Article of Interest  -  Internet Services

Online Demographics - Attitudes and Behaviors

2000 Jupiter Research, Volume 2 / December 8, 2000 - by Mark Mulligan, Marine Theureaux, Noah Yasskin, Olivier Beauvillain

Executive Summary

Adoption of the Internet was slow in France compared with adoption in the UK, Germany, and Sweden, and the online population of 11 million in France accounted for only 18 percent of the total population in 2000. However, as a result of this late adoption, Jupiter expects that the number of online users in France will increase by a compound annual growth rate (CAGR) of 21 percent between 2000 and 2005, compared with a European average of 18 percent. By 2005, the individual user online population in France is expected to reach 24 million (home, work, school, and other places combined), 39 percent of the total population. Despite the low number of consumers currently using the Internet in France, numerous French traditional companies (e.g., media companies Vivendi and TF1, and retail group Pinault-Printemps-Redoute), US firms (e.g., retailer Amazon.com), and Pan-European online content businesses (e.g., Spray, and Sportal) started to target the French Internet market with ambitious strategies in 1999 and 2000. As a result, online users have a detailed and solid French language online proposition from content and commerce companies operating in France.

How do Internet users in France use the Internet? What is the importance of work and school access versus home access? Has France already been affected by media cannibalization? What attitude do Internet users in France have toward online shopping?

Characteristics of the Online Population in France

The majority of Internet users in France are male (59 percent), young (84 percent are under 45 years of age), and live in large cities. They spend most of their time online doing simple, communication-oriented activities (e.g., e-mail and utility). Although users most frequently connect to the Internet from home in France, home access is underrepresented compared with more mature Internet markets, and work and school continue to be important access points.

Media Cannibalization Has Yet to Have a Significant Impact

Internet users in France spend less time online than their UK and US counterparts. As a result, media cannibalization has not had a significant impact in France yet and French traditional media companies can, for the time being at least, regard the Web more as an opportunity than a threat.

Online Users in France Still Afraid to Shop Online

With only 18 percent of Internet users in France making purchases online in 2000, online shopping is still at an early stage there and the 20 years of Minitel experience has had little impact, if any, on the speed of adoption of Internet commerce among consumers. Those that do make purchases online also spend less on a yearly basis than online buyers in more mature European Internet markets spend.

Characteristics of the Internet Population in France

Online Users Are Much Younger than the Average Population

The Jupiter/Ipsos Online User Survey (August 2000) found that 84 percent of Internet users in France are under 45 years of age, and that 65 percent are younger than 35 years old. By comparison, the UK Internet market is more mass-market, with 71 percent of adult Internet users being under the age of 45, and 45 percent under 35. Although the Internet population in France will develop and reflect more closely the structure of the overall off-line population, Jupiter believes that a large number of seniors (over 65 years old) will never be online through a PC. As a result, the future online population in France will remain younger than that of the US in the medium-term—approximately three to four years. Currently, only five percent of the over-65 group owns a PC at home, while Jupiter estimates that PC penetration will reach 33 percent in 2000 within French households. There are two main factors that account for this characteristic:

·  Low initial PC penetration in the working environment. The PC took some time to enter the work environment in France. While the PC is now widely used in administration and businesses, until the mid-1990s it was an unknown tool in many French companies. Therefore, there is a portion of the population that retired in the early 1990s and is now older than 65 that has never used a PC and probably never will.

·  Families are less scattered in France than in the US. Families in France are usually less scattered geographically than families in the US are. The Internet's ability to send and receive e-mail was a key driver of its penetration level in the US, especially among geographically-scattered US families. In France, the Internet is not seen as a way for disparate families to communicate to the same extent.

Figure 1: French Online Population by Age, 2000

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 673 (FRANCE ONLY)

© 2000 JUPITER RESEARCH

Men Represent the Majority of the Online Population in France

Similar to the situation in the US, where the male population dominated the Internet user base until 1999, men dominate the overall Internet user base in France, representing 59 percent in 2000. Jupiter anticipates that the Internet population in France will develop to replicate the US market, where women now just surpass men, accounting for 50.4 percent of the online population. On the supply side, many Web businesses are ready to capture the increasing female audience and have developed affinity portal sites in France targeting either the whole female community or a specific female audience (e.g., auFeminin.com, newsfam.fr, plurielles.fr (TF1), and femmes.msn.fr).

