Number of Internet users soars

With the number of Internet users soaring by 5 million in five months, and the number of domain registrations doubling during the period, the explosive growth in the nation¡¯s information service industry is expected to carry into this the second half.

The number of high-speed Internet users is estimated to reach 3 million by this year¡¯s end, heralding a sharp expansion in the IT market.

According to the Korea Network Information Center, the number of domestic Internet users hit 15.34 million as of the end of May. This figure showed a 4.48 million rise from 10.86 million registered last year.

If this strong growth continues, the Goldman Sachs & Co.¡¯s initial forecast that Korean Internet users would number 20 million by 2004 should be revised.

The increase in the number of domains registered also is impressive. Domains registered in the country more than doubled in five months from 200,000 as of December 1999 to 440,000 as of May. Expansion in the number of domains registered likely will translate into accelerated e-commerce.

In addition, the number of users of high-speed Internet services such as ADSL and ISDS rose above 1 million as of February this year and is on course to exceed 3 million by this year¡¯s end.

In line with more intensified competition among Internet service providers such as Hanaro Telecom, Korea Telecom and Thrunet, the market will continue to grow. Goldman Sachs projected that 46% of Korean Internet users would utilize high-speed services by 2004.

Meanwhile, IDC, an information-communications market research institute, forecast that Korean business-to-business e-commerce volume would surpass 1 trillion won by the end of this year, up 3.7 times from the 292.8 billion won in 1999.

In line with off-line firms with superior brands and marketing capability entering the online market competition en masse, the e-commerce firms, which have established bastions in cyberspace, will be threatened.

Also, big names such as Buyenjoy, Hansol CSN, Samsung Mall and Interpark likely will lead the market, where more than 2,000 online shopping malls are competing for a bigger slice of the pie.

Popular e-shopping malls will be those selling hardware (24%), travel and leisure (16%), software (13%), books (13%), CDs, video and music (13%).