Just how backward are Taiwan's online shops?

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NOTE: the predictions made in this articles have already become true. Shopee has entered the market and is growing fast. 

Taiwan is a fascinating country. A tech hub with a burgeoning startup industry. Exporter of incredible talent to the tech giants of the West, from Amazon to Alphabet. Some of the best programmers in the world. And yet, when it comes to e-commerce, it is still 2007.

The websites of the leading online retailers in Taiwan, PC Home, Rakuten and Yahoo, are complete disasters. You can barely find what you are looking for, there are no product recommendations; heck, there is almost no technology involved that was developed in the last 10 years. Time has stopped.

Across the nation, online retails offer such basic sites it's amazing that anyone is actually shopping online. (And people are, growth is actually quite brisk!) But what are the advances that Taiwan completely missed out on? 



Taiwan's online offerings have absolutely no degree of personalization. Sites don't remember you, don't remember what you bought last time, and don't record any kind of information that may be useful in customizing your shopping experience. Every visitor sees the same products on the cluttered home page. Some sites don't even use cookies. Privacy is alive and kicking in Taiwan - but user experience is terrible.


Time-saving options

Most retailers in Taiwan require you to re-enter shipping and credit card information every time you shop. The country hasn't even made it into the age of 1-Click-Shopping. That has a little bit to do with regulations and laws, and the totally outdated e-payment systems available. But there are ways around it, and no one has implemented them.


E-mail, Retargeting, Feedback, Ratings

The same goes for email and retargeting. Absolutely nobody does it. No e-mail newsletters, no retargeting on digital platforms, nothing. I would actually like to get an e-mail from PCHome when my detergent is on sale, but no such luck. I have to check the site for any current offer, and even then it's not going to be shown to me but to everyone.

Taiwanese e-commerce providers don't even want to hear from their clients. There are no comment sections, ratings, product reviews. One operator explained this, rather comically, thus: "We don't want to hear what people think about the products we offer. What if they don't like what they bought?" The comment neatly sums up the concerns Taiwanese - and by the way, many Asian - operators have about customer interaction. 

But personalization is only as good as the data about products and the site’s ability to influence a shopper. Shoppers who are logged in and whose behavior can be tied to past purchase history are likely to get the most relevant recommendations. But a lot of guesses can be made based on behavior alone. As long as a personalization engine can piece together similarities between how you shop compared to how other people before you have shopped and has good access to product data, it can make pretty good guesses as to what other products you might also like to see and how to organize them.


AI, big data, and machine learning

Even though some of the world's best AI and ML engineers come from Taiwan, there is absolutely no sign of AI/ML on Taiwan's e-commerce platforms. No dynamic call to action, no suggestions based on what others have bought, no machine learning algorithms that predict what you might do next on the site. 


Inventory-driven recommendations

It is in the best interest of every online retailer to use the flexibility of an online platform and push some unwanted inventory to the front of the queue. But Taiwan doesn't even bother with that. Suppliers are regularly forced to take back inventory, just because the software behind the shopping sites is no able to push items "on discount". I use the term "software" loosely. Some of the code on the main sites is actually 10 years old. This would be unthinkable in Europe or the US.


Dynamic and fuzzy filters

Even Amazon is still pretty weak when it comes to filtering products, but in Taiwan, it's all about drop-down menus and categories that never really match what you are looking for. Finding a specific piece of furniture on PCHome for example takes hours. It's easy enough if you know the brand you want, but there are absolutely no options to search for specific product features. 


Stubborn belief in ownership

Taiwan has over 6000 online shops of local manufacturers, most of them with no clients at all. They look at PCHome & Co and decide they can do this themselves, whereas, say, in the US, small companies look at Amazon and realize they could never catch up. So, whereas America faces a near-monopoly of Amazon that brings down brick-and-mortar stores, the backwardness of Taiwan's leading e-retailers means there is plenty of room for competitors, altogether stuck in a time warp. 

There is also an Asian reluctance to share data with others openly, which means that most manufacturers believe they simply must own the e-shop and the customer data, even if it means they will lose out on the business opportunities offered by technological solutions like Commerce Connector, which lets users browse a brand while shopping wherever they prefer.


Now, as for the reasons ... 

The big e-retailers in Taiwan run cut-throat businesses on thin margins. Yahoo, Rakuten, PC Home share the bulk of the market, and since none of them is an innovator none of them feel the pressure. But it is also a data problem. Filters for example, which would do wonders for personalization, are only as good as the data, and Taiwan's suppliers simply don't provide that kind of detail. It would be easy for any of the big three to pull ahead and add the necessary details, but as long as they all keep their powder dry, none of them wants to move first. 

Other online shops have often simply copied what they see on the main platforms, which haven't changed in a decade. That means that even shops coming online today, in 2017, look and feel as if they were built 10 years ago. 

Another reason is that China with its burgeoning home-grown e-commerce solutions has attracted (not to say "poached") a lot of talent from Taiwan.

There is one last curious reason: a great push for app development skills by schools and universities some time ago, and the near-collapse of Yahoo have lead to an oversupply of app programmers, which lead to the creation of a handful of firms which promote the "site + app" model for online shopping. Almost every seminar on e-commerce I have attended in the last 3 years tells manufacturers that the future lies in mobile apps, conveniently hiding the fact that fewer than 2% of apps are ever downloaded or used.

As a consequence, Taiwan is full of outdated, unattractive e-commerce sites which nobody visits, and perhaps amazing apps, which no one downloads. The only people profiting from this are the unscrupulous companies which keep touting a totally irrelevant business model.

Taiwan's e-retailers seem to be destined to remain stuck in the last decade. It would take a single company like Amazon to destroy the entire ecosystem of online retail in Taiwan. But so far, no one has taken the bait. (It now looks like China's behemoths like Tencent, JD.com and Alibaba may make the first serious moves, which of course stirs up a hornet's nest of political implications. But then again, Western companies tend to underinvest in Taiwan for fear of losing their chance in the Chinese market.)

It will be exciting to see who in the end will bring e-commerce in Taiwan up to scratch.