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Asia-Pacific E-Commerce Rises

Posted by Mort Greenberg on February 13, 2008

Asia-Pacific E-Commerce Rises

FEBRUARY 6, 2008

Online travel is big in China and India.

Japan and South Korea are known for having high Internet and mobile phone penetration, so it’s not surprising that the countries lead the Asia-Pacific region in business-to-consumer e-commerce sales. In fact, such sales are growing across the region.B2C e-commerce sales, including travel, for the five major countries that eMarketer covers in the Asia-Pacific region totaled an estimated $73.3 billion in 2007. That is up 24% over 2006.

eMarketer forecasts that online sales will more than double by reaching $168.7 billion in 2011.

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B2C E-Commerce Sales* in Select Countries in the Asia-Pacific Region, 2006-2011 (bilions)

What is new is that market share is moving toward Australia, India and especially China. China’s share of regional B2C e-commerce will grow more than threefold from 4.1% in 2006 to 14.3% by 2011.

Shifting market share is a reflection of differences in e-commerce growth rates.

China’s B2C e-commerce market is on the fast track, with eMarketer expecting sales to grow at a 58.5% average annual rate from 2006 to 2011. India is also a high flyer with sales forecast to grow at a 48.8% annual rate. At the low end, South Korea’s B2C e-commerce sales will grow by 13.3% over the same period. Between 2006 and 2011, the aggregate CAGR for the five countries will be 23.3%.

Distribution of B2C E-Commerce Sales* in Select Countries in the Asia-Pacific Region, 2006 & 2011 (% of total)

Online travel is the largest e-commerce sales category in most major countries. For the same group of five countries, plus New Zealand, online leisure and unmanaged business travel sales totaled about $17.7 billion in 2007 and are forecast to rise to $41.7 billion by 2011.

eMarketer forecasts that from 2006 to 2011 online travel sales will grow at a 24.8% annual rate, higher than the 23.3% rate for B2C e-commerce. This indicates that travel is one of the key drivers of e-commerce sales in the APAC region.

Asia-Pacific* Online Leisure/Unmanaged Business Travel Bookings, 2006-2011 (billions and % increase vs. prior year)

In China and India, online-travel spending drives B2C e-commerce sales, and it accounts for a majority of total sales. Consumers are less wary of buying services like train or airline tickets online, and sellers can avoid the logistics and delivery problems associated with physical goods.

Jeffrey Grau, senior analyst at eMarketer, said that such preferences underscore how e-commerce in the region has a vast amount of growth ahead.

“E-commerce in these markets will have come of age when consumers start buying more expensive, high-touch categories such as apparel, home furnishings and jewelry,” Mr. Grau said.

Learn what it takes for Web merchants to succeed across the Pacific. Read eMarketer’s Asia-Pacific B2C E-Commerce: Focus on China and India report.  

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