Computers, Lingerie Lead B2C Market

FRAMINGHAM (04/25/2000) - Dell Computer Corp. and Initimate Brands Inc., the Columbus, Ohio, parent of the Victoria's Secret line of lingerie, proved to be the big winners in a study released today on business-to-consumer e-commerce.

ActivMedia Research LLC in Peterborough, New Hampshire, issued a report on the Top 100 business-to-consumer sites on the Web and found Dell the runaway winner on Internet revenues and Intimate Brands the fastest-growing site commercial site on the Web.

Internet retail start-ups showed solid sales growth, but most registered net losses last year, ActivMedia said.

Victoria's Secret, buoyed by its infamous Super Bowl splash last year, posted 8,900% growth for the year, according to Harry Wolhandler, ActivMedia's vice president for research. More than the percentage growth, Wolhandler said he was impressed that the company's Internet revenues jumped from almost zero in 1998 to $90 million last year.

"One of the things that points to is the strength of the not-coms, the businesses that have a brand name outside the Web," he said.

Dell earned more than $5 billion in e-commerce revenue, almost doubling second-place entrant Charles Schwab & Co., the San Francisco-based brokerage.

Meanwhile, the study said that United Airlines, Staples Inc. and The Gap Inc. each managed to turn a profit from their Web sites while experiencing online sales growth of up to 980%. On the other hand, Drugstore.com Inc., Priceline.com Inc. and Mothernature.com Inc. saw better than 1,000% growth but all posted losses.

"I wouldn't write those companies off yet," Wolhandler said. "Those could be paper losses we're seeing, and they could be made up over time as those companies build brand names." He added that he expects the fortunes of Amazon.com Inc., Priceline and other leading e-commerce sites to improve this year.

"Five years ago, we did not believe you could use the Internet at the point of sale," he said. "These companies have already proven they can build a market, and you have to expect some of them will succeed in that market."

The ActivMedia study polled almost 1,000 businesses, culled from the Media Metrix 500, PC Data 500 and Lycos Top 5%. Top markets were then identified and a list of the Top 100 Web sites was chosen. ActivMedia then visited and analyzed each company on the list.

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