E-commerce in Asia: Japanese online retail sector most sophisticated, China to grow fastest

Online retail represents the next major area for retail growth in Asia, according to a new study by the Economist Intelligence Unit and PriceWaterHouseCoopers China that was released to the press on December 13.

Among the major findings is that Japan's online commerce sector is regarded as the most advanced and sophisticated of its Asian peers. Additionally, China's e-commerce sector is predicted to experience the fastest growth while Hong Kong is expected to have the slowest growth.

In Japan, e-commerce lags behind the West, but the Japanese are still in front of most of their Asian peers. E-commerce revenue sales there have increased steadily by about 17 percent every year since 2005 and are expected to grow by 10 percent annually through 2015. Online retailing giant Ratuken dominates the sector, with two thirds of Japan's 90 million Internet users purchasing merchandise through the site.

In China, online shopping is skyrocketing. About one-third of China's 420 million Internet users now shop online. In the first half of 2010, Internet sales in China increased by 60 percent compared to the same period last year. According to the China Internet Network Information Center, in July 2010, 33.8 percent of Chinese made purchases via the Internet, up from 28.1 percent in January. China's largest online marketplace, Taobao, handled 97 percent more transactions in the first half of 2010 than a year earlier. However, the online sector is still largely underdeveloped in China, particularly when it comes to transaction security and credit-card use.

In Hong Kong, online shopping is well-established. But since Hong Kong shoppers generally prefer a hands-on shopping experience, e-commerce is expected to grow more slowly here than other parts of Asia. In Taiwan, online sales now account for about 10 percent of the retail market, thanks to an easing of regulations.

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