and
convenience may result in lower costs and higher productivity, but may not be
reflected in the measured characteristics or effective prices of the goods and services
exchanged or in measures of real output.3
Another controversy centers around the ability to measure Web use for e-
commerce in the workplace. According to the Current Population Survey conducted
by the U.S. Census Bureau in September 2001, 72.3 million individuals used a
computer at work, accounting for 53.5% of total employment.4 A private market
research firm estimated in August 2001 that 66% of U.S. workers have access to the
Internet at work;5 and, according to a December study by the Nielsen/NetRatings
research firm, half of all online purchases in the United States in November 2001
2 Ibid., Government Statistics, section IIB.
3 Ibid.
4 “Computer and Internet Use at Work in 2001,” Monthly Labor Review, Feb. 2003, p. 26.
5
Xylo Inc., “Internet Usage in the Workplace,” press release, Aug. 21, 2001, at
[http://www.xylo.com/press/pr082101.htm].

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were done from the workplace.6 Companies are notoriously reluctant to place Web
measurement software on their workers’ computers.7 Privacy and the protection of
proprietary business information would most likely have to be resolved before this
could become a common measurement tool.
Government Estimates
Bureau of the Census
The Bureau of the Census initiated an aggressive program in 2000 to begin
filling the e-commerce data gap. During the summer of 1999, the Census Bureau
developed definitions and concepts to describe the digital economy, identifying three
components: electronic business, electronic commerce, and e-business infrastructure.
In order to begin measuring e-commerce, data were collected in four Census Bureau
surveys: the Annual Survey of Manufacturers, the Annual Trade Survey, the Service
Annual Survey, and the Annual Retail Trade Survey. In the fall 1999, the Bureau
added two questions to its monthly retail trade survey of 8,000 retail firms: whether
the firms were selling online, and if they reported affirmatively, what was the dollar
volume of their e-commerce sales. The Bureau developed a new Internet site—U.S.
Department of Commerce E-Stats [http://www.census.gov/eos/www/ablut.html],
devoted to “measuring the electronic economy” with data reports, information on
statistical methodology, related data program links, and e-commerce contacts.
Statistics. In March 2001, E-Commerce 1999 was posted to the E-Stats site,
providing the first official data on e-commerce activity for key sectors of the U.S.
economy. In March 2002, an E-Stats analytic report, Detailed Tabulations of
Manufacturing E-Business Process Use in 2000,8 presented tabulations of responses
by more than 38,000 manufacturing plants to 39 detailed questions about e-business
process use at their plants. In March 2003, an E-Stats analytic report, E-Commerce
2001, provided an official snapshot of e-commerce for key sectors of the economy
(manufacturing, merchant wholesalers, retail trade, and service industries).9
The first official retail e-commerce estimates were released on March 2, 2000,
covering the fourth quarter 1999. This retail sales report provides a tally of retail
6
Nielsen//Net-Ratings, “Nielsen/Net Ratings Announces Top E-Tailers, Led by
Amazon.com,” press release, Dec. 19, 2001, at
[http://www.nielsen-netratings.com/2001_Holiday/holiday_release.jsp].
7 Mike O’Leary, “Web Measurers Wrestle with Methodologies, Each Other,” Online, May/
June 1999, p. 106.
8 U.S. Census Bureau, Detailed Tabulations of Manufacturing E-Business Process Use in
2000,”
Mar. 1, 2002, [http://www.census.gov/eos/www/papers/finalv7text.pdf]. The
tabulated responses are compiled in the Manufacturing 1999 and Mid-2000: Appendix:
Comparing Respondents to the Computer Network Use Supplement to the Manufacturing
Population,” [http://www.census.gov/eos/www/papers/appendixfinal.pdf].
9
U.S. Department of Commerce, “E-Commerce 2001 Highlights,” E-Stats, Mar. 2003,
[http://www.census.gov/eos/www/papers/2001/2001estatstext.pdf].

