One-Tenth of the World's Population Shopping Online: Including 325 Million in Last Month

Korea, Taiwan and Japan Made the World's Top 10 for Online Shopping Penetration Majority of Hong Kong Online Shoppers Used Credit Card for Online Purchases- The 3rd Highest in the World

25 October 2005
Hong Kong

More than 627 million people have shopped online, including over 325 million in just the last month, according to a study released today by ACNielsen, the world'sleading marketing research and information company.

The twice-yearly global ACNielsen Online Consumer Opinion Survey, the largest of its kind, polled over 21,100 respondents in 38 markets from Europe, Asia Pacific, North America, and Latin America (See Table 1 for market breakdown). The study asked Internet users around the world about their online shopping experiences including when they last made an online purchase, what items were last purchased (see Table 2 for a list of items covered), the method(s) of payment used, what payment card was used the most for online purchases and the most preferred payment method when shopping online.

Accordingly over 212 million online shoppers mention Books as among the last 3 items they purchased online. In addition:

• about 135 million people have purchased DVDs and/or video games or made plane reservations online;
• over 128 million purchased articles of clothing/accessories/shoes;
• over 100 million paid for music downloads and/or CDs or purchased electronic devices (including cameras, etc);
• close to 98 million bought computer hardware; and
• over 86 million consumers made hotel and/or tour bookings.

Europe and North America display the highest incidence of online shoppers, with at least 95 percent of Internet users in Germany, Austria and the UK having purchased online.

In Asia Pacific, South Korea and Taiwan rank highest, with at least 90 percent of respondents claiming to have ever made a purchase online, at least six in 10 of whom have done so within the last month. Compared to the rest of the world, Hong Kong and mainland Chinese people seemed to be less into online shopping with less than two-thirds claimed to have purchased online. Others on the bottom of the list were Malaysians (58%), Thais (48%), Philippines (44%) and Indonesians (42%).

In Asia Pacific, where the average number of purchases was five, online shoppers in markets like Singapore, Taiwan, Australia and China, made an average of five to six purchases in the past month. In Hong Kong, despite the mild interest of its people in shopping online, the average number of purchases made in the past month was about the same as Japan, Korea and New Zealand where their proportion of online shoppers were higher. (Chart 1)

As a region, online shoppers in Europe made an average of five purchases in the last month. In fact most of the markets in Europe display higher average purchases than North America, which showed an average of four purchases last month.

"Our recent e-commerce studies clearly show an upward trend in global online shopping,"said Ms Fanny Chan, Managing Director of ACNielsen Hong Kong. "While there is growth in nearly all global markets, we see that the lesser developed markets are growing faster than many of their more developed counterparts. It will not be long before we have a nearly level playing field across the globe."

Seek and You Shall Buy... Entertainment and Travel

Across the globe, the most popular items purchased on the Internet are Books (34%), followed by Videos/DVDs/Games (22%), Airline Tickets/Reservations (21%) and Clothing/Accessories/Shoes (20%).

What people buy varies widely by market. "International book sellers would want to make sure their websites accommodate Korean and Chinese languages as Books top the list of items purchased by the Chinese (56%) and South Koreans (50%). This represents tens of millions of consumers in those markets and this is growing rapidly," said Ms Chan.

Meanwhile, airlines and online travel agents would be wise to target markets like Malaysia (55%), New Zealand (40%), Singapore (36%) and Australia (35%) for which Airline Tickets/Reservations are a common online purchase. In Japan, Groceries (26%) are the second most popular item purchased online after Books (30%). With an average of four purchases in the past month and over 69 million estimated online shoppers, Japan presents a big opportunity for online book sellers and grocery sites. (Chart 2)

Over half of South Korea's 29.4 million online shoppers have purchased Clothing/Accessories/Shoes online. South Koreans are also the most likely to buy Cosmetics/Nutrition Supplies online (34%), three times higher than the global average of 10%.

In Hong Kong, besides purchasing books (35%), online shoppers were particularly used to getting event tickets (23%) online, followed by making tours/hotels reservations (19%) and airline/tickets reservations (16%).

In UK, Videos/DVDs/Games generate the biggest online market (34%), followed by Books (30%). Videos/DVDs/Games are also among the most online purchased item in France (30%).

"One in ten of the world's population shopping online is not enough to ensure successful online sales," warns Ms Chan. "It is still very important for both small and large retailers to understand the triggers that drive Brand Equity and site usage in their category. Our studies consistently show that websites and brands with higher Brand Equity attract higher traffic and sales."

Credit Cards the most popular payment method online

For most of these online purchases, credit card (59%) or bank transfer (23%) was used to make the payment. Cash-on-delivery is also a popular payment method used in some Asia Pacific markets, ranking 2nd to credit card in India (29%) and Japan (25%). China is most unique with COD (34%) as the most used payment method, followed by Bank Transfer (31%). Credit card ranks only third (26%) in this market and is followed closely by Money Transfer (23%).

In Hong Kong, majority of online shoppers indicated that they use credit card to settle payment for their online purchases, the second highest in Asia Pacific and the third highest in the world. 15 percent claimed to pay cash on delivery and 12 percent use PayPal.

Our recent regional and country-specific consumer studies show that a major concern in lesser developed markets is the safety of online--and offline--payment methods, while in more developed markets, online shoppers are demanding more sophisticated payment methods; and increasingly less and less online merchants would offer COD as a payment option given the administration requirement and cost."says Ms Chan.

"This represents both a challenge and an opportunity for payment card companies and their competitors to understand exact usage drivers as they evolve differently in each market."

In Japan and Taiwan, payment through a convenience store is an important online purchase payment method. Where credit cards rank first in both usage and preference, the fact that this method ranks second (Taiwan) or third (Japan) in terms of usage and ranks second in both markets in terms of preference, displays the important role that convenience store plays in online shopping in these markets.

In North America, while credit card (69%) is still the more commonly used payment method, PayPal (29%) ranks second while debit card, primarily driven by the US market, ranks third (22%). Although credit card was also largely used in Latin America, PayPal generates high usage in Brazil, next to credit card.

In Europe, however, cash-on-delivery (COD) is the 2nd most used payment method, following credit card, in markets like Portugal (35%), Greece (31%), Spain (29%) and Italy (28%), while almost half of online shoppers in UK used debit cards.

About ACNielsen

ACNielsen, a VNU company, is the world's leading marketing information company. Offering services in more than 100 countries, the company provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns. For further information visit http://www.acnielsen.com

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Table 1: The 38 Markets Covered in the 2005 Global Consumer Confidence Study were:

Table 2: 17 Categories of Items Covered

Chart 1

Chart 2