Study: Digital TV Key to Asian E-Commerce

Interactive digital TV may be the Asia-Pacific region’s key to catching up with the rest of the e-commerce world, according to a report released Tuesday by Andersen Consulting.

According to the study, the Asia-Pacific region boasts the highest rates of TV penetration in the world, along with a substantial and growing broadband subscriber base. Cable and satellite TV businesses in the region are expected to earn total revenues from consumer purchases of more than US$46 billion within a decade.

“For the business world, digital TV marks the second wave of the e-commerce gold rush, and is likely to have even more profound and wide-sweeping implications for business-to-consumer (B2C) commerce than the Internet,” said Steve Snyder, managing partner for Andersen Consulting’s Asia media and entertainment industry group.

TV Reach Dwarfs PCs

Government deregulation and a willingness by Asian youth to embrace new TV technology will throw the market wide open in almost every retail industry, the study says.

According to Andersen, a much higher number of Asian households own TV sets than own PCs. For example, China’s major cities have nearly 100 percent cable penetration and Singapore has already cabled 99 percent of all its homes. In China, 88 percent of the population owns a TV, while well under one percent possesses a PC.

“With high television penetration rates, extensive cable TV networks, strong growth in broadband internet penetration, and a youthful population, the Asia-Pacific region is well positioned to carve out a leading role in a medium that will ultimately reshape the way the world lives, works and plays,” Snyder said.

Spreading the Magic

Analysts believe television sets will increasingly be used for shopping, banking and electronic communications. Currently, 470 million households in the region are connected to cable and satellite TV networks, more than those in either the U.S. or Europe.

“The combination of digital technology and broadband pipes makes possible a vast array of new services,” the study said, “enabling companies to create and offer services to engage and build long-term relationships with an unprecedented number of consumers.”

Uncertainties Remain

Although the advent of digital TV will create opportunities for fast-moving e-companies in almost every Asian service industry, the true impact of digital TV may hinge on several unresolved factors.

For example, the initial high costs of digital TV sets may preclude consumers from hopping on board. Building comfort levels and the ability of broadcasters to create engaging content will also play a major role in the e-commerce success of the new medium.

“Companies who are the first to move in digital TV will achieve tremendous competitive advantages,” the study said. “These advantages include building a powerful brand franchise through customer mind-share, strong investor support, and positive responses from market analysts.”