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404 Part Three Key System Applications for the Digital Age

FIGURE 10.1 THE GROWTH OF E-COMMERCE

Retail e-commerce revenues grew 15–25 percent per year until the recession of 2008–2009, when they slowed measurably. In 2012,
e-commerce revenues are growing again at an estimated 15 percent annually.

a crawl. In 2009, e-commerce revenues were flat (Figure 10.1), not bad consid-
ering that traditional retail sales were shrinking by 5 percent annually. In fact,
e-commerce during the recession was the only stable segment in retail. Some
online retailers forged ahead at a record pace: Amazon’s 2009 revenues were up 25
percent over 2008 sales. Despite the continuing slow growth in 2012, the number
of online buyers increased by 5 percent to 150 million, and the number of online
retail transactions was up 7 percent. Amazon’s sales grew to $48 billion in 2011, up
an incredible 41 percent from 2010!
Mirroring the history of many technological innovations, such as the telephone,
radio, and television, the very rapid growth in e-commerce in the early years
created a market bubble in e-commerce stocks. Like all bubbles, the “dot-com”
bubble burst (in March 2001). A large number of e-commerce companies failed
during this process. Yet for many others, such as Amazon, eBay, Expedia, and
Google, the results have been more positive: soaring revenues, fine-tuned business
models that produce profits, and rising stock prices. By 2006, e-commerce revenues
returned to solid growth, and have continued to be the fastest growing form of
retail trade in the United States, Europe, and Asia.
• Online consumer sales grew to an estimated $362 billion in 2012, an increase
of more than 15 percent over 2010 (including travel services and digital
downloads), with 150 million people purchasing online and an additional 34
million shopping and gathering information but not purchasing (eMarketer,
2012a).
• The number of individuals of all ages online in the United States expanded
to 239 million in 2012, up from 147 million in 2004. In the world, over 2.3
billion people are now connected to the Internet. Growth in the overall
Internet population has spurred growth in e-commerce (eMarketer, 2012b).
• Approximately 82.5 million households have broadband access to the
Internet in 2012, representing about 69 percent of all households (96 percent
of all Internet households have broadband).

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