October 29, 2010, 1:24 PM

Looking east: China’s online sales will triple in five years, study says

Online retail in the Asia-Pacific region grows faster than in the West, Forrester says.

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With more than 40% of the world’s online population, the Asia-Pacific region will outpace over the next five years the 10% compound annual growth rate in e-commerce sales projected for the U.S. and Western Europe, Forrester Research Inc. says in a report released this week.

The fastest growth by far will occur in China, where online retail sales are expected to more than triple to $159.4 billion in 2015 from $48.8 billion this year, according to the report, “Asia Pacific Online Retail Forecast, 1010 to 1015,” written by Forrester senior analyst Zia Daniell Wigder.

Forrester’s figures on China’s retail online sales include consumer-to-consumer and business-to-consumer transactions. With $48.8 billion in online sales this year, China is overtaking Japan as the largest Asia-Pacific e-commerce market, Forrester notes.

Most e-commerce sales in China, however, are concentrated in its major cities, where the online clothing category attracts more than half of both male and female online shoppers, the report says. Although China’s online retail market is dominated by China-based Taobao.com, others including Amazon.com Inc. are also growing there, the report adds.

Another notable growth market in the Asia-Pacific region is Australia, where business-to-consumer online sales are expected to grow to $29.9 billion 2015 from $17.3 billion this year. Although the country has a relatively small number of online consumers—about 17 million—they have a per-capita online spending higher than metropolitan China’s.

Australia’s online consumers tend to do much of their Internet spending on consumer electronics, computers and appliances. Popular online retailers include eBay, DealsDirect.com.au and one-product-per-day site CatchoftheDay.com.au.

The report notes that Japan, with 100 million online shoppers, is a relatively mature online market, with e-commerce sales expected to rise to $72.1 billion in 2015 from $45.0 billion this year. The country’s online consumers buy across multiple categories. Consumer electronics is the largest online category, followed by clothing, beauty and grocery products.

Although Japan-based Rakuten dominates the Japanese online market, Amazon.com and the Yahoo Shopping e-marketplace also have a strong presence there, the report says.

The report also notes that South Korea and India represent undertapped market opportunities. In South Korea, where online shoppers show a strong interest in buying clothing on the Internet, online retail sales are expected to rise to $20.7 billion in 2015 from $11 billion this year.

In India, total online retail sales (including consumer-to-consumer as well as business-to-consumer) are expected to reach only $680 million this y ear, but grow to $6.5 billion in 2015. Helping to drive that growth in India will be greater penetration of broadband Internet access and improvements in the supply of goods, the report says.


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