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PC Home Online to test Taiwan's e-commerce waters

"We estimate that the software Web site will bring in NT$80 million next year."

Jan Hung-tze, chief executive officer of PC Home Group

PC Home Online (網路家庭), Tai-wan's fourth-largest Internet portal, kicked off yesterday its online software store. The company plans to rake in NT$80 million in sales next year on a product lineup of over 600 items.

The company is ignoring widespread speculation that the business-to-customer (B2C) electronic commerce platform will not succeed in Taiwan, as a result of a convenient shopping environment and online security concerns.

"The Internet is a perfect marketplace to sell software ? customers can buy products at any time with just a click," Jan Hung-tze (詹宏志), CEO of PC Home Group, which owns PC Home Online, said at a launching ceremony yesterday.

As the largest virtual software retailer in Taiwan, PC Home Online currently works with over a hundred software makers to provide a wide range of software including multimedia, graphics and network tools, Jan said.

These software companies include Microsoft Corp, anti-virus software makers Trend Micro Inc (趨勢科技) and Symantec Corp, and software agents GrandTech CG Systems Inc (上奇科技) and Reallusion Inc (甲尚科技).

Unlike brick-and-mortar stores or online software retailers that merely sell box-set software, PC Home Online's Web site allows consumers to choose an Electronic Software Distribution (ESD) version, meaning the customer can download products over the Internet. The ESD version of a software product will be cheaper than box-set software, as there is no packing-and-delivery charge.

Tu Tze-chen (杜紫宸), president of GrandTech, the agent for the Adobe series of products in Taiwan, said he is confident that the Internet will gradually become the main platform for software sales.

"I'm surprised that we sold more products on the Internet than in general stores," Tu said. "These changes in shopping behavior will make the Internet a more important marketing channel."

Jan agreed with Tu, saying that online business is still a sector worthy of investment.

In fact, Jan indicated that the new software sales model is built on the company's success with its software-downloading Web site toget.pchome.com.tw, which offers both freeware and purchasable software.

The site has brought in considerable profits for the company. Along with PC Home Online's shopping site, the software site garnered about NT$100 million per month for the company, Jan said.

"We estimate that the software Web site will bring in NT$80 million next year," Jan said.

But not every company has reason to be so optimistic about its e-commerce platforms. A survey released by TechVantage Magazine (e天下雜誌) last week indicated that the nation's small-and-medium sized enterprises, which constitute 98 percent of the country's industries, would have a difficult time capitalizing on B2C e-commerce, considering a lack of funds and network-savvy personnel. But Jan said companies might be able to overcome this handicap by pooling their resources.

An example he cited was eBay Inc, the world's largest online marketplace well-known for its auction services. EBay also provides space for small companies to conduct business.

"This is also a pattern that local companies should try first before they arbitrarily conclude that B2C e-commerce in Taiwan has no future," Jan said.
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