Taiwan's household spending rose 1.8% in 2017

E-commerce orders ballooned 46.1% due to higher smartphone use.

Taiwan’s expenditures per household thrived with a steady compound annual growth rate (CAGR) of 1.8% from 2015 to 2017 despite an economic slowdown in mainland China in 2015. Taiwan recovered with a real GDP growth that climbed 2.8% from its US$600b (NTD17.6t) nominal GDP in 2015 to US$800.5b (NTD17.9t) in 2017.

The stimulated growth in household expenditure factored in with very high internet penetration and smartphone usage pushed the US$36.4b (NTD1.1t) worth consumer to consumer (C2C) mobile e-commerce in 2017, a China Insights Consultancy (CIC) report revealed. It rallied by a growth of 59.6% from US$22.8b (NTD 727.4b) in 2015 and is predicted to reach US$85.39b (NTD2.2t) by 2022.

Also read: Taiwan's inflation rate fell 0.9% in January

The number of e-shoppers in Taiwan increased at a CAGR of 3.5% from 2015 to 2017 which reached 15 million people or around 87% of the number of internet users. Meanwhile, e-commerce orders ballooned 46.1% from 634.9 million in 2015 to 927.4 million in 2017, the report found.

Aside from the rise of e-shoppers, Taiwanese are also spending more as expenditures per shopper rose 19% to US$1,000 (NTD29,400) in 2017 from US$800 (NTD24,700) in 2015. Expenditure per shopper is expected to reach $2,000 by 2022 with CIC’s expected CAGR of 3.0% from 2017 to 2022.

“The key factors propelling this growth are the continuing growth of internet penetration in Taiwan, growth in the user base of e-shoppers and number of online orders, an increase in average spending for each e-shopper, and changes in consumer behaviour," CIC founding partner Charlie Jiang explained.

The report also found that mobile transactions growth is expected to beat traditional PC-based purchases soon as mobile-based e-commerce which constituted 48% of all online transactions in 2017 that totalled US$17.6b (NTD 536.6b). This is a 128% boom in the US$7.7b (NTD247.3b) e-commerce sector back in 2015 that contributed only 34% amongst online transactions then.

“Several mobile shopping applications and mobile platforms released from 2013 onwards have gained popularity among the young people in Taiwan with the shift from social media commerce to true C2C e-commerce platforms,” the report noted. It also mentioned Taiwan’s relatively high smartphone penetration rate and faster mobile internet speed made possible by new 4G technologies.

Taiwan’s internet penetration rate of 73.3% is higher compared to other Asian countries such as China with 56.1% and Thailand with 55.7% in 2017.

“These figures rank Taiwan as first-tier in terms of proportion of internet users but shows great potential for growth due to a mature electronics industry and the availability of affordable smartphones,” the report noted. Japan’s technological advancement has given them a 95.3% internet penetration rate in 2017.