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sales of goods and services where an order is placed by the buyer or where price and
terms of sale are negotiated over an Internet, extranet, Electronic Data Interchange
(EDI) network, electronic mail, or other online system. The data is collected monthly
but published in quarterly estimates. (The most recent retail e-commerce sales
figures are available at [http://www.census.gov/mrts/www/current.html]).10
In May 2003, the Census Bureau released U.S. retail e-commerce sales figures
for the fourth quarter of 2002.11 U.S. retail sales over the Internet grew by 25.9% in
the first quarter of 2003 compared with the same quarter a year earlier, rising to $11.9
billion. The gain was the smallest year-over-year increase since the 23.5% gain in
the second quarter of 2002, according to the Commerce Department’s quarterly
report on sales of goods and services over the Internet or other electronic networks
or by e-mail. Payment does not have to be made online for the transaction to be
counted. Unlike most economic indicators released by Commerce, the data are not
adjusted for seasonal or holiday-related variations, a limitation that sharply restricts
their usefulness to analysts. Total e-commerce sales for 2002 were estimated at
$45.6 billion, an increase of 26.9% from 2001. E-commerce sales in 2002 accounted
for 1.4% of total sales; e-commerce sales in 2001 accounted for 1.1% of total sales.
This retail e-commerce sales report provides a simple tally of retail sales of goods
and services where an order is placed by the buyer or where price and terms of sale
are negotiated over an Internet, extranet, Electronic Data Interchange (EDI) network,
electronic mail, or other online system.
One analyst concludes, “That is a far cry from the monthly retail reports released
by the Census Bureau, which break down [conventional] sales totals of traditional
retailers by categories like shoes, liquor, and furniture.”12 Census Bureau officials
hope to achieve a similar level of detail with e-commerce reports, but they must
overcome obstacles which have slowed the effort.
First is the issue of how to categorize retailers who appear, disappear, or change
their products with dizzying regularity. For instance, Lee Price, chief economist for
the Economics and Statistics Administration, was quoted as saying, “It’s not just a
question of taxonomy. It’s one of evolving taxonomy. Amazon used to just sell
books. Now they sell a much more varied selection. You have to figure out how to
10 Thomas Mesenbourg, Measuring Electronic Business (Washington: U.S. Bureau of the
Census, 2001), [http://www.census.gov/eos/www/papers/ebusasa.pdf].
11 U.S. Bureau of the Census, “Estimated Quarterly U.S. Retail E-commerce Sales: 4th
Quarter 1999 - 1st Quarter 2003, Census Bureau Reports,” press release, May 23, 2003,
[http://www.census.gov/mrts/www/current.html].
Note: The retail e-commerce data in this report are based on a new sample of retailers that
uses the North American Industry Classification System (NAICS) in place of the Standard
Industry Classification (SIC) system. The retail e-commerce sales prior to first quarter 2001
were restated on a NAICS basis beginning with fourth quarter 1999.
12 Bob Tedeschi, “Government Figures Will Shed Little Light on Holiday Online Sales.”
New York Times Cybertimes, Jan. 10, 2000,
[http://www.nytimes.com/library/tech/00/01/cyber/commerce/10commerce.html].

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capture that.”13 Also, businesses are still developing interactions between brick-and-
mortar establishments and their e-commerce equivalents (for example, Wal-Mart’s
physical stores compete with its Internet presence).
Second, participation in the Monthly Retail Trade Survey is voluntary for e-
businesses. The Census Bureau derived the initial fourth quarter 1999 e-commerce
data from questions asked in its monthly retailing survey, which was sent to
approximately 11,000 retail firms. Of that total, 7,500 companies responded—2,000
of which indicated they were involved with Internet retailing. As in all sampling
surveys, analysts must weigh the data from those who did not respond, just as they
weigh the results of those who responded. In contrast, the Annual Retail Trade
(ART) survey requires participation by businesses. The 2001 ART data provides the
first comparable annual survey and will become the baseline for future quarterly data,
according to the Bureau.14
(It is important to note that the Census Bureau is measuring the overall
“electronic economy” with its E-Stats program, not simply retail sales.)
