Taiwan - ECommerceTaiwan - ECommerce
By 2017, 85.1% of Taiwan’s population had Internet access. The majority of Taiwan Internet users log on using a mobile phone (73.3%), personal computer (68.8%), notebook (52.1%), or tablet PC (45%).
Current Market Trends
The Taiwan e-commerce market currently includes a wide range of products bought and sold online. These include, in no particular order:
- Apparel and Accessories
- Travel Packages, Hotels, and Flights
- Shoes, Bags and Collectibles
- Computers and Accessories
- Household Products
- Beauty and Skin Care
- Foods and Drinks
- Mother and Baby
- Media Products and Videogames
E-commerce legislation is also continuously being drafted and amended in Taiwan to better facilitate and regulate this growing industry. An Electronic Signatures Act was passed in 2001, which is modeled on UN standards and recognizes electronic signatures by certification authorities. The Consumer Protection Act, passed in 2005, allows consumers to return goods they find to be unsatisfactory within a seven-day window. Distance and online selling are included in this law. Most recently, the Act Governing Electronic Payment Institutions, detailed in the Online Payment section of this guide, was implemented in 2015. While other countries have been aggressively pursuing innovative new fintech services, Taiwan’s financial industry has been more conservative in its approach. Rather than emphasizing the benefits that fintech can bring, Taiwan regulators have shown more concern over ways to manage the risks. The Financial Supervisory Commission (FSC) has indicated it would prioritize implementing a regulatory sandbox to promote experimentation with innovative technology in the financial sector to speed up development of new services.
Amendments to the Value-Added Tax (VAT) regulations under the business tax law were proposed in August 2016. These amendments would require foreign e-commerce providers that sell products or services in Taiwan with revenues exceeding NT$480,000 to register with local tax authorities and pay 5% VAT. As of May 1, 2017, affected companies will be required to file bi-monthly VAT returns and pay VAT directly or indirectly through approved tax agents. This amendment aims to transfer the burden of paying VAT from the consumer to the business, and targets companies who were previously able to evade paying VAT by running their business exclusively through digital platforms to avoid establishing a physical location.
Additional amendments have been made targeting consumers who frequently import products from overseas. As of July 1, 2017, consumers who import products more than twice per month or six times per six-month period will be required to pay a new tariff. In addition, starting January 1, 2018 the previous tax-exempt import threshold of NT$3,000 has been reduced to NT$2,000. Consumers whose import orders surpass this threshold will be required to pay the tax.
Taiwan’s e-commerce market has a comprehensive infrastructure, consisting of policies like those mentioned above, as well as network financial, distribution, and credit systems. The major participants in the market are suppliers and brand owners, e-commerce platforms, such as PChome and Momo, and the consumers. Facilitating the transactions are Taiwan’s money flow service providers, including banks and other financial institutions, and distribution service providers. These include the island’s many courier companies and the postal service. Recent changes in Taiwan’s e-commerce ecosystem include incorporating live broadcast promotion on social media, expanding service and payment options, as well as adopting the idea of using big data and artificial intelligence to combine e-commerce platforms with traditional retail outlets.
In 2017 mobile retailing company, Shopee, had more than 10 million downloads. Through investing heavily in its mobile app, Shopee has a unique positioning in mobile retailing and caters well to Taiwan’s hyper connected and savvy online shoppers. Shopee also has utilized aggressive finance marketing tactics such as zero payment processing fees as well as free shipping while launching its mobile app.
Taiwan consumers purchase a wide variety of products when shopping with local e-commerce platforms, but media products, apparel and footwear, consumer electronics are the categories that top the list. Other popular items include beauty and personal care, consumer health, and personal accessories and eyewear. Mobile shopping will eventually become the primary way consumers purchase online.
In 2017, Market Intelligence & Consulting Institute (MIC) found cross-border e-commerce grew to NT$16,378 from NT$15,535 in 2016, a 5.4% increase. The most popular products purchased online from overseas include clothing and accessories, computer and electronic products, books, cosmetics and basic necessities.
Taiwan online shoppers most actively shop cross-borders in:
United States (21.4%)
Language barriers, shipping costs, and proliferation of a country’s brand names are all factors in Taiwan’s cross-border e-commerce consumer trends. The biggest barriers to cross-border sales from the e-merchants’ perspective are customs, warehousing and tax issues, as well as the lack of strong cross-border e-commerce infrastructure.
Taiwan has a robust B2B e-commerce environment, with two major e-commerce resources run by the Taiwan External Trade Development Council (TAITRA). TaiwanTrade is an e-commerce portal that allows businesses to find and match with suppliers, manufacturers and distributors. iDealEZ Online Marketplace is a platform that allows businesses to buy small quantity or sample items directly from the supplier. B2B e-commerce is most developed in the IT, chemical and textile industries due to programs initiated during the early 2000s.
