If eretailers are wondering why Internet sales are weak in Asia, they need to look no further than the Asian consumer's typical online shopping experience. First, due to resistance by Asian banks to allow online merchants access to their payment gateways - a common practice that enables ecommerce in the United States - most Asian consumers make their online purchases not from Asian eretailers, but from U.S.-based companies. So once the consumer views the Web site - typically available only in English - and orders the product, the shipping charges generally are higher than the cost of the item. Further, if the consumer has a question about the product, the toll-free numbers listed on most eretailers' Web sites are not available to Asian consumers and the call-center staffs typically do not speak Chinese, Japanese or Korean.

For American multi-channel eretailers and Internet pure-plays, why is this a concern? Considering that 50 percent of the world's popular lives within four hours of Hong Kong, U.S.-centric eretailers are passing on a potentially excellent opportunity to acquire a substantial number of customers whose customer-service demands are far lower than those of Americans, according to Simon Hsu, chairman and CEO of Hong Kong-based E-Commerce Logistics Ltd. (ECL), www.eclasia.com.

"I use the analogy of bicycles vs. planes," Hsu says, "Asian consumers and eretailers are in the age of bicycles. Offer them a motorcyle, and they will be happy. American eretailers are in the age of the automobile, but their customers want airplanes. As a result, customer-acquisition costs for eretailers in the U.S. are very high."

Just how large is the opportunity in Asia? ECL cities research by IDC that indicates the total number of Internet users in Asia-Pacific will increase from 38 million today to 374 million in 2005. Similarly, Goldman Sachs forecasts ecommerce activity in Asia will grow from $3 billion in 2000 to $52 billion in 2003.

Yet, for a number of reasons, eretailing is struggling to succeed in the Asian market. According to Hsu, Asian consumers are caught in a sort of catch-22 with regard to online shopping. First the technology that enables ecommerce was developed in the United States and Asian countries are still ramping up. This includes local eretailers, banks and logistics operations.

As a result, many Asian consumers make their online purchases through U.S.-based Web sites - which leads to a new set of challenges, from transportation to communications. According to Hsu, Asian consumers have grown accustomed to being treated as "second-class citizens" by U.S. eretailers.

"What's worse is that while I am among the 10 percent of Asians comfortable communicating in English, what about those 90 percent of Asians who are paying for the call, do not feel comfortable trying to communicate in English and are paying for the call so they can ask a question?" he asks.

But where there are challenges, there are opportunities. ECL has spent the past year building a 60-seat call center, 100,000 square feet of ecommerce-specific warehouse space and a fully automated fulfillment processing center, all of which can serve as an Asian back end that can integrate seamlessly with the front end of a U.S. eretailer's site. With its cutting-edge call center, ECL's call staff knows which of its customers' customers are calling and what language they prefer to speak. Its warehouse and fulfillment services can guarantee package delivery in 24 to 48 hours throughout most of Asia at a fraction of the cost of shipping from the United States and provide service levels beyond those expected by Asian consumers.

"We tell our customers in the United States to adhere to the 80/20 rule to start out," Hsu says. "Place an 'Asian Click' on your existing site and make just 20 percent of your best-selling products available for rapid delivery in Asia. Provide that level of service to Asian consumers - what is considered standard practice in the U.S. - and you will see sales and you will build a brand in this region. It's a large market and, today, it's a wide-open market."