Make it cheap
From the "rational actor" point of view, the main attraction of online shopping is the lower cost. Virtual selling can offer lower prices but remain profitable because it does not require intermediate wholesalers and retailers, but can directly link consumers with suppliers.
Vincent Hsieh of PC Home Online, which focuses on "business-to-consumer" sales, points out that brick-and-mortar sellers need storage space, shelves, forklifts, parking lots, and so on, so costs are high. Virtual stores not only can dispense with the physical plant, but can get products to the attention of consumers faster-as soon as a new product comes out it can go online.
Hsieh says that since cyberspace is limitless, you can use as many images and as much text as you need to introduce your product. For example, nanocosmetics dealers can explain what "nano" means in this context, how these products physically penetrate the skin, and how they work therapeutically. Such detailed explanations can boost the value and attractiveness of a product.
Another example is PC Home Online's digital camera page, where you can surf past virtually any and all related products. The site itself heavily promotes the most competitive products, and it now accounts for about one in every ten digital cameras sold in Taiwan.
Credibility is the best guarantee
Yet, however fast and convenient Web trading can be, it is liable to the same sorts of problems that have hampered hawking on radio programs. Two problems most vex users: One is never receiving delivery of what one has already ordered and paid for. The second is credit card security.
In a case of the first type, in May, a number of university women brought a complaint to the prosecutor's office about a possible scam online-they had paid for name-brand cosmetics selling at half price, and had already sent in their cash, but had yet to receive any goods.
In response to these concerns, last year Yahoo came out with a system to verify people's identities and their correct email addresses and mobile phone contact numbers. It has also come up with a mutual evaluation system for buyers and sellers in order to build mutual trust. A seller gets one point for each successfully delivered sale; several sellers have already been honored with membership in the "Thousand Sale Club."
Yahoo also came out with a credit card verification system in July. New members who want to engage in an online trade must first pass a credit card verification process. When the credit information of a user is verified, the system will immediately display a picture of a credit card next to the individual account number.
eBay Taiwan has a "fraud protection program" in place. If a user does not receive his or her product after paying, he or she can file an appeal. After an investigative team verifies the complaint, the individual can receive compensation of up to NT$7000. But there are conditions-the individual must file in the period from 30 to 60 days after the conclusion of the auction, and the amount paid must be in excess of NT$875.
PC Home's Hsieh says that when users fill in their credit card number on an order form, the number is sent over a secure connection, so it is very safe. Given a choice between online credit card use, transferring funds electronically from their bank accounts, or paying at cooperating convenience stores, 75% of PC Home Online's users prefer the first option. A large number of people who do online trading believe that the risks associated with credit card use are so small that it beats the inconvenience of alternative forms of payment.
Hitting the turnaround
According to the Institute for Information Industry, Taiwan's e-commerce market has doubled since 1998, with total value for 2003 expected to reach NT$200 billion (about US$6 billion), which suggests that consumers feel increasing confidence in online shopping. Last year, one out of every five people who went online bought something over the Internet.
Three years ago, a lot of dot.com companies vaporized when the e-commerce bubble burst. But having survived the shakeout, companies like Amazon, Yahoo, and eBay are now thriving, and are showing considerable ambition to cultivate the online market in Taiwan. E-commerce was once the focus of excessive expectations, but with the bursting of that bubble the irrationality of the past is just that-a thing of the past. What's left are those services that genuinely meet consumers' needs. It is of course impossible to judge whether online trading will rewrite shopping history in Taiwan, but we can say with confidence that online trading is this time setting down firmer roots by more accurately reflecting how "real" society functions as a whole.