Figure 2: French Online Population by Gender, 2000

SOURCE: JUPITER INTERNET POPULATION MODEL, 3/00 (FRANCE ONLY)

© 2000 JUPITER RESEARCH

Internet Use in France Remains Concentrated in the Paris Region

The Jupiter/Ipsos Survey found that online, individual user penetration level in the Paris region reached 30 percent in 2000. This is a far higher Figure ure than that for other regions in France, such as the Southeast region (16 percent), the Northwest (13 percent), the Northeast (nine percent), or the Southwest (eight percent), as well as the national average of 15 percent. The online activity in the Paris region is a result of the high concentration of businesses and the high number of universities there. A similar situation occurs to a lesser extent in the UK market, where Greater London has 33 percent of its population connected to the Internet. However, Internet penetration levels in the French provinces are much lower than those of equivalent regions in the UK.

Figure 3: Percentage of Individual Internet User Penetration in the French Regions

SOURCE: JUPITER/IPSOS TRACKING STUDY, 2000

© 2000 JUPITER RESEARCH

What Online Population Characteristics Imply for Business

When launching off-line advertising campaigns in France, Internet companies and media agencies planning their campaigns, must keep in mind that the Internet economy will remain focused on the Paris region and other large cities at least until the end of 2001. This is particularly important to consider given that Internet companies are increasingly trying to spend more wisely when advertising off-line. French cable TV—for the most part, available in large cities only—offers a good advertising proposition for online businesses, especially for those targeting mature online users (e.g., affinity portals, brokerage firms, or retailers of high-consideration goods). The free-to-air channels, TF1, France2, France3, and M6, reach 98 percent of French households and are, therefore, more suitable for the advertising campaigns of Internet service providers (ISPs) and portals. Currently, satellite digital TV (DTV) households account for 82 percent of total French DTV households; digital cable accounts for the remaining 18 percent. French DTV operators—such as CanalSatellite and Television Par Satellite (TPS)—mostly target cities in France with populations under 30,000 and that do not have cable TV.

Lower Home Access Levels than More Mature Markets Have

Because the French Internet market is at an early stage of development, home Internet use is relatively low compared with that in the UK. However in France, with 59 percent of users accessing the Internet at home, against 38 percent at work, 24 percent at school (or university) and 13 percent in other places (such as Internet cafés or a friend's home), it is the most frequently used location. In comparison, 86 percent of the UK's online population accesses the Internet from home.

·  Work access important. The PC took much longer to enter the French corporate environment than it took in the US and other Northern European countries. However, PCs and Internet use are now widespread in French businesses. Currently, consumers in France use the Internet at work significantly; although, use of music, games, and video on the Internet remains low despite the frequent availability of a high-speed connection in the workplace. Activities carried out at work are usually utility-centric, such as using search and directory services, comparison shopping, and reading online news.

·  School and university access develops despite late adoption. French universities were not equipped with PCs as early as US universities were. However, according to the French government, 100 percent of schools and universities are now connected to the Internet, although the number of computers is still limited.

·  Home access driven by increasing PC penetration. By the end of 2000, PC penetration in French households will reach 33 percent, up from 23 percent in 1998. This strong growth is expected to continue, with 48 percent of French households projected to own a PC in 2005. The Jupiter/Ipsos survey showed that 21 percent of current Internet users in France intend to buy a new PC within the next year, indicating that users are updating their PC equipment rapidly.

·  Where will French users access the Internet from in future? Jupiter anticipates access through work and school or university to continue to increase in the future in France; proportionally, it will decline as home access takes a larger share. Increased Internet access at work and school will become a factor in increasing levels of home Internet access and in encouraging French households to go online.

Figure 4: Where Do French Users Access the Internet?

