The Taipei Exchange (TPEX) is to add e-commerce as its 28th industry category to help promote growth among local operators as well as start-ups looking to enter the sector, which is included in the government’s “five plus two” industrial innovation program.
Companies which derive most of their revenue from online sales would be eligible to be listed in the e-commerce category from March, following the completion of the change to the exchange’s back-end information systems, TPEX said.
Specifically, companies that have garnered at least 50 percent of their annual revenue from online sales in the past year, or 80 percent in the past two years, are eligible for the new category, TPEX said, adding that applicants’ financial statement submissions must be approved by accounting firms.
Currently, a number of local e-commerce operators are listed under the information technology and cultural and creative industry categories.
However, the change does not cover online gaming companies, TPEX said, adding that it is in talks with five companies about relisting under the electronic commerce category.
Leading e-commerce platform PChome Online Inc (網路家庭) is facing pressure from foreign competitors such as Singapore-based Shopee Taiwan Co Ltd (樂購蝦皮) that have been focusing on sharp discounts in a bid to rapidly capture market share.
Securities and Futures Bureau Deputy Director-General Wang Yung-hsin (王詠心) has said that while Shopee has been attracting venture capital funding and its parent company made an initial public offering on the New York Stock Exchange, the company would not be eligible for a listing in Taiwan.
As a result of its aggressive marketing strategy, the Singaporean company has reportedly been operating in the red amid cutthroat competition.
As online retailers do not hold significant technology patents, the interests of investors cannot be ensured while profitability remains uncertain, Wang said.
The TPEX last year gained 18.65 percent to finish the year at 148.52 points, outperforming the TAIEX’s 15.01 percent rally to 10,642.28 points.
Attracted by the halving of day trading taxes as well as ongoing tax reforms, active traders saw increased investments in shares of local medium and small-cap firms.
In related news, an amendment to customs tax laws lowering the tax exemption threshold for foreign e-commerce platforms from NT$3,000 to NT$2,000 (US$100.51 to US$67) took effect yesterday.
The change, aimed at ensuring price-competitive fairness between local e-commerce and foreign operators, also revokes the tax exemption for frequent buyers who have made overseas purchases more than six times either in the first or second half of the year.
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