Industry analysts and executives are hopeful that Census Bureau figures will
provide more reliable information than is now available. This will be important for
seeing long-term trends, but the data will not provide immediate data on Internet
sales. Jack Staff, chief economist with Zona Research, has stated “It’ll take at least
three years for the government data to be highly usable. But there’s a whole segment
of the Internet industry that’s devoted to the numbers, and it’ll be fundamentally
changed once better numbers come along. And that’s as it should be.”15
Bureau of Economic Analysis
The Bureau of Economic Analysis (BEA), within the U.S. Department of
Commerce, is also involved with measuring the “new economy,” which it defines as
the impact of technological innovation over the last several decades, including
electronic commerce. Among the questions BEA is considering are:
! Is e-commerce real, or is it an illusion of measurement?
! Does it represent a fundamental and lasting change in the structure
of the economy, or is it the result of a number of temporary
phenomena?
! Can it be accurately measured?16
13 Ibid.
14 U.S. Bureau of the Census, Annual Benchmark Report for Retail Trade and Food
Services: January 1992 Through March 2003, 2003, at
[http://www.census.gov/mrts/www/data/pdf/annpub02.pdf].
15 Ibid.
16 J. Steven Landefeld and Barbara M. Fraumeni, “Measuring the New Economy,” Survey
of Current Business, Mar. 2001, pp. 23-40, at
(continued...)

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The answers to these questions are important because if e-commerce is real,
structural, and likely to last, then there are major implications for tax and spending
projections, technology policy, and understanding of long-term growth and
productivity. Conversely, if the new economy is not real and is not likely to last,
there are major implications for federal budget projections.
The BEA concludes that the Census Bureau’s estimates provide important
insight into various aspects of the new economy, but a comprehensive examination
of the major issues requires further information on the overall volume of e-business,
as well as its impact on GDP, across products, industries, and regions, and on
incomes and prices.17 BEA is proposing a comprehensive measure of e-business and
high-tech that would measure the new economy in a comprehensive and consistent
fashion. However, without such measures, researchers have attempted to measure
the impact of the new economy using existing BEA estimates—mainly information
from BEA’s national income and product account (NIPA) estimates, its wealth
accounts, its international transactions accounts, and its input-output data (I-O) and
GDP-by-industry accounts.
Economics and Statistics Administration
In February 2002, the Economics and Statistics Administration of the U.S.
Department of Commerce released Digital Economy 2002, its fourth annual report
on the impact of information technology on the structure and performance of the U.S.
economy.18 Among other findings, the report concluded that while early observers
thought online versions of businesses would replace their real-world “bricks and
mortar” counterparts, nothing approaching this degree of transformation has
occurred. “However, despite the large number of dot .com closures that occurred in
2001, this type of business is not in danger of disappearing. [B]usinesses of all types
are still increasing their use of IT [Internet technology] and the Internet.”19
International
Despite widespread use of the term “international electronic commerce,” the
phrase has no commonly accepted definition. Different institutions use the term
“electronic commerce” to describe different things. For example, some definitions
imply use of the Internet, while others define electronic commerce more broadly to
include transactions that involve devices such as facsimile (fax) machines,
telephones, and computer-based systems. However, for measurement purposes, there
16 (...continued)
[http://www.bea.doc.gov/bea/papers/beawide/2001/0301mne.pdf].
17 Ibid., p. 26.
18 U.S. Department of Commerce, Economics and Statistics Administration, Digital
Economy 2002, Feb. 2002, at [http://www.esa.doc.gov/DigitalEconomy2002.cfm].
19 Ibid., chap. 2, The Evolving Online Environment, at
[http://www.esa.doc.gov/pdf/DE2002_CH2.pdf].

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is general agreement that the online commitment to sell a good or service is necessary
for any transaction to be categorized as electronic commerce.20
International e-commerce, as a subset of total e-commerce, generally involves
an online commitment to import or export goods and services. The U.S. government
does not produce an official statistic for the value of international e-commerce.
Current government statistics for e-commerce, drawn only from selected business
sectors (manufacturing, merchant wholesale trade, selected services, and retail trade),
do not distinguish between domestic and international electronic commerce.
Similarly, although statistics on international trade in goods and services cover many
major types of international electronic commerce transactions, these statistics do not
distinguish between electronic and traditional types of transactions.