QUESTION ASKS: FROM WHICH OF THE FOLLOWING PLACES DO YOU CURRENTLY ACCESS THE INTERNET?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 673 (FRANCE), N = 902 (UK)

© 2000 JUPITER RESEARCH

France Is Still a Dial-Up World

In the Jupiter/Ipsos survey, over 92 percent of respondents said that they were using the Internet at a speed lower than or equal to 56 Kbps. Jupiter predicts that dial-up access (less than 56 Kbps) will remain dominant for at least the next five years in France, because the following factors inhibit broadband deployment currently:

·  A large number of new online users. Jupiter projects that 6.4 million new French households will come online from 2000 to 2005. The majority of them will start using the Internet in a simple and inexpensive way before possibly moving to broadband offerings.

·  Low overall cable penetration in France. The cable network covers only 27 percent of homes in France, and cable TV penetration stands at 14 percent. Therefore, the potential of Internet broadband access through cable is lower in France than it is in other European countries, such as the Netherlands and Belgium, where the population density is higher, and where broadband cable access is expected to dominate.

·  DSL offering still controlled by France Telecom. France Telecom's monopoly over the last section of lines has hindered the adoption of digital subscriber line (DSL) broadband access in France, and will continue to do so until January 2001 when the market will open to competition. All ISPs commercializing DSL services are acting as resellers of Netissimo, France Telecom's broadband offering, making it impossible to decrease DSL subscription costs currently.

·  Dial-up offerings moving toward unmetered. The price of getting online decreased significantly in 1999 and 2000. French dial-up offerings are moving toward unmetered access as bundling—for example, 20 hours of free local calls for a subscription of €15 ($14) a month—becomes the norm. As some ISPs launch unmetered access with a subscription (e.g., AOL France), broadband's initial advantage—that of being unmetered (in contrast to dial-up offerings)—is less appealing to users. (See, France: Online Projections, French Benchmarking Service, Volume 1, 2000.)

Figure 5: Home Access Connection Speeds

QUESTION ASKS: AT WHAT SPEED DO YOU CONNECT TO THE INTERNET FROM HOME?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 673 (FRANCE ONLY)

© 2000 JUPITER RESEARCH

Communication and Utility Dominate Internet Use in France

The Jupiter/Ipsos survey shows that Internet users in France are focused on communication and utility activities mainly. Low online tenure and low broadband penetration make the Internet as an entertainment platform a distant prospect.

·  Communication activities dominate in France. In France, e-mail is the most popular online activity, with 69 percent of the Internet population using it on a regular basis. Other communication-related applications, such as chat and instant messaging, follow in terms of use, with 19 percent and 16 percent, respectively; the popularity of instant messaging is higher in France than it is in the rest of Europe. In addition to AOL, Yahoo!, and MSN France, France Telecom has launched its own instant messenger version (Le Messager), marketed through its ISP (Wanadoo) and portal (Voila).

·  Utility functions follow. Using search engines, looking at local information, using online directories, reading online news, and visiting travel, sports, and movie sites account for a large share of the online activities of users in France.

·  Online entertainment is at a nascent stage. Entertainment-related online activities remain limited in France, with respondents to the recent survey citing their main online entertainment activities as: visiting music Web sites (29 percent) and playing games (13 percent).

Figure 6: The Most Popular Online Activities

QUESTION ASKS: WHICH OF THE FOLLOWING ACTIVITIES DO YOU CONDUCT ONLINE AT LEAST MONTHLY?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 673 (FRANCE ONLY)

© 2000 JUPITER RESEARCH

The Position of the Internet in French Media Consumption

Time Spent Online Remains Low in France

Online users in France said they spend 4.3 hours online a week, compared with users in the US who spend 7.1 hours, and users in the UK who spend 6.6 hours. Although the Internet penetration gap between France and other countries is narrowing, France still lags in terms of use, for the reasons listed below:

·  Low online tenure. French Internet penetration only began to grow strongly in 1999, therefore Internet users in France have briefer online tenures than their UK and US counterparts. Jupiter research in the US showed that consumers, with a lengthy online tenure, are more likely to increase the average time they spend using the Internet each week.

