Web Commerce Comes of Age in Russia, IDC Says

MOSCOW — OCTOBER 6, 2000 — Web based commerce has come of age in Russia. IDC estimates Web commerce revenues will increase nine-fold in 2000, with total spending predicted to reach $90 million by yearend.

"This market truly arrived in 2000," said Robert Farish, research manager at IDC Russia. "In 1998 Russian Web commerce consisted of a few experimental projects; today it's a market worth tens of millions of dollars."

The timing of Russia's Web commerce explosion was partly due to Russia's rocky political environment. "There was a lot of investment committed as early as 1998, but a financial crisis and the uncertainty before the 2000 presidential elections tended to delay a lot of projects," Farish said. "The upshot was a huge increase in activity from the beginning of this year."

Other major trends include:

· Growth in Web commerce was driven by business-to-consumer ecommerce. IDC predicts this situation will change radically over the next two years as more

business-to-business projects come on stream

· After two years of growth at breakneck speed, IDC believes the rate at which new users are connecting to the Internet in Russia is now beginning to slow

· IDC forecasts there will be a total of 9.4 million Internet users in Russia by 2004, equating to 6.4% of the total population

· IDC estimates the total value of the Internet access services market in Russia in 1999 was $517 million.

· Though Internet connections via leased line and broadband are forecast to grow the fastest, dial-up Internet access is expected to be the predominant form of

Internet access for both businesses and consumers in Russia through 2004

IDC's latest report, The Internet Market in Russia, 1999–2004 (IDC #EI04G), presents the results of IDC's research on the Russian ecommerce and Internet access markets for the period 1999-2004. It provides current and projected levels of Internet usage in Russia, estimates of current and projected volumes of Internet commerce in Russia, and data and projections on the number and type of Internet access connections and value of this market. This report is available for purchase from your local IDC office.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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