Tuesday, November 26, 2002

E-tailers are primed for happier holidays

From the U.S. bellwether Amazon.com to the German catalog retailer Neckermann.de to HK.Yahoo.com in Hong Kong, online shops around the world are hoping for a holiday season of double-digit sales growth — a small beacon of light amid stock downturns, flagging tech spending and stagnant corporate sales.

Leading the charge is Europe, where some forecasts even call for triple-digit increases over last year.

"We have seen a growth rate this year in excess of 100 percent," said Jon Prideaux, executive vice president of Virtual Visa Europe. "A given retailer might not see precisely that, but we've seen monthly sales increases of 18.5 percent, so a double or more increase over last year is very likely."

European e-tailers are gaining over the pioneering Americans because more consumers who are relatively new to the Internet are in Europe, said Japp Favier, research director at Forrester Research Inc.'s European operations. The United States has fewer newcomers, so growth is somewhat flatter this year.

The German e-tailer KarstadtQuelle, the online arm of the Karstadt department store and Quelle appliances, says 30 percent of its online sales this year — which should come in at €1.2 billion ($1.2 billion), a 70 percent increase — are coming from first-time customers.

"The average time between first plugging in the computer and buying something is 18 months, and the first purchase is usually a CD or book," Favier said.

Overall, Forrester expects that European online retail sales this holiday season will rise to €7.6 billion from about €4 billion, bringing the total for the year to €30 billion, up from €15.5 billion.

In Asia, the situation is more fragmented. Cultural nuances and logistical barriers do not always turn new Internet recruits into online shoppers.

For example, in Hong Kong and Singapore, Internet and broadband penetration levels are among the world's highest, but online sales lag significantly behind Europe's and North America's. In China, consumers want to actually touch the merchandise to make sure it works before they buy, analysts say. But e-commerce is still gaining in markets like South Korea, Japan and Taiwan. While there is little religious significance to Christmas in much of Asia, the idea of a "holiday season" may be catching on.

"The fourth quarter is increasingly becoming a shopping season in Asia-Pacific," Lane Leskela, a research director for Gartner Inc., said in a recent report. "Christmas has penetrated the local culture of many non-Christian societies as a gift-giving celebration."

Hong Kong's top shopping destinations are the Yahoo shopping and auction sites. Quinnie Ng at Yahoo Hong Kong said the sites had seen a 160 percent rise in total customers this year. But in actual numbers, she said, the base is small.

Peter Steyn, Nielsen/NetRatings director in Hong Kong, said: "People in Hong Kong and Singapore go online to browse, compare prices and functions. Then they hop across the street and buy in a shop."

In Europe, retailers have matured somewhat on the Internet over the past several years, and consumers have gotten used to them.

"People are finding it more convenient to buy online," said Brian Morris, who heads e-business for MasterCard Europe. "And with the move to the euro, it's become easier to do comparison shopping with Web sites in different countries."

Even in markets where credit cards are often spurned as a payment method — such as Germany, Italy, Japan and China — e-tailers are getting creative and consumers are responding. Amazon will send bills by mail in Germany and accept cash on delivery in Japan. Many Japanese customers buy online and have the goods sent to a 7-Eleven outlet, where they pay with cash.

"Some people actually bring cash to the office," said Fritz Demopoulos, founder and former chief executive of Shawei.com and now senior consultant to NetEase.com in Beijing.

"We have seven different ways you can make payment, like bank wire transfers, debit cards, prepaid cards."

Internet buying is still a small fraction of overall retail sales. And online sales are seldom net gains — they are sales that have moved from the store cash register to the personal computer. But purchases made online generally cost the retailer less to process than face-to-face sales. Even in struggling retail sectors, such as consumer PCs, this shift has been notable.

"Overall, sales have stagnated," said Massimiliano Bancora, Web and marketing director for CHL, one of Italy's largest computer retailers, "but sales initiated online have increased by 20 percent this year."

Regis Brinster, Geneva-based interactive marketing manager for Iomega International, a computer-storage maker, said: "We launched online sales two years ago, and they have grown to about 1 percent of our total European sales. To achieve this level of sales so quickly on a supplementary channel, without investing in a call center, makes this really outstanding."