Different interests in the United States, including consumer groups, businesses,
and various FTC commissioners, have debated the need for more comprehensive
legislation to facilitate consumer use of international electronic commerce. These
efforts involve such issues as coordinating consumer protection measures
internationally, protecting data privacy, ensuring the security of financial information,
and settling concerns about existing payment mechanisms.
To coordinate consumer protection policies, the Federal Trade Commission and
the Department of Commerce collaborate with the other 30 member countries of the
OECD in the Committee for Consumer Policy.
In 1999, the OECD adopted
international guidelines for consumer protection. According to the guidelines, online
shoppers should be afforded protection that is not less than the protection afforded
offline. Although not legally binding, the guidelines provide a blueprint for
governments, the private sector, and consumers about fair business practices online.
The United States also has addressed coordination of international consumer
protection through the Asia-Pacific Economic Cooperation forum. This group of 21
economies from the Pacific Rim area, including Australia, China, Japan, and the
United States, provides a forum for sharing information on government policies and
is also currently developing a set of voluntary consumer protection principles.21
Finally, while the Internet facilitates e-commerce across national boundaries,
some steps in an electronic transaction still face physical or legal barriers at the
frontier. Ongoing trade negotiations are addressing barriers to the efficiency of
conducting business and consumer transactions in Internet services, information
technology products, express shipments, and other components of international
electronic commerce.22
20 U.S. General Accounting Office, International Electronic Commerce: Definitions and
Policy Implications, Mar. 2002, at [http://www.gao.gov/new.items/d02404.pdf].
21 Ibid., pp. 28, 29.
22 Ibid., pp. 2, 3.

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Electronic commerce accounts for an even smaller percentage of retail sales in
Europe than in the United States.23 This low level of penetration reflects the fact that
a limited number of consumers are using the Internet for commercial purposes.
OECD research shows that e-commerce is unevenly developed in the OECD
countries. Especially notable is the difference between North America and northern
Europe on the one hand, and the rest of the OECD countries on the other.
Consulting and Research Firm Estimates
More and more businesses have decided that the Internet is the key to success
and are aware of their acute need for e-commerce guidance. With increasing
frequency, e-commerce research firms declare that they have all the answers for e-
commerce strategies. As a 1999 Fortune article states, “No one knows how much
real insight online consulting firms provide, but what would-be Internet player can
afford not to subscribe? Planning for the future is hard in a mature industry; it’s
nearly impossible in one still teething.”24
Web traffic measurement may seem tedious, but with the number of dollars at
stake, it is essential to businesses. For instance, advertisers, with large budgets, are
very interested in knowing how many eyes, and whose, are viewing their ads. More
bricks-and-mortar companies are advertising online than ever before.25 During the
first quarter of 2000, only 48 of the top 100 online advertisers were businesses
operating on the traditional model. Those 100 advertisers made up 62% of all online
spending, meaning that a large bulk of online ad dollars was coming solely from dot-
com companies. During the fourth quarter of 2002, 71 of the top 100 online
advertisers were traditional business model companies, and those 100 made up 67%
of online advertising. Broken out by industry, the rate of traditional advertising is
still high in all industries except entertainment and Web media.26
New business activity has emerged to fill the need to gather e-commerce
statistics: gathering and selling strategic and statistical information about the Internet.
Internet organizations, such as the Internet Society and the International
Telecommunications Union, have begun to compile information on the size and
growth of the Internet. Ideally, e-commerce growth and demographics can be
calculated from these organizations’ estimates of the total Internet “universe.”
Private consulting firms and research and polling firms such as Nielsen and Gallup
have also entered the field, along with firms such as Forrester Research, Gartner
Group, ComScore Media Metrix, eMarketer, International Data Corporation (IDC),
23 Ibid., pp. 84, 85
24 Daniel Roth, “My, What Big Internet Numbers You Have!” Fortune, Mar. 15, 1999, pp.
114-120.
25
Nielsen//Net Ratings, The State of Online Advertising: Data Covering the Fourth
Quarter, 2002, Feb. 3, 2003, at
[http://www.adrelevance.com/intelligence/intel_report_030210.pdf].
