E-commerce sales have been on a consistent growth trajectory for the last few years in Taiwan. The ongoing COVID-19 pandemic and the subsequent social distancing measures undertaken by the government have further accelerated the e-commerce growth in the country, according to GlobalData, a leading data and analytics company.
An analysis of GlobalData’s E-Commerce Analytics reveals that the country’s e-commerce market is expected to grow at a compound annual growth rate (CAGR) of 9.0% from TWD1.1 trillion (US$35.4bn) in 2020 to TWD1.5 trillion (US$49.9bn) in 2024.
Nikhil Reddy, Banking and Payments Analyst at GlobalData, comments: “COVID-19 has made online purchasing more appealing, as wary consumers prefer to stay at home to avoid social contact.”
The pandemic has benefited several e-commerce companies with online shopping sites PChome Online and Momo.com registering revenue increase of 12.5% and 26.7%, respectively, in July 2020, compared to same month last year.
The use of electronic payments including cards and alternative payment solutions will rise as consumers move away from cash due to fear of getting infected. According to *GlobalData’s 2020 Banking and Payments Survey, payment cards are the most preferred payment method for e-commerce purchases in Taiwan, accounting for 53.3% share in 2020. Alternative payment methods such as Line Pay and Apple Pay are gaining prominence among consumers and collectively account for 20.1% share.
Taiwan launched several initiatives to promote e-commerce adoption in the country. One such initiative is the launch of a subsidy program in April 2020 under which retailers are offered subsidies to cover costs including setup, marketing, logistics and order processing. The government allocated TWD100m (US$3.3m), with about 1,000 retailers are expected to benefit from the program receiving TWD100,000 (US$ 3,339.58) each.
Mr Reddy concludes: “Taiwan is home to a robust e-commerce market, with high Internet and smartphone penetration, and tech-savvy millennials. The pandemic has brought in a change in the consumer buying behavior with increasing number of consumers embracing online shopping, which is likely to continue even beyond this pandemic.”
*GlobalData’s 2020 Banking & Payments Survey was carried out during Q1 2020. Over 43,000 respondents aged 18+ were surveyed across 44 countries.