TEMPE, ARIZ. Online purchasing rose significantly during the second quarter of 2002, according to the seventh Institute for Supply Management™ and Forrester Research, Inc. Report on eBusiness.

Companies that purchased direct material online rose from 53 percent to more than 64 percent in the first quarter. Indirect materials purchases increased to 84 percent, up from 78 percent. Most companies, however, are still in the early stages of e-commerce said ISM spokesperson and FedEx vice president and chief sourcing officer Edith Kelly-Green.

Industrial Distribution's 56th Annual Survey of Distributor Operations shows that 55 percent of distributors sell products from their own Web site and another 18 percent conduct e-commerce through another company's Web site.

While distributors reported that only about four percent of their sales volume is from online purchases, over half said they expect average online sales growth of 18 percent this year. Over 40 percent of the distributors surveyed have purchased industrial products online. Despite the increasing prominence of e-commerce in their businesses, only 33 percent of respondents have on overall Internet/e-commerce strategy.

"There will be a continued increase in growth but there are many factors working against large growth levels," said Kelly-Green. "This is the way the world will do business, but it is gearing up slower than expected."

One of the factors is the weak economy, she said. Even with the lowered activity in general, there have been significant increases in online activity during 2002.

"Some suppliers are still less ready to conduct business online than their customers would like," said Kelly-Green. "But, in general, suppliers have more confidence in e-commerce and are doing more to make buying on the Internet easier and more effective."