Global E-Commerce: Europe - E-commerce Efforts In The United Kingdom

The United Kingdom proved to be a leading European e-commerce arena. By November of 1999, 25 percent of adult citizens there accessed the Internet regularly. A key component in the country's online development was Freeserve, the Internet access service launched by Dixons Group in late 1998, which offered U.K. residents Internet access for free. To sign up, customers simply had to stop by a Dixons, Curry's, PC World, or Link store to pick up the necessary software. Within five months of its inception, Freeserve had signed on more than 1 million customers.

When the upstart conducted its initial public offering (IPO) in August of 1999, listing its shares on both the London Stock Exchange and NASDAQ, it had secured roughly 30 percent of the Internet market in the U.K. In early 2000, Freeserve reorganized its online content into the following channels: business, careers, entertainment, learning, life, money, motoring, news and weather, shopping, sport, travel, and women. Eventually, property and health channels were added to the site's offerings. Like free ISPs in North America, Freeserve soon realized that although the free ISP model was highly effective for securing a large base of subscribers quickly, monthly service fees were necessary for the sake of profitability. As a result, the firm introduced several fee-based subscription options in April. The least expensive service, Freeserve HomeTime, allowed subscribers to access the Internet between 6 p.m. and 8 a.m. during the week and all day and night during the weekend. For a slightly increased rate, clients could opt for Freeserve AnyTime to gain unrestricted access to the Internet. Those who used the Internet less frequently could opt for Freeserve No-Ties, which billed clients based on the amount of time they used the Interet.

Freeserve began offering a high-speed broadband Internet service—the first of its kind in the U.K.—in September of 2000. Three months later, the leading online services provider in France, Wanadoo Group, offered to purchase Freeserve from Dixons. The deal was completed in the first quarter of 2001. By then, Freeserve had seen its subscriber base grow to 2.1 million, one-quarter of which had signed on for a fee-based subscription.

Late in 2000, the U.K. government took an active role in promoting e-commerce by publishing the U.K. Online Strategy. Among other things, the new plan called for increased assistance for small businesses going online; the creation of learn-direct centers, which offered various online courses and telephone help lines; and the creation of 6,000 online centers to allow for Internet access and training in various communities. In addition, the government launched its own Web site and began delivering a variety of government services online.

In addition to the e-commerce efforts coming from within the U.K., many leading U.S. e-commerce players had also began to move into the country. For example, America Online (AOL) Europe, a direct competitor to Freeserve that arrived in the U.K. in 1996, secured a base of 1 million customers there by 2001. In March of that year, AOL was able to offer unlimited online access to U.K. residents for $20 per month. Leading women's Internet portal iVillage.com created iVillage.co.uk in conjunction with leading U.K. retailer Tesco in December of 2000. Internet auction leader eBay moved into the U.K. even earlier, launching a site there in 1999.