Magazine article Business Asia

The Realities of Retailing

Magazine article Business Asia

The Realities of Retailing

Article excerpt

The Boston Consulting Group expects the Asia-Pacific's regional on-line market to grow at least 150 per cent to top US$7 billion in 2000 (see story page 1). Following are some conclusions drawn from its intensive research into on-line retailing.

Myth: Asian countries are several years behind the United States.

Reality: E-commerce readiness varies widely by country. More developed countries like Japan, Hong Kong, Singapore and Australia are approaching US levels in key areas such as PC penetration and Internet penetration. Several countries actually lead the US in wireless phone penetration, an important fact since wireless Internet browsing by phone may be the access method of choice in the next decade.

Myth: Asian e-commerce websites and business models are unsophisticated.

Reality: The best Asian websites are just as functional and sophisticated as their US counterparts, and some business models in Asia are very sophisticated and innovative. The problem in many cases is that the underlying supply and distribution infrastructure needs to improve to meet the needs of these sophisticated new businesses.

Myth: American on-line retailers and investment will drive the growth of the market in Asia.

Reality: Foreign sales accounted for only 14 per cent of the total Asian market size in 1999. While American investment and the US example have certainly helped Asia's growth, local investment has been quite strong. Japanese Internet investment firm Softbank in particular, has invested heavily in Asian Internet ventures. …

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