To more effectively balance loads and keep peak drain on their systems to a minimum, European retailers have encouraged early shopping. Amazon's sites, Iomega International, British retailers like Argos, and many others offer incentives such as free shipping for orders placed before early December.

"If you're going to compete with the high street experience, you need higher levels of customer service," said Ian Loughran, managing director of Blackstar.co.uk, a Belfast-based video retailer.

Blackstar meets with Royal Mail representatives to plan for peak delivery periods such as holidays or during the release of hot movies.

That everything works is especially important to first-time buyers. If things do not go as planned, the next sale will be much slower in coming.

On the other hand, too much customer service can be a hindrance, and Internet stores can answer that need, too.

"I don't need sales help to buy a movie," said Lee Evans, a Berlin-based travel consultant.

"On Amazon, I type in the movie name and buy it. I don't have to fight the throngs. Then I can go downtown, stand in the Christmas markets, drink the mulled wine and look at the lights with my family.

Saturday, November 9, 2002

Internet shopping surges in popularity in Hong Kong


Saturday, November 09, 2002

HONG KONG: Internet shopping in Hong Kong has surged in popularity in the past year but most people appear to be only window-shopping, a survey published Friday found.

The most popular shopping sites, such as Yahoo and Amazon, have seen a 47% rise in visits by Hong Kong people, according to Internet market research company Nielsen/NetRatings.

A total of 823,000 Hong Kong people visited the top 100 shopping sites this year compared with 562,000 this year, researchers found.

The number of people using the Internet in the territory has risen from 1.7 million to 2.1 million over the same period.

Nielsen/NetRatings director Peter Steyn told Friday's South China Morning Post that despite the rise in visits to shopping sites, Hong Kong people were using the Internet to compare products and prices.

Hong Kong consumers are wary about spending money online, thinking the technology unsafe, and prefer to browse the Internet for price comparisons before buying in shops. - dpa

Friday, November 8, 2002

Number of shoppers using the Internet surges by 47 per cent

Friday November 8 2002

Susan Schwartz

Hong Kong people appear to be turning away from shopping centres in favour of the Internet, with the number of armchair consumers logging on to the most popular sites up by 47 per cent over the past year, according to a survey released yesterday.

The Nielsen/NetRatings figures show audience levels for the top 100 shopping sites increased from 562,000 last year to 823,000 this year. This compares with a 24 per cent increase in overall Internet use from 1.7 million to 2.1 million during the same period.

The company's Hong Kong director, Peter Steyn, said consumers were turning to the Internet to compare products and prices.

'In September 2001, 33 per cent of Internet users visited a shopping site,' Mr Steyn said. 'This September, 39 per cent visited a shopping site - a clear indicator increasing numbers of Hong Kong surfers are enjoying the convenience of online shopping.'

The most popular destinations were the Yahoo! shopping and auction sites, which saw their audiences increase 132 per cent year on year. 'The Yahoo! shopping and auction sites continue to lead the field and are now well ahead of the second-ranked Amazon,' said Mr Steyn.

'For Yahoo! high growth came from hk.auctions.yahoo.com, now the most popular auction site among at-home Internet users.'

Among the top 20 shopping domains this September, those offering general merchandise remained the most popular, followed by sites offering auctions, computer products, travel and - to a lesser extent - music, cinema bookings, beauty products, books and groceries.

'The type of products people are looking for online has not changed much over the last year,' Mr Steyn said.

'Sites with a variety of products, and auctions in particular, are becoming increasingly popular.' Fifty-nine per cent of online shoppers are men and 54 per cent of customers are in the 18 to 34 age group. According to last month's figures, 18 per cent of Internet users aged above 16 had made a purchase online.

Meanwhile, the use of online government services has increased almost 20 per cent over the past year, according to a Taylor Nelson Sofres study released yesterday. The number of people who consider such sites unsafe to use decreased by three per cent from last year to 52 per cent.

The most frequent users are people seeking information (33 per cent), high-income groups (65 per cent), people with a university education (78 per cent) and those aged under 25 (63 per cent).