Asia's shoppers go online as Internet barriers fall

By Dhara Ranasinghe and Lee Chyen Yee

SINGAPORE/TAIWAN (Reuters) - From dresses, to handbags, diamonds and music downloads, consumers in Asia are taking to Internet shopping like never before as the region becomes one of the world's fastest growing e-commerce markets.

"I like to shop for clothes online because no sales girls will pester me," said Cecelia Wang, a 23-year-old university student in Taipei, who spends about T$1,500 ($44) each month on Internet purchases.

"For online shopping, all I need to do is sit in my room and shop, which is great."

Internet retailing is increasingly making its presence felt in Asia because telecommunications infrastructure has improved, and payment modes, a major obstacle to online shopping, are now more secure, analysts say.

Internet penetration rates, the percent of the population that has Internet access, is about 17 percent in Asia versus 73 percent in North America and almost 50 percent in Europe, according to www.internetworldstats.com.

As more people in Asian countries such as China and India get hooked up to the Internet, online sales are expected to rise by an average of 20 percent a year. In some markets, such as Japan, they are expected to increase by as much as 40 percent annually.

"There is a huge opportunity for retailers in Asia-Pacific to benefit from the cost-savings of operating online," said Sandra Hanchard, a senior analyst at online intelligence service Hitwise, a subsidiary of Experian Group.

"Surfing the Internet is now a mainstream lifestyle activity. More and more traditional retailers are realizing that this is an opportunity to connect directly with consumers."

Although the global economic downturn has affected both traditional and online retailers, analysts say the gloomy economic outlook is actually encouraging consumers to hunt for second-hand goods online or make greater use of auction and rental websites such as www.thatbagiwant.com.

Asia's tech-savvy online shoppers buy everything from furniture and flowers to airline tickets and iPods. Online games such as mahjong are gaining popularity in Taiwan. In Hong Kong and Australia, shoppers are drawn to overseas retail websites.

Amazon.com and eBay are among the most popular sites in Asia. In China, e-commerce firm Alibaba.com operates an online site connecting importers and exporters of Chinese goods.

ONLINE GEMS

On eBay India, which has more than 2 million registered users, top purchases in 2008 included gemstones, mobile handsets, MP3 players, women's apparel and Indian stamps and coins, said Deepa Thomas, eBay India's senior manager of pop culture.

The company's sales show that despite relatively low Internet penetration, Indians have readily embraced online shopping.

"Earlier, people only bought easily affordable items, but now they're also buying more high-value items and unusual items as they have more confidence shopping online," said Thomas.