European online companies have failed to take advantage of business opportunities on the Web even though European online markets present huge e-commerce opportunities, according to the online research firm, Jupiter Communications Inc.
The research firm released its study during its Jupiter Consumer Online Forum-Europe in London yesterday and today. The study looked at levels of Internet sophistication, which Jupiter defined as people who understand what the Internet is, how to access it and how to use it once logged on.
Jupiter ranked the "most sophisticated Internet users" by country, with European nations taking 12 spots out of 20.
Speakers on yesterday's numerous panel discussions attributed Europe's lack of aggressive online entrepreneurialism to a number of factors, including metered telephone billing. Furthermore, Europeans, panelists said, don't find enough compelling reasons to go online.
"Europeans do have a life outside of the Internet. They're more developed socially, so there is less of a need to be online," Fabiola Arrendondo, managing director of Yahoo Europe, said.
When it comes to Web usage, Europeans are about 18 months to 24 months behind the U.S., Arrendondo added.
Currently, the average amount of time spent online in the U.S. is between 30 hours and 32 hours per month. That level of usage is simply not happening in Europe because telecommunications companies charge per minute of phone usage, even for local calls, Phil Dwyer, managing director (Europe) of Jupiter Communications said.
"Even in Finland, which has the lowest telephone charges in Europe, average usage time is still only about seven hours per month. It's really a question about perception. Consumers don't have a perception of value for money," Dwyer said.
Dwyer believes that the U.K., where British Telecommunications PLC meters local calls, is about two years behind the U.S. when it comes to Web usage. Sweden is about six months behind the U.S., he said.
The cost for products and services once users are online is also an important barrier. In order for companies to be successful on the Web they must offer low prices to customers at high volumes, Jupiter said.
"Low price is the most compelling reason to buy online," Brent Hoberman, managing director of the European travel e-commerce site LastMinute.com said.
While there is a cultural barrier to Europeans feeling comfortable buying online, it is up to companies to change that. They can educate users about how to locate low-priced products online and change cultural trepidations about e-commerce with customer services, marketing and outreach projects, the panelists all agreed.
"The user experience is different in Europe. Whereas retail turns out to be a very therapeutic experience in the U.S., in Europe it's more about efficiency and getting access," Roger Wood, a corporate vice president for global e-commerce at Reebok International, said.
The more time users spend online, the more comfortable they will feel online, and that should translate into spending more money over the Internet, the panelists agreed.
Unfortunately, European companies have not taken advantage of the potential European online markets with aggressive marketing and sales efforts, the Jupiter report said.
Though an abundance of ISPs (Internet service providers) offering access without subscription charges have sprung up over Europe in the past year, bringing more people online, companies for the most part have not been able to compel Europeans to spend increased leisure time and spending power on the Internet, the report concluded.
Jupiter Communications, located in New York, can be contacted at +1-212-780-6060, or http://www.jup.com.