E-Tail of the Tiger: Retail E-commerce in Asia-Pacific

E-Tail of the Tiger: Retail E-commerce in Asia-Pacific

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E-Tail of the Tiger: Retail E-commerce in Asia-Pacific

Consumer & Retail, Marketing & Sales
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    In This Article
    • E-commerce will soon transform consumer markets throughout Asia. But its success depends on the development and lasting strength of four basic factors that are outlined in this report.


    Summary of Key Findings

    Online retailing is speeding ahead in Asia-Pacific, reaching US$2.8 billion in 1999

    • Online retail revenue in 1999 exceeded US$1 billion for the first time, rising to US$2.8 billion

    • Growth was extremely rapid, up almost 200%, from less than US$1 billion in 1998

    • Internet use also surged with 27 million new users and 66 million total online in 1999, according to the Yankee Group

    Japan leads in size, but online retailing has gained most ground in Korea and Australia

    • Online retail revenue in 1999 reached US$1.5 billion in Japan, US$720 million in Korea and US$380 million in Australia

    • Online retail revenue per capita is US$20 in Australia, US$15 in Korea and only US$12 in Japan

    • Online penetration of the retail sector is 0.3% for Australia and Korea, and less than 0.1% for Japan

    Outside of Japan, Korea and Australia, the market is still tiny

    • Online retail revenue in the rest of Asia reached only US$180 million in 1999, as most markets have less than US$30 million in total revenue

    Growth potential is high

    • The retail e-commerce market is still small compared with the US, which topped US$36 billion in 1999

    • Online penetration of the retail sector in Asia is only 0.1%, compared to 1.2% in the US

    • Online retail revenue per capita is just US$0.98, compared with more than US$100 in the US

    • Growth of more than 150% from 1999 is expected this year, with online retail revenue topping US$7 billion in 2000

    Leading online retail categories are computer hardware and software, and financial services

    • These two categories make up 53% of the market in 1999, with US$780 million and US$700 million in revenue, respectively

    • The next most important categories are travel, books and tickets, with revenue for each between US$120 million and US$320 million

    • By comparison, the US's three leading categories are computer hardware and software, travel and financial services

    However, category mixes also vary widely by country

    • Often driven by the activities of a few aggressive players

    • Expect the mix to change as markets evolve and new entrants jump in

    Consumer interest in online shopping is rising

    • The online population in Asia is expected to reach 230 million by 2003, according to the Yankee Group

    • Surveys show the ratio of Internet users who have shopped online is increasing

    Retail e-commerce will have deep ramifications for traditional retailing in Asia

    • Asia's wealthiest will shop online

    • More of Asia's women will shop online

    • Expectations in terms of selection, price, customer service and convenience will rise rapidly

    • Traditional retailers who lose this segment will suffer

    Retailers, old and new, are rushing online

    • 1,650 sites in Asia, outside of Japan, are actively selling online

    • Many more new entrants are expected, particularly traditional retailers

    Online-only retailers (pure-plays) outnumber multichannel retailers (online and offline), but multichannel players attract most of the revenue

    • 52% of retail e-commerce Web sites, outside of Japan, are operated by pure-players

    • Multichannels have a 74% share of revenue across Asia, compared to 62% in the US

    • Multichannel players earn more than 70% of online retail revenue in Singapore, Korea, New Zealand, Malaysia, Hong Kong, Japan and Taiwan

    • Reflects advantages multichannel players have in pre-existing assets and capabilities

    A number of barriers have created difficulties for online retailing in Asia, but these are beginning to recede

    • Access to the Internet has been difficult and costly in the past, but is improving

    • Delivery platforms in many countries are fragmented and not scaleable, though online retailers are developing imaginative solutions

    • Credit card use is low in many countries, but online retailers are finding alternatives

    Asia's less-developed countries remain very difficult retail e-commerce environments

    • Consumers in Thailand, Malaysia and Philippines are slow in showing interest in retail e-commerce

    • India, Indonesia and China markets remain small, reflecting low wealth levels and poor infrastructure

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