Distribution services in Taiwan have been efficiently developed to account for all types of lifestyles. Beyond home delivery, consumers may have their purchases shipped for pick-up at any of the prolific convenience stores in Taiwan. Taiwan shoppers prize convenience, information, and affordability when shopping online.
77% considered shopping online convenience, 69% read product reviews online prior to purchase, and 52% believed that online stores offered better deals than physical retailers. Convenience stores in Taiwan operate 24/7 and thus provide the flexibility for working consumers to retrieve their deliveries.
For small- and medium-sized businesses looking to conduct B2C e-commerce in Taiwan, the platforms for opening an online store are convenient, attract a large customer traffic flow, and offer a range of services, including marketing tools and logistical resources.
Taiwan is currently not a member of the World Intellectual Property Organization (WIPO) but adheres to key international agreements as the Berne Convention and the Agreement on Trade-related Aspects of Intellectual Property Rights (IPR). Due to Taiwan’s significant advances in maintaining IPR, the Office of the U.S. Trade Representative removed Taiwan from the Special 301 Watch List in 2009.
- B2B Websites:
- TaiwanTrade iDealEZ
- B2C/B2B2C Websites:
- Yahoo! Taiwan
- ibon Mart
- Go Happy
- Rakuten Ichiba Taiwan
- Shopee Taiwan
- O2O Websites
- Online credit card uses
- Payment at convenience stores
- Payment on delivery
- Online banking payments
- Placing credit card orders by fax
- Bank transfer / Wire transfer
- Mobile payments
The Marketing Intelligence and Consulting Institute (MIC), a Taiwan-based market research firm, reported in 2017 that 75.7% of consumers used credit card as their preferred method of online payment. This was followed by convenience store pickup at 66.4%. Another popular option is ATM bank transfers at 25.2%.
In response to the growing importance of online payment methods, the Taiwan Act Governing Electronic Payment Institutions was introduced in January 2015. Its purpose is to define and regulate electronic payment institutions (EPI), increase trust in this form of payment by implementing stringent qualifications and restrictions on EPIs, and to prevent money-laundering schemes and other misuse of these resources.
Mobile shopping transactions have surpassed computer-based online shopping. In 2017, Taiwan’s mobile e-commerce reached 536.6 billion yuan and 48% of all online transactions. This percentage of mobile to computer based transactions is projected to increase to 61% by 2022. Taiwan mobile online shopping penetration rate reached 64.9% in 2017.
Considering the rapid growth of e-commerce in Taiwan, mobile e-commerce is likely to continue to expand as well. One of the main obstacles to this expansion is a reluctance by Taiwan consumers to pay using mobile devices, preferring instead to use cash.
Social media, primarily Facebook and the messaging app Line, is used as the primary online marketing outlet in Taiwan. In 2017, MIC reported that the top five channels most often used to purchase online consumer goods are portal sites like Yahoo (44.1%), Facebook (39.9%), TV commercials (38.2%), promotions from internet celebrities (21.2%), and the messaging app Line (17.4%). A number of local and international public relations firms based in Taiwan also help businesses promote their products or services online.
Those in Taiwan who purchased Facebook ads paid a 20% With Holding Tax (WHT) until the Taiwan Ministry of Finance issued a tax ruling on January 2, 2018 allowing for reductions to foreign enterprises that provide cross-border electronic services to Taiwan customers. Facebook Ireland applied and now Taiwan customers pay 6% WHT.
November 11th (11/11), also known as Single’s Day, is an unofficial major buying holiday observed by young people in both China and Taiwan. The date 11/11 was chosen because the number 1 represents an individual who is alone. On this day, young people who are not in a relationship celebrate their “single” status by indulging in both online and offline shopping for themselves or they will purchase gifts to initiate a new relationship on 11/11.
The major department stores have annual sales events during the fall season. These events see crowds of proportions similar to Black Friday in the United States.
Some of Taiwan’s consumers, through purchases and suppliers through special sales and advertising, have begun to celebrate other worldwide buying holiday’s such as Christmas, Black Friday, and Mother’s Day to name a few.
Social media has become extremely important to marketing products sold online in Taiwan. Facebook is the preferred method of digital marketing, with 63.4% of online vendors choosing to use it as a major marketing tool. This is due to the low cost of promoting through Facebook and the ability to reach a broad audience through the social media platform. E-merchants also highly depend upon word-of-mouth recommendations, which spread quickly on Facebook, to generate traffic.
Since its inception, Facebook has consistently grown and adapted to fulfil its user’s needs. Following recent trends of online video consumption and in-the-moment updates Facebook has released livestreaming and an auto-play video platform. Now on mobile devices a Facebook user can tap the Live Stream button and can broadcast themselves live to their Facebook friends. Also, after clicking to watch one video, Facebook generates a playlist of videos that auto-play after finishing the first. The success of the video auto-play platform has allowed Facebook to generate even more online advertisement sales.
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