Germans have made the Internet an integral part of school and work. Online penetration is over 50% for every age group 50 and younger. Comfort with the Internet has helped make Germany a nation of active online shoppers, predicted to spend over $108 billion in 2008.
"In assessing the growth of the Internet, and e-commerce in particular, many marketers, as well as many analysts, tend to overlook Germany, often merely lumping it together with the rest of the E-5 countries or Western Europe as a whole," says James Belcher, eMarketer Senior Analyst and author of the new Germany Online report. "That's a mistake. Germany is the third-largest economy in the world, right behind the US and Japan, and what happens there — and when and why it happens — is vitally important to the growth of the Internet's infrastructure and economy."
As in every Western country, e-mail and research still top the list of online activities, but German Internet users also are heavy online shoppers, making the country the largest e-commerce market in Western Europe.
"The rise of VoIP and IPTV will make phoning and watching films increasingly common as well," says Mr. Belcher. "Digital TV adoption in particular will demand innovative marketing, as IPTV provides a free alternative to subscription-based television — and to other content options."
One of the main reasons the future of the Internet looks bright in Germany is demographics. Offline young Germans are a rarity these days. Over 83% of 14 -29 year-old Germans use the Internet. Penetration is actually high for most age groups in the country, with more than half of those 59 and younger online across the board. Only those 60 and older are largely offline, with a mere 20% of that group using the Internet.
"Part of the reason for such high Internet usage by young people is the 'Schools on the Internet' initiative: 84% of all German pupils are online, with a further 9% lined up to begin use within the next twelve months," says Mr. Belcher. "Higher education levels means still more Internet use. People who leave school early are largely offline; the penetration rate amounts to just 22% in that group."
Similarly, more than two thirds of working people are online. In fact, Internet usage is now a requirement for many jobs. At-work Internet users tend to be online at home, too. By the same token, private Internet users find a way to use it for their jobs — just 38% of non-employed people surf the Internet.
As for the Internet's presence in the workplace, a study by the Ministry for Economics and Labour showed that 96% of small and medium-sized companies had Internet access in April 2005. In companies with more than 250 employees, the penetration rate is more than 99%. More than half of companies have online ordering facilities, 39% make orders online, 35% use the Internet for B2B e-commerce, 27% for marketing purposes and 8% for direct sales to customers.
"The Internet has a huge presence in German life, both public and professional, and Germany is a huge presence in the world economy," says Mr. Belcher. "And marketers who ignore these facts are missing a huge opportunity."