26 Ibid., pp. 5, 6.

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and Nielsen/Net Ratings, which provide estimates of the impact of the Internet on
consumers and business.
There is much debate over which Web measurement company’s methods are
more accurate. The research firms disagree among themselves about sampling
methods and panel selection, since differing methods of identifying and soliciting the
survey participants result in different data interpretations.
Forrester Research in Cambridge, MA, and Jupiter Research in New York City
are two of the largest Internet research firms. They are so-called syndicated research
firms, which means that they publish a wide range of reports with high subscription
fees to a small, targeted audience of corporate executives.
For example, for
approximately $20,000, a company can buy a subscription for one of eight industry
sector guides from Jupiter Communications. Then every month for a year, it receives
a 32-page report filled with analysis and advice, survey data, and industry forecasts,
all on the impact of e-commerce in a particular field.
To compile their information, these firms’ analysts interview advertisers and
executives at top Web sites, review annual reports, adjust overly-optimistic figures,
assemble historical research comparing ad spending with consumer research, and
estimate spending for online advertising. As Forrester’s chief Internet advertising
analyst says, “The interesting thing about projections is that they come out looking
very exact. But really, it’s just your opinion expressed numerically.”27 Although
research firms such as Forrester and Jupiter attempt to make methodical projections,
the results are often imprecise.
One observer says the models used by Forrester or Jupiter “have little
resemblance to statistical techniques, like regression analysis or time-series analysis,
used by traditional market researchers or industrial forecasters to determine next
year’s worldwide consumption of, say, gasoline or Coca-Cola. That, of course, is
because enterprises that forecast the consumption of resources or consumer items can
draw on decades of historical data.”28 Only recently has the federal government
become involved in measuring the “new economy.” Frequently issued statistical
reports based on data from the Department of Commerce and Census Bureau surveys
are enabling businesses to measure e-commerce’s value on a national and
international scale.29
27 Roth, “... Internet Numbers ...,” p. 120.
28 Jim Frederick, “$6 Billion on Online Holiday Sales by the End of This Month! $24 billion
in Internet Ads by 2003! 2.3 Trillion E-biz Predictions by 2010!”
New York Times
Magazine, Dec. 19, 1999, pp. 70-73.
29 The Bureau of the Census E-Stats site provides official federal data and estimates to
measure the electronic economy, see [http://www.census.gov/eos/www/ebusiness614.htm].

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Recent E-Commerce Statistics
With all the caveats discussed above, following is a sampling of estimates of the
size and growth of e-commerce. (For a list of Web sites for e-commerce statistics,
see Selected Web Addresses for Internet and E-Commerce Statistics, below.)
! Online retailers broke even in 2002, according to new data from
Shop.org, the Internet merchant trade association. The association
says that e-tailers generated $76 billion in sales for 2002, and for the
first time as an industry avoided losing money. As a group, Web
merchants with pre-existing catalog operations had the biggest
operating margins—22% last year, up from 6% in 2001. Traditional
retailers’ online units were profitable for the first time in 2002, with
average operating margins of 7%. Online-only retailers, though, are
still operating in the red, according to Shop.org. Only half reported
positive operating margins, and overall losses averaged 16%, up 3%
from 2001.30
! The Internet Fraud Complaint Center (IFCC) reports that Internet
fraud complaints that included some form of monetary loss totaled
$54 million in 2002—more than tripling from the $17 million
reported in 2001. The organization found that 46.1% of Internet
fraud complaints related to auctions, while 31.3% related to the
nondelivery of merchandise or payment issues.31
! The number of Americans buying online will surpass 100 million
this year, according to a report by the research firm eMarketer. In its
new North America E-Commerce: B2B & B2C, eMarketer forecasts
that total business-to-consumer (B2C) e-commerce spending will top
$90.1 billion in 2002 and will surpass $133 billion in 2005. Key
findings from the report include: the average annual amount spent
online among U.S. Internet users ages 14 and above will be $717 in
2003; and 58.3% of Internet users ages 14 and above will purchase
goods and services online in 2003, totaling 81.2 million users.32
! According to the United Nations Conference on Trade and
Development report, E-Commerce and Development Report 2002,
developing countries accounted for almost one-third of new Internet
users worldwide in 2001. Worldwide e-commerce estimates range
from $1.5 billion to $3.8 billion in 2003.
