OFT to probe Internet shopping

OFT to probe Internet shopping

Following a 350% rise in sales over the Internet over the last five years, the UK's Office of Fair Trading (OFT) is launching a study to examine levels of consumer protection and confidence in the online retailing market.

The research will also examine whether consumers are aware of their rights when shopping via the Web and if businesses understand and comply with regulations.
The study will look into whether consumers are confident when shopping on the Internet and whether they receive the right level of regulatory protection.

Internet retail sales in the UK have risen by 354% over the last five years and and are now estimated to be worth around £8.2 billion, according to stats from the Office for National Statistics (ONS).

John Fingleton, chief executive of the OFT, says: "The Internet is fast becoming a hugely important channel for consumers and businesses. Its rapid evolution means that we need to ensure that the consumer protection regime gives current and future users the confidence to realise the Internet's potential for shopping."

Around 130,000 UK businesses now sell products and services via the Web, and the value of all Internet sales made to households by UK non-financial business was £18.1 billion in 2004.

The retail part of Internet sales is growing rapidly and online retail sales growth far outstrips that of total retail sales which only increased 20% over the past five years. In 2005, 3.1% of all retail sales took place online, compared with 0.1% in 1997. This is forecast to increase to almost 6.8% by 2010.

The typical Web shopper spent £560 online in 2005 and forecasts suggest that this could grow to over £860 per year by 2010, according to research by retail consultancy and analyst Verdict.

According to the ONS stats, online shopping is forecast to increase by 163% by 2010, with the value approaching £21.5 billion per annum.

But the OFT says other research has also identified consumer concerns when shopping online about security of payment, or potential problems with delivery.

The study, which will be published in spring 2007, will focus on sales of domestic electrical goods, music sales (including downloads), airline ticket sales via the Internet as well as online auctions. These sectors have been chosen because they represent at least a third of all online spending.

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