Wednesday, May 28, 2003

Online sales hoped to outlive SARS

by Alan Low (
Posted Wed, 28 May 2003

For the past two months, Hong Kong web portals have seen soaring usage and booming sales of everything from DVDs to bleach as fears over SARS made sure the only place residents visited was cyberspace.

But with signs that the worst of the Severe Acute Respiratory Syndrome (SARS) outbreak is over and as more residents venture into crowded streets and shopping malls, internet executives are hoping the killer virus has led to a permanent change of attitudes toward shopping on the web.

Peter Steyn, director of sales and marketing at Nielsen/Netratings, which tracks internet usage, said home online users rose 13 percent in April, the first month fully reflecting the impact of SARS, which struck in mid-March, compared to February.

"As worries over SARS gripped Hong Kong in April, consumers turned more to the internet to find shopping deals and check out their finances instead of walking in crowded places and standing in queues," said Steyn.

Grocery and banking websites recorded highest surge in hits

Grocery and banking websites were among those recording the highest surge in hits.

"Grocery store experienced huge growth with visitor numbers up 161 percent since the SARS outbreak," said Steyn. Numbers of cyber surfers visiting the Bank of China's site soared 58 percent over the same period.

In addition to shopping, the net also proved hugely popular for providing up-to-date SARS news for homebound Hong Kongers with usage of news sites leaping 40 percent.

Surfing for SARS bulletins also proved popular among the estimated 60 million internet users in China, where SARS first emerged in the southern province of Guangdong in November.

Baidu, a Chinese language search engine based in Beijing, the world's worst-hit SARS city with 160 deaths and 2465 cases, reported an overall nine percent rise in daily hits last month. also noted SARS was its most popular search item, generating some 30 000 entries a day.

It was estimated that at peak times, more than one million people in Beijing were trying to get online at the same time jamming connections so that even making a phone call proved difficult.

Is it sustainable?

However, with signs the outbreak is slowing in both Hong Kong and mainland China, industry executives have expressed doubts whether the surge in web use, and hence online sales, is sustainable.

The deadly SARS respiratory virus, for which no cure or vaccine exists, has killed 262 people in Hong Kong from more than 1700 infections, though there have been markedly fewer new SARS cases in recent weeks.

Steyn said it would be interesting to see how many new net users continued to use online services - particularly shopping portals. "It could end up being a silver lining on the SARS cloud.

"I doubt if usage will fall back to the pre-SARS January level ... but whether it will be as high as SARS-levels, I don't think so."

Yahoo! Hong Kong, the territory's number one website in terms of users and traffic, which in April reported a more than 100-percent surge in online sales revenue, expressed concern the rise was not sustainable.

"We are not sure what will happen once SARS is over, but we hope people who had fears about online security will now be encouraged to keep using online shopping services now they have tried them and found them to be safe," said Arthur Chow, Marketing Manager at Yahoo!.

Spokesperson for Park n Shop, Theresa Pang, said online sales had now "settled at around 20 percent higher since the onset of SARS, or 60 percent higher than for the same time last year".

"We hope it doesn't fall back to pre-SARS levels and hopefully we can sustain the 20 percent growth going forward."

Online sales for travel websites, which fell last month as residents shunned travel because of fears of contracting SARS from infected passengers, was expected to rebound after the World Health Organisation lifted an April 2 warning against travel to Hong Kong and neighbouring Guangdong last Friday.

The China Travel website, which saw a 24-percent fall in hits in April, has already recorded a pickup this month along with other travel websites as people rush to take advantage of cut-price travel deals.


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