Brick-and-mortar stores are a necessary part of building consumer confidence in online shopping, the head of Internet portal Yam.com (
"The key to running a successful e-commerce business is to have actual retail stores that back up [the Web-shopping sites]," Yam CEO Chen Jen-ran (
Ten percent of the company's revenues last year came from online shopping.
But deliveries of online purchases currently move via postal or express delivery services and are not offered in retail stores.
Chen said that the company has learned that consumers are more comfortable spending online if they can check the products out at actual stores. "Therefore, we plan to integrate our e-commerce service with retail stores," Chen said.
Yam is not new to the industry. In China, Yam subsidiary CyberMart (
He refused to elaborate on what new stores the firm would establish in Taiwan, but did say that "most of them will be through alliances with current players rather than through buyouts."
Yam currently owns a 13 percent share in CyberMart.
One industry watcher called Yam's new business model "the right strategy." "Both the delivery system and payment mechanism are critical parts of the e-commerce business," said Kuo Cheng (郭貞), a professor in the advertising department at National Cheng-Chi University.
Without a physical store to go to, consumers may worry about where can they exchange, refund or get their goods repaired, she said. "Companies have to take consumer shopping habits into consideration and make them feel comfortable to spend," Kuo said.
According to an Internet usage survey revealed by Yam yesterday, online purchases declined in frequency and dollar amount.
In the period from June to November last year, Web purchases made up only 3.7 percent of online activities, down from 4.1 percent the year before. The average amount for each online purchase last year dropped about 30 percent over the year 2000.
Kuo said that although the bad economic climate last year impacted the public's purchasing power, the main reason behind the poor e-commerce record is a lack of market preparation.
"With credit-card fraud on the rise, people are still afraid of using plastic money online," Kuo said.
In addition, the payment system and security mechanism between Web sites, banks and customers still has a lot of room for improvement, she said.
The survey said online content such as fortunetelling and new services saw large growth.
Nevertheless, Kuo said e-commerce still has a long way to go. "I believe we have to wait for several years before e-commerce become popular," Kuo said.
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