·  Limited Media Consumption Off-line. Media consumption is traditionally lower in France than it is in the US or the UK. French Internet users spend on average 11.4 hours a week watching TV, much less time than users in the US and the UK who spend 17.5 hours and 15.3 hours, respectively, watching TV. The trend for printed media consumption is similar, with newspaper publications having a much lower per capita circulation in France than they have in the US or the UK.

Figure 7: Average Weekly Media Consumption of Internet Users

QUESTION ASKS: ON AVERAGE, HOW MANY HOURS PER WEEK DO YOU SPEND USING THE INTERNET, READING NEWSPAPERS AND MAGAZINES, AND WATCHING TV?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 673 (FRANCE), N = 902 (UK), N = 2,312 (US)

© 2000 JUPITER RESEARCH

Media Cannibalization Remains Insignificant

In the US, the Internet has altered media consumption patterns significantly, with 22 percent of US Internet users spending less time reading magazines and 40 percent spending less time watching TV after going online. Media cannibalization on the scale witnessed in the US has yet to occur in France, with only 22 percent of Internet users reducing their TV consumption after going online. This translates as less than four percent of the overall off-line population in France. Jupiter believes, however, that media cannibalization will increase in line with Internet penetration levels and online tenure. Meanwhile, French TV businesses must see the Internet as an opportunity, rather than as a threat to their advertising revenues.

Although French TV businesses will face media cannibalization in the future, in the short term to mid-term, revenues will remain largely unaffected. TF1 and M6, the private free-to-air channels in France, each announced a strong jump in its traditional TV advertising revenues during the first quarter of 2000—18 percent growth for TF1 and 28 percent for M6. Advertisers in general are increasing their TV advertising budgets, boosted by the current rapid expansion of the French economy.

Figure 8: Percentage of Internet Users Declaring Declines in Off-line Media Consumption

QUESTION ASKS: HAS YOUR USE OF ONLINE SERVICES OR THE INTERNET AFFECTED THE TIME YOU SPEND READING PRINT MEDIA OR WATCHING TV OVER THE PAST YEAR? CHART SHOWS THE PERCENTAGE THAT ANSWERED "YES".

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 673 (FRANCE), N = 2,312 (US)

© 2000 JUPITER RESEARCH

Cost Continues to Limit Internet Use

Lower costs would increase use of the Internet, according to 53 percent of Internet users surveyed in France. This contrasts with the US market where the low speed of the network is the main barrier to increased regular use. The cost of Internet use has decreased significantly in France since mid-1999, following the appearance of free ISPs—such as Free and LibertySurf—and the launch of bundled access offerings (e.g., 20 hours free local calls for €15 ($14) a month) from major companies—Worldonline, LibertySurf, Wanadoo, and Club-Internet, for example. However, flat-rate access is not yet a reality in France. AOL France launched an unmetered offering in September 2000 for €30 ($29) a month but it requires that users register for a two-year period; currently, the company is reconsidering the offer because of the subsequent rise in traffic. Jupiter expects, nevertheless, that the French Internet market will continue to move toward flat-rate access and that some French ISPs will launch aggressive pricing plans at the end of 2000 to increase Internet use.

Figure 9: Factors that Would Increase Time Spent Online

QUESTION ASKS: WHICH OF THE FOLLOWING ASPECTS OF INTERNET USE WOULD HAVE TO CHANGE IN ORDER FOR YOU TO INCREASE YOUR INTERNET USE?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 673 (FRANCE), N = 2,312 (US)

© 2000 JUPITER RESEARCH

Simultaneous TV and Internet Use Remains Low

Half of all Internet users in France never watch TV when they are online. French households have fewer TV sets than households in the US have, and so it is less likely that the same room would house both a TV set and a PC. Moreover, 29 percent of Internet users in France said they were rarely or never motivated to visit a particular Web site when watching TV while they were online. Only five percent of Internet users in France said they were motivated to visit a Web site advertised on TV, when using both media concurrently.

