China and India to lead e-commerce

The two booming economies are leading online shopping on an upward trajectory in the region, set to eventually topple Japan and South Korea, finds study.
Written by Victoria Ho, Contributor

Online shopping in the Asia-Pacific region is accelerating at an annual rate of 23.3 percent to hit US$168.7 billion by 2011, with the region's new markets such as China and India fueling this growth, a MasterCard study has found.

The study ranked Singapore and South Korea as the region's top online spenders, with Thailand and Hong Kong at the bottom of the list.

Overall, the Asia-Pacific region was found to be an active one for online shopping, where 76 percent of respondents said they intend to make a purchase in the next six months.

The survey also highlighted the rise of shoppers in the fast-growing markets of China and India. "The rising population of upper-middle income urban elites is likely to boost the online shopping markets in China and India...underpinned by a paid pace of urbanization, robust economic expansion and rising spending power," noted the study.

Activity from these markets is expected to topple the current "pre-eminence" of Japan and South Korea in terms of share of the total online shopping population in the region. The study projects China's online shopping population to increase to 480 million by 2010.

To better regulate the online shopping phenomenon in the country, China's Ministry of Commerce last month announced the drafting of two new regulations which award licenses and qualify online businesses as legal merchants.

Shoppers in the region are informed
According to the study, a majority, or 84 percent, of Asian online shoppers planned their shopping in advanced and conducted online research on items. Among those polled, 34 percent said they "hardly ever bought on impulse".

MasterCard said this number might be higher in more financially mature markets; in Singapore and South Korea, about 10 percent of shoppers frequently made such "opportunistic" purchases, compared to 30 percent in India, and China and Thailand.

While the study made a strong connection between Internet penetration and online shopping, China was an anomaly in the figures because it had "one of the lowest" penetration rates at 15.9 percent, but an "unusually high" shopping rate of 70 percent. The results went on to say that this indicates the country has a "high tendency" to shop online.

Overall, 87 percent of the region's shoppers regarded secure payment facilities and price as the most important factors involved with online shopping. Convenient payment methods followed, also high up on the list at 85 percent.

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