By Neora Shem Shaul

The Internet is joining the Christmas spending spree. A new Ernst & Young survey reveals that about 41% of Internet users intend to spend close to 7% of their Christmas budget on presents bought over the net.

Another survey finding shows 19% of Internet subscribers who have not yet purchased products over the net, will use this method for Christmas purchases. These subscribers will spend some 3% of their budget for festival presents.

Ernst & Young Israel’s management consultant manager, Dror Fockard, said that in following the development of electronic trading in Israel, a significant increase was seen over the last three months in the number of Israeli companies offering the option to purchase their products through the Internet. However, he said, there has not yet been a significant increase in actual sales volume.

It is thought that growth will come over the next few months thanks to the increase in the number of sites in Israel, and the parallel developments in the world market. This phenomenon has been felt even more strongly recently, and many Israeli virtual shops have opened, mainly since relatively simple technological solutions have been found to the security problem of transferring sensitive information, such as credit card numbers.

In July ’97, Yariv Nachshon opened Plonter, a virtual computer shop. He has now extended it to sell music, films and books. "The advantage of the virtual shop compared to an ordinary shop, is the price to the customer. Due to the absence of expenses for holding stock, renting office space, municipal taxes, electricity etc. we are able to manage an efficient and cheap system", he says.

The Israeli consumer connected to the web mainly buys computer equipment through the Internet, and meanwhile is unaware, unlike the American consumer, of savings on small purchases. Other virtual shops selling computer equipment are Excellnet (www.excellnet.co.il) and Chip (www.chip.co.il). Both these shops give updates of their latest catalogues, which are issued every fortnight or month. However, computer equipment prices sometimes decline week by week, so it is worthwhile using the medium to its full extent to get a daily update.

Plonter (www.plonter.co.il) is part of the group of shops serving the subscribers of the ActiviNet virtual mall, who are connected to the Internet via television. Their subscribers are updated everyday with price changes, or availability of new products. Nachshon believes that sales volume doubles month by month.

The security problem has been solved by using a telephone number over which the credit card details are given only once, and the client is given a code to use for all purchases on the net.

The Israeli malls are still suffering growing pains, such as amateur presentation, ad hoc solutions to problems of security and problems of presentation in Hebrew. For instance, Plonter has become entangled in a Hebrew standard by Swallow and Kenionet (www.kenionet.com) that only support Hebrew version 3.11. Click (http:www.order=click.co.il) purchases are done in English, so there is no problem of compatibility with Hebrew.

Supernet (http:www.supernet.co.il) works beautifully. The computerised purchase division of the Co-op Hypershuk chain allows products to be ordered and paid for by credit card, forms to join the shoppers’ club, a listing of branches and areas supplied, and up-to-date special offers.

To sum up, there is another small difference between the virtual shop and a real shop: how do you know if they have gone bankrupt or simply closed down? In the real world, a shop stands empty with a ‘for rent’ sign, while with a virtual shop, you monitor it and see the prices have not been up-dated for a couple of months, and you receive no reply to e-mail, and then finally a screen appears with the required announcement. It is not nice to see a site close down, but at least you don’t have to leave the house to find out.