Home >Companies >Online shopping: sales in Asia may rise 20% a year

Singapore / Taiwan: From dresses to handbags, diamonds and music downloads, consumers in Asia are taking to Internet shopping like never before as the region becomes one of the world’s fastest growing e-commerce markets.

“I like to shop for clothes online because no sales girls will pester me," said Cecelia Wang, 23, a university student in Taipei, who spends about Taiwanese $1,500 (about Rs2,191) a month on Internet purchases. “For online shopping, all I need to do is sit in my room and shop, which is great."

Internet retailing is increasingly making its presence felt in Asia because telecommunications infrastructure has improved, and payment modes, a major obstacle, are now more secure, analysts say.

Internet penetration rates is about 17% in Asia versus 73% in North America and almost 50% in Europe, according to www.internetworldstats.com

As more people in Asian countries such as China and India get hooked up to the Internet, online sales are expected to rise by an average of 20% a year. In some markets, such as Japan, they are expected to increase by as much as 40% annually. “There is a huge opportunity for retailers in Asia-Pacific to benefit from the cost-savings of operating online," said Sandra Hanchard, a senior analyst at online intelligence service Hitwise, a subsidiary of Experian Group. “Surfing the Internet is now a mainstream lifestyle activity. More and more traditional retailers are realizing that this is an opportunity to connect directly with consumers."

Although the global economic downturn has affected both traditional and online retailers, analysts say the gloomy economic outlook is actually encouraging consumers to hunt for second-hand goods online or make greater use of auction and rental websites such as Thatbagiwant.com

Amazon.com and eBay are among the most popular sites in Asia. In China, e-commerce firm Alibaba.com operates an online site connecting importers and exporters of Chinese goods.

On eBay India, which has at least 2 million registered users, top purchases in 2008 included gemstones, mobile handsets, MP3 players, women’s apparel and stamps and coins, said Deepa Thomas, eBay India’s senior manager of pop culture.

The company’s sales show that despite relatively low Internet penetration, Indians have readily embraced online shopping. “Earlier, people only bought easily affordable items, but now they’re also buying more high-value items and unusual items as they have more confidence shopping online," said Thomas. Market research firm Euromonitor International forecasts Internet retail sales in the Asia-Pacific region will reach in excess of $71 billion (Rs3.54 trillion) by 2012, almost double that of 2007. Asia still lags behind the US, where Forrester Research projects online spending in 2009 to reach about $156 billion, up from $141 billion last year.

Hanchard, the analyst at Hitwise, says online retail in the Asia-Pacific region has been slow to develop compared with Europe and the US.

However, there are drawbacks. “The last thing I bought was a watch. It took me almost three months to sort out the delivery," said Annabelle Aw, a 30-year-old events organizer in Singapore.

Simone Giuliani in Melbourne and Rina Chandran in Mumbai contributed to this story.

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