DEVELOPMENT OF ELECTRONIC SHOPPING MALLS IN TAIWAN

National Sun Yat-sen University, Kaohsiung, Taiwan

The introduction of INTERNET, coupled with the development of information technology, is rapidly changing the way businesses are done. A surge of interests in electronic commerce has propagated from the United States, Japan and other developed countries to the four little dragons such as Taiwan. Electronic stores on the INTERNET are increasing in an unprecedented speed. More and more consumers are using INTERNET as a valuable source for collecting information and placing orders.

Electronic stores can be very profitable. For example, Amazon sold more than 17 million dollars of books and Auto-by-tel sold more than 200 thousand automobiles through the INTERNET. However, the customers shopping on the INTERNET are significantly differently from those visiting traditional stores in not only their demographic background but also their expectations and behaviors. In order to run a successful electronic store, therefore, design tailored to the requirement of electronic shoppers is necessary.

The purpose of this paper is to present the development of electronic stores in Taiwan. Based on a recent survey, most Taiwanese INTERNET shoppers are young adults with College or higher educational background. Over 42% of the INTERNET users have visited at least one electronic store. Among them, 28.5% actually ordered merchandise. The major reasons for ordering from electronic stores include time saving, convenience, broader product lines, easy to search alternative prices, and curiosity. Reasons for not purchasing on the web include don*t have the habit, feel insecure, unsure of product quality, cannot find the proper address, hard to return merchandise if necessary, and price too high. Most of them are casual buyers.

Given the above kind of buyers, most electronic stores in Taiwan are not profitable. Instead of relying on single stores, some businesses start putting together stores to become an electronic mall (or called virtual mall). The idea of electronic malls is to increase convenience and product variety to attract more customers. In this year, two major electronic malls opened in Taiwan: the AcerMall and BIZNET. The AcerMall was opened in March 1997, with 16 stores including products such as videos, computers, books, flowers, art items, magazines, and so on. The BIZNET was opened in April 1997, with 21 stores selling 3100 products. These malls have different strategies and designs to attract customers.

In this paper, we review the status of the electronic mall in Taiwan and present guidelines for designing a successful electronic mall based on the EKB*s consumer choice model. In the model, the consumer decision process is composed of five stages: problem identification, information gathering, alternative evaluation, choice, and outcome feedback. The design of electronic malls must support the customer needs at each of the stages. For instance, a mall may use consistent user interface, proper flow of product links, and on-line broadcasting to support problem identification. Product search engine and on-line discussion may also be used to facilitate information search and alternative evaluation. Intelligent agents capable of providing on-line help and other salesman functions may be useful to support alternative evaluation and choice stages.

Finally, we compare the functions provided in the current electronic malls in Taiwan and discuss the impact of electronic malls on traditional business and customer purchase behaviors.