Thu, Sep 12, 2013 - Page 13 News List

PChome poised to tackle Chinese e-commerce sites

CHALLENGE:The chairman said that once the firm starts operating in China, most of its employees will probably be located there, including himself as well

By Camaron Kao  /  Staff reporter

Online shopping portal PChome (網絡家庭) yesterday said it would raise funds locally to launch an e-commerce service in China before the beginning of next year.

“We aim to challenge Chinese e-commerce sites Taobao Mall (淘寶) and JD.com (京東) to be the largest e-commerce site in China,” PChome Online Inc chairman Jan Hung-tze (詹宏志) said.

Speaking on the sideline of a cross-strait e-commerce forum held by Sen Sen Home Shopping Co (森森百貨), which operates three local TV shopping channels, Jan said PChome will allocate most of its employees to China after opening its business there.

“Even I may work in China,” Jan said. “There are a lot of ways we can conduct our business, and we are still evaluating all options.”

WAITING FOR PACT

Jan declined to reveal the amount that PChome plans to raise, saying that the planned investment needs to take into consideration of the progress of the cross-strait service trade agreement, which is still under review in the legislature.

“After the legislature ratifies the agreement, we can have 55 percent shares in a Chinese joint venture, and therefore we can launch e-commerce services there,” he said.

PChome operates e-commerce sites in Taiwan and the US and is scheduled to provide the services in Japan by the end of this year, Jan said.

The company set up a subsidiary in the US to run an e-commerce Web site in April, but all the products it sells are shipped from Taiwan because of the relatively low sales, Jan said, adding that its Japanese business will follow the same model.

Currently, orders of NT$20 million (US$67.28 million) a month from the US and orders of NT$5 million to NT$6 million a month from China accounted for the largest share of its e-commerce sales outside Taiwan, Jan said.

“As our Web site is being blocked in China, customers have to bypass the obstacles established by the Chinese authorities to make a purchase,” Jan said. “We expect our sales in China will grow significantly when we enter that market.”

PAYMENT PROBLEMS

Taiwan’s government last month removed a ban on non-financial institutions entering the third-party payment services business, but Jan said the government’s ceiling of NT$200,000 for each account is not enough.

Jan said he is thinking of setting up a new company with NT$300 million in capital to provide the payment services for PChome, which would mean customers would no longer have to use a bank account to make payments.

“We plan to have a new payment system ourselves to better integrate the e-commerce service and online payment service,” Jan said.

The company posted revenue of NT$10.54 billion for the first eight months of the year, up 5.91 percent from NT$9.95 billion a year ago, according to the company’s filing to the Taiwan Stock Exchange.

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