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Where is there upside in ecommerce in this recession? February 23, 2009

Posted by jeremyliew in Ecommerce, recession.

Although Internet Retailer is reporting 20% ecommerce growth among the top 500 etailers in 2008 based on their preliminary survey returns, Comscore notes that there was actually a 3% decline in ecommerce sales in q4 2008. The later statistic seems to be more in line with most retailers experience. However, the prognosis is not equally bad across all categories. Comscore notes that some categories (sport and fitness, video games, consumer electronics and apparel) actually saw growth last quarter:


Comscore speculates that this supports more “nesting” behavior in the recession.

McKinsey (free registration required) looks at all consumer expenditure across the last two recessions (not just ecommerce) and also finds some areas that grow while others decline:


Which categories of ecommerce do you think will grow through this recession?


1. vestopia - February 24, 2009

Comscore also reported 37% growth in Jan 09 vs. Jan 08 in the books and magazine commerce category (slide 30).
In the industry we compete in, finance, there is stagnation in social networking sites around investing, but strong growth in paid content sites. One explanation is that fear and uncertainty drives consumers to PAY for information – education, books, magazines and subscription sites. There is also a shift among some entrepreneurs to move from free sites to paid ones – see http://www.offbeatguides.com
The hunger for paid knowledge is growing.. see the slide from Comscore and Compete’s data on paid vs. free sites in some investing/personal finance sites:

2. Jonathan Mendez - February 24, 2009

that historical data looks accurate. EDU is white hot right now in lead-gen

3. amisare - February 25, 2009

The number of “Time rich” people increases in times of recession. Time rich people can now spend more time to enrich themselves (in education, searching for job/information, etc), socialize, and seek entertainment (games, video etc). Therefore sites providing such facilities are more likely to thrive. The reported growth categories are conmensurate with increase of time rich people in times of recession.

4. Ranjeet Guptara - February 28, 2009

As a Director of http://www.teachable.net, I have to openly admit a bias.
Still, I’m glad to hear that the McKinsey survey reveals Education as a winner in terms of online spending during a downturn.

Teachable has a working product, parallels existing offline behavior and is achieving growing success in terms of distribution. Teachable has also done this on very little seed capital, mainly from the UK angel community.

Several entrepreneurs we know have left the frigid UK for the warmth of Silicon Valley. We still hope that Europe’s VC community becomes as good at coverage as the exemplary Americans. Meanwhile as both an angel investor and entrepreneur, I confess we have room to grow in Europe in terms of supporting companies that have identified attractive niches and are executing faithfully.

5. Seth Yates » Where is there upside in ecommerce in this recession? - March 2, 2009

[…] Where is there upside in ecommerce in this recession?: […]

6. Snooth Blog » The truth behind the state of the wine market - March 3, 2009

[…] this article shows how there’s a 28% increase in the rate of growth of spending on food for home – people […]

7. steve turner - March 6, 2009

Sports, games and electronics are strong, sounds like people have a lot of spare time on their hands. As far as industries are concerned this is still one of the least regulated and most incorrectly reported. State tax laws and other regulates just don’t get a good feel for the money flow yet. It’s no surprise that these reports are so varied from publisher to publisher.

8. BuyPlayWin Blog » Prediction: eBook Readers to be 2010’s Bestsellers - March 7, 2009

[…] Jeremy Liew, a respected VC at Lightspeed Ventures, asked his readers what product categories would bring strong e-commerce sales in upcoming months/years. My comment never made it to his post, (no idea why), so I’ll share it with you here.I couldn’t believe that nobody had made this comment: The economy sucks! […]

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