Taiwan's Online Shopping Taking Off

With the growing acceptance of local buyers, Taiwan's B2C (business-to-consumer) e-commerce sector is taking off, with four major online stores predicting that they will double revenue growth this year.

Those that expect 100% business growth this year include Pchome Online, Yahoo!Taiwan's virtual shopping center, ET Mall's shopping site, and Eztravel.

Eztravel, an online travel agency that books travel arrangements in Taiwan and abroad, predicts that its revenue this year will hit NT$7 billion, for a growth of almost 100%. Yahoo!Taiwan's virtual shopping center projects a revenue of NT$2.8 billion, more than tripling 2004's NT$800 million. Pchome's online sales of IT products reached NT$400 million in October, double last year's level during the same month, and the company is confident that it will maintain a similar growth for the whole year.

The overall scale of Taiwan's B2C market (excluding online auctions) is expected to hit NT$59.06 billion this year, 53.2% more than the 2004 level, according to the Market Intelligence Center (MIC) under the aegis of the Institute for Information Industry. The B2C sector is projected to account for 1.61% of the island's total retail sales, up from last year's 1.1%. The MIC attributes the phenomenal B2C growth this year to local consumers' increasing experience with Internet applications, a growing reliance on the Internet for everyday tasks, the rising numbers of young people enjoying shopping online, and to the mature development of cash flows and commodity deliveries for online shopping.

Industry insiders believe that regardless of the performance of the local economy next year, online shopping will continue to grow at a phenomenal rate, thanks to the growing maturity of the market and consumers. As part of this trend, a certain percentage of consumers are expected to shift from shopping at brick-and-mortar retailers to online shopping sites.

Hsieh Chen-feng, chief operating officer of Pchome Online, reports that the Internet shopping business amounts to 6-7% of overall retail sales in the U.S. Taiwan, at 1.6%, lags three to four years behind that level. With this large development room and the growing number of consumers who trust that they can safely buy products over the Internet, the online shopping business is expected to continue developing at vigorous pace in Taiwan for the next several years.

Growth of Taiwan Online Shopping Market
	2001	2002	2003	2004	2005	2006
Market scale (NT$100 M.)	89.8	151.4	241.4	389.2	596	890.8
Growth rate	N/A	68.6%	59.4%	61.2%	53.2%	49.4%
Share in overall retail sales	0.3%	0.48%	0.75%	1.1%	1.61%	2.29%
Source: MIC, III