Online shopping in Asia faces obstacles not shared in the US

Relatively few sites around the region highlight Lunar New Year gifts. In fact, some of the best Lunar New Year fun on the Internet might be free: The cards at sites like 123 greetings.com/events/chinese newyear). You also get the bonus of an early leg up onValentine’s Day cards.

Longer term, online shopping in Asia is likely to grow for the same reasons it has taken off in the US – it’s convenient and can save money. The region is at "the beginning of the same explosion" that has happened in the US, says Jonathon Gould, vice president for marketing at Master-Card International in Singapore.

But there’s a long way to go before online shopping in Asia reaches anything like US numbers. One reason: Asia doesn’t have the same big base of installed personal computers. There are only an average of 0.01 personal computers per person in Asia, vs. about 0.40 in the US, according to market researchers International Data Corp. And that’s just the beginning of the hurdles facing electronic marketers and Internet users in the region. Another big one: geography. The streets and alleys of crowded Asian cities like Hong Kong and Taipei, where spending power is high, are crammed with retailers. In the US, by contrast, shopping centers are farther away from where people live.The time and expense of getting to a mall provides an incentive to buy over the Internet that isn’t as compelling in many parts of Asia.

Here, you can find a lot of the things you want at your corner 7-Eleven," says Yahoo’s Li. A check at a downtown Taipei 7-Eleven finds just about anything you’d want for a Lunar New Year gift, like alcohol and toys.Besides convenience, Asia’s traditional retailers have another trump card: Because they face fierce competition from all the other retailers in their blocks, prices are often already pretty low. "You commonly get big discounts at a retail store itself," says Philip Wang, vice president at Acer Internet Services Inc, or AISI, a unit of Taiwan computer maker Acer Inc. AISI offers about 100,000 products from 100 merchants at its AcerMall (mall.acer.net)."That limits the range of products you can sell on the Internet, compared to the US" E-commerce vendors in Asia are likely to focus on products with relatively good profit margins, such as jewelry and luxury gifts,he says.

There are also differences in shipping and payment, since Internet sales in Asia commonly involve cross-border trade, executives say. That’s a contrast with the big, homogeneous US market, where most vendors and buyers are in one country, dealing with one currency and one financial system to handle payment disputes. Beyond all that, even consumers in relatively affluent places like Taiwan aren’t that comfortable with credit cards, especially using them on the Internet, says Albert Yeh, general manager of the local office of Sunnyvale, California-based Sina Inc, a Chinese-language Web directory service firm.

For Internet holiday shoppers around the region trying out E-commerce for the first time, many Asian-based executives urge caution:

*Stick with a merchant in your own country. The shipping is cheaper, or even free, and payment disputes are probably easier to sort out if they arise. "We don’t believe much in cross-border E-commerce," says Acer’s Wang. Once a dispute arises, it’s hard tosettle it in the legal process, he says. Acer knows: The company itself has been a victim of credit-card fraud.

* If you want to buy something from an online vendor that isn’t based in your own country, try to find out if it has distribution there. Yahoo says the merchants at its Visa Shopping Guide can deliver throughout Asia, but it also warns it can’t control their delivery services.

* Bigger may be safer. Some start-up Asians online sellers don’t use the latest encryption tools that keep your credit-card number secret, creating risks for buyers.