Figure 10: Percentage of Internet Users that a TV Show Prompts to Visit a Web Site while Online

QUESTION ASKS: WHILE USING THE TV AND INTERNET AT THE SAME TIME, HOW OFTEN DOES A TV SHOW THAT YOU ARE WATCHING MOTIVATE YOU TO VISIT A PARTICULAR WEB SITE?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 673 (FRANCE ONLY)

© 2000 JUPITER RESEARCH

Attitudes of French Internet Users Toward Online Shopping

Spending per Online Buyer Remains Low

Online shopping remains a marginal activity in France, with only two million Internet users—18 percent of the online population—making purchases via the Internet in 2000. Most online buyers in France buy low-consideration goods, such as books and CDs, and therefore do not spend much money online. As a consequence, 81 percent of online buyers in France spent less than €521 ($500) in the 12 months preceding the survey; only 14 percent spent more than $500. In the US, 40 percent of online buyers spent more than $500 during the last year. Jupiter projects that French Internet commerce revenues will grow from €598 million ($574 million) in 2000 to €7.6 billion ($7.2 billion) in 2005. The elements listed below will fuel growth in France:

·  Between 2000 and 2005, 14 million new Internet users are expected to go online.

·  The percentage of Internet users who shop online will increase to 50 percent in 2005.

·  Annual online spending per user will rise from €305 ($293) in 2000 to €623 ($598) in 2005.

Figure 11: Average Online Spending per User in the Last 12 Months

QUESTION ASKS: APPROXIMATELY HOW MUCH DID YOU SPEND IN THE PAST 12 MONTHS SHOPPING ONLINE?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 68 (FRANCE), N = 289 (UK), N = 664 (US)

© 2000 JUPITER RESEARCH

Online Buyers in France Do Not Make Impulse Purchases

Online buyers in France use the Internet as a way to acquire products they have already decided to buy—93 percent have a specific item in mind when they go online; only three percent browse without a specific item in mind. Another four percent said they had no intention of making a purchase when going online but ended up buying an item on impulse. Jupiter identified similar online shopping behavior in other countries where it conducted a survey, but online buyers in France had the strongest focus on specific items. This usage pattern resembles the method of buying through the Minitel in France. Most people, while using the Minitel for shopping purposes, already know which products they want to buy—usually through having looked at a company's mail order catalogue—and use the platform to place the order.

Figure 12: Attitudes of Online Buyers when Making Purchases via the Internet

QUESTION ASKS: WHEN MAKING PURCHASES ONLINE, WHICH SENTENCE BEST DESCRIBES YOUR ATTITUDE?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 68 (FRANCE ONLY)

© 2000 JUPITER RESEARCH

Better Security and Trust Necessary for Non-Shoppers to Become Buyers

More secure transactions, contact and discussion with online merchants, and trust in online merchants are the main factors that would motivate Internet users in France to start shopping online. Online merchants operating in France must convince users of the benefits of online shopping and address security issues. Among French Web sites, 450, including online travel service Travelprice and auction site iBazar, have implemented FIA-NET, an online insurance policy underwritten by French insurance giant AXA. The FIA-NET label gives online buyers insurance against all factors that could affect a transaction (e.g., security breaches, non-delivery, etc.).

Figure 13: Factors that Would Motivate Users to Start Shopping Online

QUESTION ASKS: WHAT WOULD MOTIVATE YOU TO START BUYING PRODUCTS ONLINE THIS YEAR?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 605 (FRANCE ONLY)

© 2000 JUPITER RESEARCH

Better Prices and Security Would Entice Buyers to Buy More

More than 50 percent of online buyers in France said they would buy more on the Internet if they could benefit from better prices. As well as better prices, concern about the security of transactions is a barrier to additional online spending. Accustomed to smart cards and off-line authentication, Internet users in France are reluctant to forgo such security measures in the online world. To build a sustainable, competitive advantage, companies must focus on sophisticated and reliable payment systems and deliver excellent customer service. The relatively poor quality of off-line customer service in Europe has not enabled companies to build trust with customers—those merchants that succeed in doing so online will have a strong asset.

