Japan Leads Asia-Pacific For E-Commerce

Retail e-commerce is dependent on the level of internet and broadband penetration within the region. The Asia-Pacific region’s overall ranking is boosted by high internet connectivity rates in Hong Kong, Australia and Singapore and by innovativeness in products and services in South Korea and Japan. However, the region is pulled down by poor performances from China and India.

In contrast, the US has the world’s largest internet subscriber base, with 179.1 million in 2004, but several of Asia-Pacific countries, such as China, Japan, South Korea and India have a sizeable online population, with China and India at the early stages of growth. The UK is shown to have 32.3 million internet users, with a penetration base of 53.4%.

Commenting on predictions for the US and Asia-Pacifc, Jeffrey Grau, eMarketer senior analyst, said: “During the 2004-2008 period, eMarketer estimates that the US internet population will grow at a slight 2.6% annual rate, because more than six out of ten Americans are already online. By now, those that are offline are unlikely to get connected.”

Talking about China’s internet population, Grau added: “According to our estimates, this will grow during the 2004-2008 period by over 14.3% on an annual basis. Droves of Chinese citizens are being introduced to the internet daily.”

According to estimates released last month by eMarketer, China is predicted to overtake the US in terms of total broadband households, even though its current penetration rate is just 6.5%, compared to 29.9% for the US (see US Broadband Penetration Drops Out Of Top Ten).

The leader in broadband penetration continues to be South Korea, with its 73% penetration rate resulting from a very competitive broadband market and vigorous government support in the late 1990s. Hong Kong follows, with a penetration rate of almost 60%, while Taiwan has a rate just over 50%

Broadband penetration rates are shown to directly affect e-commerce, as broadband users are shown to be far more likely to shop online than dial up subscribers. Online gaming, especially in South Korea, but also in Japan and China, has been a force behind consumer broadband adoption.

eMarketer estimates that in 2004, 73% of all households in South Korea had a broadband internet connection, with Hong Kong, Taiwan, Japan and Singapore all ranked ahead of the US as an important driver of online shopping.

Grau explained the uptake of this technology saying: “A new middle class is emerging, eager to consumer the myriad products and services that are available online, and not just those offered by Chinese e-tailors.”

He added: “iResearch, a Chinese market research firm, estimates that China’s e-commerce market will be worth $6.5 billion by 2007, nearly a six-fold increase over 2004.”