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Online travel is big in Asia-Pacific

Feb. 7, 2008

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On average, Japan and South Korea are better known for having high Internet and cell phone penetration, so it's no surprise that the two countries lead the Asia-Pacific region in B2C (business-to-consumer) eCommerce sales. Generally speaking, online sales are growing across the Asian-Pacific region.

According to eMarketer, online travel travel bookings for the five major countries in the region totaled over $73 billion last year, and those numbers are up about 24 percent for the corresponding period in 2006.

What's really new is that overall market share is moving toward Australia, India and especially in China.

On average, China’s market share of regional B2C e-commerce will grow more than threefold from about 4 percent in 2006 to well over 14 percent in about three years from now.

So shifting market share is a reflection of differences in eCommerce growth rates. eMarketer also forecasts that online sales will more than double by reaching almost $169 billion in three years.

China’s business-to-consumer eCommerce market is accelerating, with eMarketer expecting sales to increase at over a 58 percent average annual rate from 2006 to 2011.

India is also a high flyer with sales forecast to grow at almost 49 percent per year. At the low end, South Korea’s B2C e-commerce sales will grow by a little over 13 percent over the same period.

Between 2006 and 2011, the aggregate combined annual growth rate for the five countries will be over 23 percent.

By far, online travel bookings is the largest e-commerce sales category in most major countries. For the same group of five countries, plus New Zealand, online leisure and unmanaged business travel sales totaled almost 18 billion last year, and are forecast to rise to almost 42 billion by 2011.

In India and China, online-travel spending drives B2C e-commerce sales, and it accounts for a majority of total sales. Consumers are less wary of buying services like train or airline tickets online, and sellers can avoid the logistics and delivery problems associated with physical goods.

"Such preferences underscore how e-commerce in the region has a vast amount of growth ahead," said Jeffrey Grau, senior analyst at eMarketer.

From 2006 to 2011, eMarketer forecasts that overall online travel sales will grow at almost a 25 percent annual rate, higher than the 23.3% rate for B2C e-commerce.

To most industry observers, this indicates that online travel bookings is one of the key drivers of eCommerce sales in the APAC region.

Grau added that "eCommerce in these markets will have come of age when consumers start buying more expensive, higher-end categories such as apparel, home furnishings and jewelry."

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Source: eMarketer

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