McKinsey's 'ePerformance' survey covered 200 internet businesses with combined revenues of 1.3bn. The findings suggest that while web retailers have managed to improve their overall performance by successfully converting site visitors into customers, content-only sites are failing to build sustainable business models. Online content players need to identify new sources of revenue to survive.
Clothing retailers are the most profitable e-tail category, says the study.
Ebusinesses built on the back of high street retailers are twice as likely to be profitable than pure-play startups. McKinsey suggests that these ebusiness offshoots are successful by using established brands and marketing machinery to keep promotional costs down, while also benefiting from established technological infrastructures such as order fulfilment systems.