Taiwan E-commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Key Highlights

• As Taiwan's E-commerce market continues to grow, an increasing number of younger shoppers choose to shop at online retailers. The focus on timely deliveries of household items, including the likes of groceries, has significantly driven their sales on the e-commerce channels. Furthermore, these online platforms have redefined and set new standards of consumer expectations creating new growth prospects for the vendors of the market.
• With advancements in supply chain systems and a change in consumers behavior, online shoppers are gaining more confidence in purchasing food and beverage products online, though challenges persist for perishable products. Furthermore, More brick-and-mortar retail vendors are investing heavily to integrate their online and offline resources to provide consumers with a more user-friendly shopping environment in the region.
• Online shoppers in the region have several payment options for their e-commerce purchases, such as mobile payment, credit card, cash, and Electronic stored value cards. Furthermore, mobile payment is the most preferred option for E-commerce purchases, followed by card payments. Mobile payment is gaining popularity as the smartphone penetration rate in the region is very high.
• The most significant factor impacting the growth of the E-commerce market is the perceived lack of security and privacy issues associated with online shopping. Taiwanese firms are particularly wary of this issue, probably more for cultural reasons and the underdeveloped legal framework protecting electronic shopping. These factors can hamper the growth of the E-commerce market in the region.
• During the COVID-19 pandemic, more physical consumption was forced to be transferred online, and more Physical retailers and brand owners are actively deploying online shopping channels, attracting more consumers to continue to shift, causing long-term changes in consumers online shopping behavior and widely affecting their shopping frequency, items and amount in the region.

Key Market Trends

Growing Number of E-shoppers is Expected to Boost the E-commerce Market

• The online shoppers in the region are rapidly increasing in the area owing to strong smartphone and internet penetration. Furthermore, a well-developed telecom infrastructure and a well-developed logistics network further attract the region's online shoppers to buy and sell through online channels.
• Moreover, due to the increase in the number of online shoppers, the share of E-commerce in total revenue is increasing over the past few years. For instance, as per the Ministry of Economic Affairs Taiwan (MOEA Taiwan), the share of E-commerce revenue in total retail revenue in Taiwan has grown by leaps and bounds in 2021 from 2017.
• Social media has become extremely important for marketing products sold online in Taiwan. Facebook is the preferred method of digital marketing, with most of the online vendors choosing to use it as an effective marketing tool. This is due to the low cost of promoting through Facebook and the ability to reach a broad audience through the social media platform. E-merchants also highly depend upon word-of-mouth recommendations, which spread quickly on Facebook, to generate traffic.
• Furthermore, Double 11 (11 November) and Double 12 (12 December) are the famous online sales event in Taiwan. Major E-commerce companies in the region offer hefty discounts and offer on purchasing through online mediums during these events, resulting in the increasing number of online shoppers in the region. Furthermore, these sales events generate significant revenue for E-commerce companies.
• All of the aforementioned factors are further expected to boost the e-commerce market in Taiwan over the forecast period.

M-commerce Culture Supported by Innovative Digital Payment Solutions to Boost the E-commerce Market

• With the rising popularity of the smartphones and tablets, the number of people who use wireless internet, including mobile internet, is increasing rapidly in the region. Owing to this, the number of mobile commerce services and applications used by customers in Taiwan is rising rapidly.
• Moreover, the increasing number of mobile connections in the region is very high compared to many of the Asia Pacific countries, which is another region for solid demand for M-commerce in Taiwan. For instance, as per GSMA, the number of mobile connections in Taiwan stood at 28.65 million in Q4 2021 compared to 28.2 million mobile connections in Q4 2019. The mobile connection penetration rate is close to 120% in Taiwan.
• Furthermore, mobile shopping apps are increasing rapidly for many major E-commerce companies in the region, further providing a boost to mobile commerce in the region. For instance, as per Internation Trade Administration, among the monthly visitors of mobile shopping applications, Taiwan’s online shopping consumers mainly use Shopee (52.36 million pageviews/month), followed by PChome (32.44 million pageviews/month), Momo shop (31.17 million pageviews/month), and Ruten (30.17 million pageviews/month).
• Furthermore, the ease of convenience provided by digital payment solutions is gaining popularity in the region and further boosting the growth of the E-commerce market in Taiwan. Additionally, mobile payment is emerging as the preferred option for online shopping. Owing to this, many major players have already launched their mobile payment solutions, such as LINE Pay, Apple Pay, Google Pay, Jko Pay, PX Pay, and Taiwanese Government-backed Taiwan Pay.

Competitive Landscape

• July 2021 - South Korean E-commerce giant, Coupang launched its service in Taiwan. The South Korean E-commerce company began offering its services in Taipei City’s Zhongshan neighborhood, allowing consumers to order products through its app for on-demand delivery between 8 a.m. to 11 p.m., charging a delivery fee of 19 NTD. As the company expands into broad product categories, it will also compete with Taiwan's E-commerce platforms like Momo and PChome, offering 24-hour deliveries.
• February 2022 - Hour Loop, Inc., a leading E-commerce retailer, announced it had expanded its operations with the opening of three new offices in Taipei, Taichung, and Tainan. These new offices are part of Hour Loop’s expansion plans to broaden its operational capabilities across geographies.

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• The market estimate (ME) sheet in Excel format
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