Fri, Jan 20, 2006 - Page 10 News List

Boom in Internet shopping set to continue, MIC says

By Jason Tan  /  STAFF REPORTER

Twenty-seven-year-old Elsa Wen (溫謙慈) loves to shop for her own clothes and consumer electronics items on the Web, and spent NT$20,000 to buy about 25 different items on the Internet last year alone.

"Online shopping offers me a convenient venue to make my purchases without leaving the house," said Wen, a young and energetic account supervisor working at a Taipei-based public relations company.

Wen is just one example in the booming the local online shopping market, which is expected to report 49 percent growth in value this year from last year, according to the latest statistics from the Market Intelligence Center (MIC, 市場情報中心).

The market value this year is expected to hit NT$89.3 billion (US$2.78 billion), from last year's NT$59.8 billion, with the figure expected to soar to NT$131.1 billion next year, the Taipei-based research firm said.

Online shopping will account for 3.2 percent of the retail sector's business next year, up from 2.3 percent this year and 1.6 percent last year, MIC said.

"The market will continue to prosper as Internet users nowadays have more confidence in Internet security and more traditional retailers are fast moving into cyberspace to explore new market opportunities," MIC analyst Hazel Chen (陳樺誼) said at an e-commerce seminar yesterday.

According to Chen, travel products including airline tickets were the hottest online shopping items last year, with a 63 percent share of the market, far ahead of the No. 2 item -- computers, communications and consumer electronics products -- which had a 9 percent share.

Tickets for trains, buses and performances were the third-hottest item, at 8 percent, while beauty-care products followed at 6 percent, Chen said.

While travel products are expected to continue their momentum this year, beauty care and apparel goods will record the highest growth within the next two years, she said.

"The expansion in these two segments is due to rising spending power among women, as female online shoppers exceeded their male counterparts for the first time last year at 52 percent. This trend will definitely continue," Chen said.

In addition to the convenience of shopping online, many surfers are attracted by lower prices, she said.

Items available are generally 10 percent cheaper than those from traditional shops, and this is especially true of travel products, she said.

MIC's survey also showed that though the entry barrier for setting up an online sales outlet is low, 36 percent of cyber shops failed over the last two years.

Most of the ventures that collapsed were selling electronics products, flowers and beauty care services, and faced difficulties because of an overcrowded market or shorter product life cycles, the survey found.

"To be successful in the electronics space, people should develop unique services to differentiate from rivals and cater to the tastes of women, given rising female spending power," Chen added.

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