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Taiwan's e-commerce sector emerges

TAIPEI, Taiwan -- As the development of third-party online payment matures, Taiwan's e-commerce supply chain, including online shopping malls and cloud infrastructure buildings, will form an emerging sector in 3-5 years.

Under the principles of supporting the development of e-commerce and protecting the interests of consumers, a special law governing third-party internet payment will be worked out in 2014 to provide for both the development of the industry and cash-flow management so as to help domestic e-commerce platform providers engage in cross-border operations.

On Friday, John Lin, eBay's vice president and CEO of Greater China, told United Evening News that the sophistication of third-party internet payment platform is critical in boosting Taiwan's e-commerce development. Taiwan's special law regarding third-party internet payments is expected to enter legislative review by the end of 2013.

Fuh Hwa Securities Investment Trust fund manager Wu Win-zheng (吳英鎮) indicated that current consumers rely on internet shopping more than ever, a boon for the high-tech segment's future gains in the domestic sharemarket.

SinoPac Securities Pilot Fund manager Chiu He-lun (邱鶴倫) argued that although most e-commerce service companies are in start-up period, he expects the domestic e-commerce supply chain will mature in 3-5 years, while revealing that the Pilot Fund will increase its holding of e-commerce concept stocks in mid-term.

Only 20% Domestic Online Shops Break Even

Despite a promising future, only 34.9 percent of Taiwan's business-to-customer on-line shops recorded a profit in 2012, a ratio similar to that of 2010, according to the Market Intelligence & Consulting Institute (MIC) under the Institute for Information Industry.

In a survey, the MIC also found that only 19.4 percent of such shops managed to break even in 2012.

Most online stores are small start-ups, 80.8 percent of which have no more than three employees, the MIC, said, adding that 43 percent of the stores were established within the last two years.

Many people are setting up their own websites to seek customers and are using apps to solicit orders or sell their goods on platforms provided by big websites such as PChome and Yahoo!, the MIC said.

Nearly 84.4 percent of online shops choose to do business on the big platforms because it is easier and costs less, according to MIC's report.

Fodstuffs, especially specialty items from a specific place, are the most common product sold online, as many well-established food manufacturers now offer online shopping, it said. Daily necessities are the second most popular goods online, the survey found.

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