In one of the most
30 Bob Tedeschi, “E-tailers Broke Even Last Year,” New York Times, May 19, 2003, at
[http://www.nytimes.com/2003/05/19/technology/19ECOM.html].
31 Internet Fraud Complaint Center, “Internet Fraud Complaint Center Referred More Than
48,000 Fraud Complaints to Law Enforcement in 2002,” press release, Apr. 9, 2003, at
[http://www1.ifccfbi.gov/strategy/wn030409.asp].
32 eMarketer, “U.S. B2C E-Commerce Tops $90B This Year,” press release, May 1, 2002,
at [http://www.emarketer.com/news/article.php?1002209].

CRS-11
optimistic forecasts, e-commerce would represent about 18% of
worldwide business-to-business and retail transactions in 2006.33
! The Economist Intelligence Unit (EIU), a division of The Economist,
together with its specialist communications and Internet division,
Pyramid Research, compiled international “e-readiness rankings.”
The EIU scored the 60 largest economies on “e-readiness,” which it
defines as “the extent to which a country’s business environment is
conducive to Internet-based commercial opportunities.
It is a
concept that spans a wide range of factors, from the sophistication
of the telecommunications infrastructure to the security of
credit-card transactions and the literacy of the population.”34
Selected Web Addresses for E-Commerce Statistics
U.S. Government
U.S. Department of Commerce.
Quarterly Retail E-Commerce
Sales.
[http://www.census.gov/mrts/www/current.html] has the most recent press releases.
U.S. Department of Commerce . “E-Commerce 2001 Highlights.” E-Stats, March
2003 (official snapshot of e-commerce for key sectors of the economy ).
[http://www.census.gov/eos/www/papers/2001/2001estatstext.pdf]
U.S. Department of Commerce. Digital Economy 2002.
February 2002.
[http://www.esa.doc.gov/DigitalEconomy2002.cfm]
International
United Nations Conference on Trade and Development.
E-Commerce and
Development Report 2002.
[http://www.unctad.org/Templates/webflyer.asp?docid=2923&intItemID=1397&l
ang=1&mode=highlights]
Academic
Center for E-Commerce (Stanford Program in Law, Science, and Technology)
[http://lawtech.stanford.edu/ecommerce/]
Center for Research in Electronic Commerce (University of Texas, Austin)
[http://cism.bus.utexas.edu/]
33 United Nations Conference on Trade and Development, E-Commerce and Development
Report 2002, 272 p. For highlights see
[http://www.unctad.org/Templates/webflyer.asp?docid=2923&intItemID=1397&lang=1
&mode=highlights].
34 “The Economist Intelligence Unit / Pyramid Research E-Readiness Rankings,” The
Economist, May 8, 2001,
[http://www.ebusinessforum.com/index.asp?layout=printer_friendly&doc_id=367].

CRS-12
Guide to E-Commerce (School of Industrial and Labor Relations, Cornell University)
[http://www.ilr.cornell.edu/library/reference/guides/ecommerce/]
Measuring the Internet Economy, January 2001 (University of Texas and Cisco
Systems)
[http://www.internetindicators.com/]
University of California E-conomy Project
[http://e-conomy.berkeley.edu/]
Private Research Firms
ComScore Media Metrix (formerly Media Metrix)
[http://www.comscore.com/]
eMarketer
[http://www.emarketer.com/estatnews/]
Forrester Research
[http://www.forrester.com/home/0,6092,1-0,FF.html]
Gartner Group (press releases)
[http://www4.gartner.com/5_about/press_releases/pr2003.jsp]
International Data Corporation (IDC)
[http://www.idc.com/]
Internet Economy Indicators
[http://www.internetindicators.com/facts.html]
Nielsen/Net Ratings
[http://www.nielsen-netratings.com/]