Figure 14: Factors that Would Motivate Buyers to Make Additional Purchases Online

QUESTION ASKS: WHAT WOULD MOTIVATE YOU TO BUY MORE PRODUCTS ONLINE THIS YEAR?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 68 (FRANCE ONLY)

© 2000 JUPITER RESEARCH

Payment Options Must Include Checks in France

The majority—77 percent—of online buyers in France use a credit card or debit card to pay online. However, 13 percent prefer personal checks and, because checks are popular off-line, Jupiter believes that all online merchants operating in France must propose this payment method. Offering payment by check is a good way to encourage online shopping among those concerned about entering their credit card details online, allowing them to use a payment method with which they feel comfortable.

Figure 15: Payment Methods Used in Online Transactions

QUESTION ASKS: WHAT IS THE MAIN TYPE OF PAYMENT METHOD YOU USE TO PURCHASE ITEMS ONLINE?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 68 (FRANCE), N = 289 (UK)

© 2000 JUPITER RESEARCH

Little Interest in Shopping on Mobile Phones

Only five percent Internet users in France selected shopping as one of the three interactive services they would find most appealing on an Internet-enabled phone. E-mail and other more time-sensitive and location-sensitive services, such as current news, sport scores, maps, and directions held greater appeal. Jupiter estimates that there will be a mere 700,000 Internet-enabled handsets in France at the end of 2000, but projects that this will grow to 46 million in 2005. The current antipathy toward shopping via mobile phones by Internet users in France, many of whom have never owned an Internet-enabled phone, does not mean that there is no future for this wireless service. Mobile phone operators as well as retailers must develop compelling shopping propositions to make wireless shopping an enticing proposition in France.

Figure 16: Internet Services that Users Would Like to Access Through Mobile Phones

QUESTION ASKS: WHICH THREE OF THE FOLLOWING INTERNET SERVICES WOULD YOU FIND MOST APPEALING ON A MOBILE PHONE?

SOURCE: JUPITER/IPSOS ONLINE USER SURVEY (8/00), N = 673 (FRANCE ONLY)

© 2000 JUPITER RESEARCH

Report Methodology

All the consumer response Figure ures listed in this report are taken from a major Pan-European Online User Survey conducted during August 2000 by Jupiter, in conjunction with Ipsos, its exclusive European survey provider.

The French segment of the survey consisted of 673 Internet users and all information was gathered using Capibus, Ipsos's in-home weekly omnibus. Capibus uses the latest CAPI technology to interview at least 1,000 adults a week in each survey country, and the sample is rigorously controlled to ensure that it is random and representative of the national adult population. From this initial 1,000-strong sample, 673 Internet users were identified and asked questions about their online attitudes and behavior. The results were subsequently weighted according to demographic and social variables, and where necessary further interviews were fielded to ensure that the sample met these requirements.

About Ipsos

Jupiter works with Ipsos to field surveys that Jupiter analysts design and use to develop insights into the European online marketplace. Jupiter has worked with Ipsos since 1999, utilizing the latter's European consumer panels and omnibus survey instruments to conduct research in the UK, France, Germany, Italy, Spain, the Netherlands, Finland, Sweden, and Norway.

Ipsos, founded in France in 1975, is the ninth biggest research group in the world, with companies in 24 major countries across Europe, North America, Latin America, the Middle East, and Asia-Pacific. Ipsos serves clients both large and small, offering national and international companies complete research solutions.

Ipsos offer expertise in areas as diverse as: media, advertising, customer satisfaction, opinion polling, brand/marketing, and Internet-based research through its specialist Ipsos Interactive division.

Ipsos's experience in the field of Internet research is extensive. Ipsos works closely with MMXI in Europe and Media Metrix in Latin America, and is the preferred supplier to some of the world's biggest Internet companies, including Jupiter. To date, Ipsos has worked with more than 300 clients to deliver Internet-based, research solutions around the world.

In response to the growing needs of business, Ipsos has developed a range of services for the online market, covering:

·  Web site evaluation—both online and laboratory-based;

·  Web site visitor profiling;

·  Banner ad testing;

·  Opinion polling via an omnibus;

·  Custom-made online research.

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