ASIA’S WOMEN ARE POISED TO SPEARHEAD THE REGION’S MOVEMENT TO E-COMMERCE.
Byline: Kavita Daswani
Order fulfillment at Shanghai-based e-commerce company Chinanow.com is pretty simple: An order comes in, a messenger from the office peddles down the street on his bicycle, delivers the merchandise and collects the cash. That’s it.
“It’s a low tech approach,” admitted Eric Rosenblum, founder of the site, which specializes in airline tickets and hotel reservations. “For now, it’s the best we can do.”
The limiting factor in this case is low credit card penetration in China, making on-land cash payments the only real option for most online consumers in this populous nation. But that, like so many other current issues in online shopping in Asia, will change very soon as the region wakes up to the realities of e-commerce.
Most important of all, for apparel marketers, is the expectation that in Asian cyberspace, women will drive much of the excitement and growth.
The numbers of Internet users in Asia has leap-frogged in the past three years. According to the Goldman Sachs Investment Research department in Hong Kong, there were 8.4 million Internet users in 13 Asian countries – including Australia and India, but excluding Japan — in 1997. By the end of 1999, that figure had leapt to 25.8 million. And by the end of this year, the number is projected to reach 50.6 million. Within three years, it could be as high as 202 million, with the highest concentration in China and India.
Industry experts are convinced that this expansion of Internet use in Asia will largely depend on more women going online.
Yolanda Choy’s belief in that inevitability is so strong that she left a high-profile marketing post with the Asian headquarters of a leading French fashion house to become the general manager for a new women’s portal on Asiacontent.com, based in Hong Kong.
An avid Web surfer — she constantly checks out news sites and trawls for all kinds of information — Choy detected a gaping hole in the market for sites specifically built for women.
“The idea is to make the Internet a reality for other women,” she said. “At the moment, there is a lack of authoritative and good information (for women) in Asia, especially in the local languages. Most sites lack good content. I can’t find good answers to my questions.”
Choy added that while Asian site development is just starting to stir, and while English-speaking Asians can access U.S.-based sites, she estimates online consumers by and large are unable to buy online from about 99.5 percent of U.S. e-commerce sites.
That is something that Choy, in her capacity as GM of Asiacontent.com, plans to change. Over the next two years, she plans to provide Asian women with the useful, broad-based information she believes they are looking for, and then expand into e-commerce opportunities.
According to Rosenblum of Chinanow.com, women are a forgotten online segment in China — where, by the end of this year, some 12 million people will have Internet access.
Figures from the China National Information Center bear him out. Its research concludes that the majority of Internet users now are between the ages of 25 and 30, 79 percent of them are male and most have bachelor’s degrees and work in the computer industry. Even so, their monthly salaries are still at around $250, converted from the renminbi at current exchange.
“There is now a big push to get women online,” said Rosenblum. “But it is not feasible to blindly apply a U.S.-based model on China. In the U.S., a lot of women stay at home and have computers at home. In China, most women work, and those who don’t work can’t afford a computer. That’s the kind of factor U.S. companies need to look at when coming up with their e-commerce strategies for China.”
The China National Information Center figures also illustrate that the majority of users pay for Internet access themselves and restrict surfing to home.
Mostly, the Internet is used to gather information. Shopping, or any type of e-commerce barely appeared on a list of popular uses. But users did say that if they were to shop online; they’d be concerned with finding good prices and protecting their security.
Only 9 percent of Internet users last year bought something online, and half of those transactions were conducted on auction Web sites. Those statistics, however, do not mean Asian online users are not open to e-commerce in the future: They say they want to be able to buy books and magazines online, to have flowers delivered and to even purchase computer software and electrical equipment. Indeed, the Center concluded that the most promising segment of online activity in the near future is online consumption.
Elsewhere in Asia, women are expected to be a growing force in the fledgling e-commerce movement. Choy’s research at Asiacontent.com showed that in Taiwan, only 24 percent of Internet users in 1996 were women, but that percentage is almost twice as large today. In Hong Kong and Singapore, women already make up almost half of all users.
According to Asia Market Intelligence, Asian Internet users are quite open to the idea of e-commerce. But reservations remain the same across the board; they feel unsafe releasing credit card information and want to be able to see what they are buying before the transaction is completed.
Still, Web watchers say the Internet is an irresistible force that will sweep Asian consumers up soon enough, with the industry either helping them to navigate or following in their wake.
One such navigator is Eric Solberg, who runs Hong Kong-based Strategic Capital Group, a company that has invested in a range of information and e-commerce Web sites in Asia.
“E-commerce is all that my firm does, all we’ve done since 1998,” said Solberg. “As recently as 18 months ago, the issue of credit card settlement for purchases made online was new in Asia. Now, it can be done through every major bank.
“A year ago, delivery and fulfillment of orders was a challenge,” he continued. “Now, there are a dozen companies working to fill this need, to offer home delivery within 24 hours. In six months, it will be completely sorted out.”
Solberg has good reason to be optimistic. His company has just bought into upscale Asian retailer Joyce Boutique Ltd., in a bid to bring a strong e-commerce presence to the name. That means, again, focusing on Asian women predominantly, offering key items like Nars lipstick, Stila foundation and funky handbags to online shoppers across Asia.
“We’ve talked to hundreds of women in Asia, asking them if they would feel comfortable shopping online,” Solberg said. “They said that if it was a name like Joyce, which they recognize because it’s been around for 20 years, they would feel comfortable. And some of the Joyce products, such as the upmarket casualwear or the cosmetics, will work exceptionally well on the Internet on a regional basis, because they are light, affordable and delivery will be cost-effective. Those are all things we need to look at.”
Witness also the establishment of eGuo.com, the first Chinese Internet company to offer online shopping and delivery within an hour in Beijing. Customers can browse from the Web site for CDs, software, toys, and drugstore and convenience items. Additional delivery systems will be set up in other key Chinese cities, such as Shanghai and Guangzhou.
Industry experts say that the type of product offered online will be as important as anything else. Jim Lambert, who in December launched Menkou.com in Shanghai, said his focus would be on “movies, music and fashion.” At present, the Web site, which means “the doorway” in English, dispenses information ranging from how to dye your own hair to how to prevent acne.
Lambert said that e-commerce is “definitely an area we are exploring,” although he’ll need to inject more “pizzazz” to get there. “The reality of e-commerce in China is that it’s not impossible, it’s going on. Not that many Chinese own credit cards, but it’s not seen as the biggest hindrance. The biggest problem is, if I am in Beijing and I want to sell a shirt to someone in Shanghai, how can I reasonably get it there for less than what it would cost for that customer to go and have it made by a tailor on the outskirts of Shanghai? It’s going to happen — it’s just a question of when,” he said.
For now, Rosenblum of Chinanow.com likens his Web site to a “Time Out online” — it gives browsers a taste of the social and cultural life in Shanghai and Beijing, while it helps them with tickets and reservations.
“There is an emerging class of people that has money to spend, enjoy going out, and need some guidance on what’s cool and popular,” he said, adding that his Web site is run by hipsters such as a former guitarist and a young ex-magazine editor.
The Web site gets around 100,000 hits per day, but he said less than 1% of that traffic results in transactions.
“It’s going to take some time before not only enough people here in China have credit cards, but they feel comfortable using them as a mode of payment online.”
Until then, he said, he’ll keep the bicycle messenger/cashier busy.