By Claire Moffat

Just months after launching its much awaited online trading site, Harvey Norman chairman Gerry Harvey said the company is cutting back on plans to achieve five percent of its business online.

On Friday, Harvey said the company's recent online trading figures had been unimpressive.

“When we set up the online transactional site a couple of months back, we saw it being about five per cent of our turnover, but at the moment it's not going up at all, it's still sitting at about 0.5 of one per cent.”

According to Harvey, the company’s original target of five percent of trade online within two years was being revised to between one and two per cent. He believes that the original target was an “enormous” overestimation.

NAB Index says 5% is the right figure

However, Harvey Norman's recent online experience is out of synch with February's National Australia Bank (NAB) Online Retail Sales Index, which showed online represented 4.9% of Australia's $216 billion retailing industry.

A controversial voice within the online sales debate, Harvey maintains there was a widespread misconception that large volumes of sales were driven through online retailing.

On Wednesday Harvey Norman reported first half net profit fell by 2.1% and the company said it would continue to heavily discount televisions and computers in the difficult retail environment.

Shares in the company are trading at less than half their September 2009 levels amid heavy discounting of electronics goods, while Australian shoppers increasingly turn to the internet.

Yet Harvey continues to aspire to become a major player in online retailing in Australia.

“We're trying to do that with our Harvey Norman model and our Harvey Norman Big Buys model ... we'd like to be in that position,” Harvey told the media. “Whether we ever end up there or not, I don't know.”