Study shows bright future for nation's online market

Retail spending is moving from brick-and-mortar outlets to the Internet, and the future of electronic commerce looks bright in Taiwan, according to the semi-official Market Intelligence Center (MIC, 市場情報中心).

Domestic online spending is expected to amount to as much as NT$59.61 billion (US$1.87 billion) this year, up 53.2 percent from a year ago, the research house said in a report released yesterday.

"Eighty-three out of every 100 Internet users buy goods and services online," David Chou (周樹林), a senior research manager at the MIC under the Institute for Information Technology (資策會), said at a press conference.

In a study conducted between March 30 and April 20, more than 60 percent of Internet users expressed an interest in online auction activities. Based on this, the MIC predicted that the market size of Internet auctions may reach around NT$31.79 billion this year, a jump of 65.3 percent from NT$19 billion last year.

The study indicated that female users are more active overall than males when it comes to shopping online, and that the popularity of online auctions has modified consumers' e-commerce behavior.

The survey also showed that instant messaging has become the most popular online tool, the MIC said.

According to the survey, 76.3 percent of Internet users used instant messaging this year, exceeding for the first time the popularity of search engines (72.2 percent) and e-mail (74.8 percent).

The growing popularity of instant messaging has boosted its commercial value, as has been the case with blogs or online forums, Chou said.

Last year, the usage of search engines was at No. 1, while instant messaging was at No. 3, the MIC report showed.

According to the research, the travel-related segment had the largest online market share last year, accounting for 62 percent of online spending.

According to MIC analyst Hazel Chen (陳樺誼), beauty products have a lot of potential as a result of the increase in the rate of female online shoppers.

But not all online stores turned a profit. The average exit rate last year was 36 percent. The highest exit rate, 44.8 percent, was in the beauty-care segment, while the travel sector had the lowest exit rate at 14 percent.

"This is because the travel-related companies are relatively big, the scale of market growth is high and products are concentrated, so the competitiveness is relatively stable," Chen said.