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Online Shopping Sales in Asia to reach US$168.7 billion by 2011

Search ASIA Travel Tips .com Latest Travel News Send to Friend Thursday, 26 June 2008

With increasing consumer interest in online shopping, the amount of trade that is conducted electronically has seen extraordinary growth. According to MasterCard's latest Insights Report, Online Shopping in Asia Pacific - Patterns, Trends and Future Growth, this growth is poised to further accelerate in the region and is expected to increase at an annual rate of 23.3%, reaching US$168.7 billion by 2011.

The report, which analyses consumer behavior in relation to e-commerce across the region (Australia, China, Hong Kong, India, Japan, South Korea, Singapore and Thailand), reveals that the focal point of this growth is likely to shift from the consumers in Japan to new consumer populations in China and India. Some of the key findings include:

63% Survey Respondents Shop Online; South Koreans and Japanese Most Active Shoppers (83% each)

In terms of total spend on shopping online the survey revealed that online shoppers in the region spent an average of US$612.40 online over a period of three months, with Singaporean ($770.70) and South Korean (US$707.50) consumers emerging as top spenders. Online shoppers from Thailand and Hong Kong were the least active, making an average per person purchase of 1.8 times and 2.1 times respectively.

44% of online shopper respondents indicated that they have been shopping online for more than three years now, with 76% indicating that they will make a purchase in the next six months. More specifically, a majority of respondents from South Korea (93%) and China (87%) were likely to make an online purchase in the next six months.

Japan to Lose Pre-eminence as China Leads Region in Online Shopping Market Size by 2010; India Will Rise Strongly to Emerge Second

The rising population of upper-middle-income urban elites is likely to boost the online shopping markets in China and India significantly. Domestic consumption spending in the two countries is poised to pick up strongly, underpinned by a rapid pace of urbanization, robust economic expansion and rising spending power of urban elites.

By 2010, Chinas online shopping population is projected to increase to 480 million and contribute to 58.6% of the total online shopping population in the region compared to 49.9% that it does currently. Meanwhile, Indias online shopping population is poised to overtake Japan and Korea in terms of share of the online shopping population in the region.

Additionally, 2010 will see China offering by far the largest market in Asia Pacific in terms of online shopping revenue turnover - US$1415.7 billion compared to the $297.8

Focus Centers of E-Commerce Set to Shift as Online Sales in Asia reach US$168.7 billion by 2011 billion in 2007. India in the interim will rise strongly (from US$70.8 billion in 2007 to US$734.3 billion projected in 2010), to emerge as the second largest online shopping market in the region in terms of revenue turnover.

Majority of Region's Shoppers Plan Purchases and Conduct Research before Spending Online

A majority (84%) of online shoppers in the region tend to plan their shopping in advance and conduct research on their planned purchases, including browsing on the internet (87%) and the merchant's website (61%) and through recommendations (47%). The level of opportunistic spending online therefore does not seem to be a major factor for many online shoppers, with tendency for impulsive spending in e-commerce varying widely among markets in the region. Some 41% of respondents across the region had bought on impulse while shopping online, with 34% indicating that they hardly ever bought on impulse.

In markets such as Singapore, South Korea and Australia, which are somewhat more mature financially, only about 10% of shoppers frequently made opportunistic purchases. This proportion jumped drastically in markets like India (30%), China and Thailand.

For those who made opportunistic purchases online, they attributed this to the low prices/ substantial discounts they found (74%). Other factors included the availability of unique items available only online (48%) and advertisements and promotions (33%).

Internet Penetration Rate, Income Level & Culture Key Factors Driving Online Shopping Penetration in the Region

Based on analysis conducted, a strong relationship (an 87.1% possibility) was found to exist between the online shopping penetration rate and the above three factors.

Asia Pacific markets with higher internet penetration rates (Japan, Korea and Australia) were reported to have higher online shopping penetration rates. While China has one of the lowest internet penetration rates (15.9% of population), the online shopping penetration rate this small group was unusually high at 70% - indicating that the online population has a high tendency to make online purchases. Similarly, higher-income markets tend to have relatively higher online shopping penetration rates.

Based on the survey where respondents were asked their reasons for not making purchases online, the cultural affinity for online shopping across the region was analyzed as part of the report. A key finding was that cultural factors in Hong Kong tend to be less favorable towards online shopping activity compared to other developed countries such as Australia, Japan and Korea.

Secure Payment Facility, Price and Convenient Payment Methods Top Factors Affecting Propensity of Online Shopping

While consumers in Asia Pacific perceived online shopping to be convenient (71%) and easy (66%), 87% of the regions online shoppers regarded secure payment facilities and price as the most important factors affecting their tendency to shop online. These were followed by convenient payment methods (85%).

Credit Cards Top List of Preferred Form of Online Payment Methods in Asia Pacific

Credit cards were the dominant and most preferred mode of payment for online shopping in most of Asia Pacific (53%), with the exception of China (25%) and Thailand (41%), where debit cards were preferred. In most markets, consumers indicated that they would shop more online and use more of their credit cards if their security concerns were allayed. On average, 74% of online shoppers in the region felt that payment security and user confidence in online transactions could be improved.

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