Despite deep personal and business ties in the country, it was still a big challenge and took the better part of a decade for Newegg Inc. to build a successful e-commerce base in China.

In the early years web sales were paltry, totaling only $35 million in 2008 as Newegg, No. 28 in the 2013 Internet Retailer Asia 500, spent heavily to develop a local and regional delivery network, establish a supply chain, build a headquarters, and then develop—and constantly redevelop—an e-commerce site that appealed to China’s growing base of web shoppers.

But Newegg, a U.S. based online retailer of computer and consumer electronics, saw early on there was a big opportunity to develop an online retailing base in Asia, now the world’s biggest and fastest-growing direct-to-consumer e-commerce market with sales that reached $377.98 billion in 2012 up 25.9% from $300.19 billion in 2011, according to data in Internet Retailer’s newly published 2013 Asia 500. And now other U.S. web merchants such as Amazon.com (No. 4), eBay Inc. (No. 7), Apple Inc. (No. 11), Vistaprint USA Inc. (No. 142), Gap Inc. (No. 199) and others are targeting Asia, and especially China, for opportunity and growth.

Compared to other global regions, U.S. web merchants are still building an e-commerce base in Asia. In 2012 the combined web sales of all 39 U.S. web merchants ranked in the Asia 500 grew about 18.9% to $15.81 billion from $13.30 billion in 2011. Those sales accounted for 6.4% of all Asia 500 web sales of $248.69 billion. In comparison the combined online sales of all U.S. merchants ranked in Internet Retailer’s 2012 Europe 400 totaled $26.09 billion and accounted for 25% of all Europe 400 sales of $104.4 billion, while in Internet Retalier’s 2012 Top 300 Latin America the collective sales of all U.S. online retailers grew 17.5% to $1.56 billion and amounted to 14% of all Top 300 Latin America e-commerce sales of $11.17 billion.

In Asia many U.S. retailers see a huge market unfolding—and big barriers to overcome in order to build a base. Consider these Asian e-commerce growth statistics from the Asia 500: 

• China is Asia’s biggest e-commerce market and one that could overtake the U.S. as the single largest national online retail market as soon as this year. In 2012, online retail sales in China totaled $179.00 billion, up 42.2% from $125.90 billion in the previous year, says the China Ministry of Commerce. But the ministry made its projection in May. By other estimates China’s e-commerce sales in 2012 were much higher, including a projection of $219.1 billion from Forrester Research Inc. By that estimate, web sales in China grew even faster year over year: by 74.2%.
• India’s online customer base of around 20 million shoppers could increase as much as 1400% and reach 300 million shoppers within 10 years.
• Out of a total population of 124.4 million in Japan, about 58.7%—73 million—are online shoppers.
• In South Korea the country’s 2012 e-commerce sales of $20.91 billion accounted for 11.4% of total retail sales of $184.00 billion.

To succeed in Asia, a region of the world with no uniform currency, language and commercial code, U.S. web merchants are building their e-commerce base by picking their individual Asian markets carefully and developing a strategy that appeals to local shoppers. In 2012 Newegg’s sales in China grew year over year 66.5% to $400 million from $240.3 million in 2011.

Newegg’s China sales are growing because the retailer has spent considerable time and money developing lasting customer service, fulfillment and marketing strategies that resonate with Chinese web shoppers. Newegg says it was one of the first online retailers to offer live chat as a customer service tool and expand its product inventory to include household appliances and sell longer-term warranties and installation services. “China is now our second-largest market, and it continues to grow rapidly,” says Newegg China president Mike Chou.

Japan is now Amazon’s second-largest foreign market behind Germany. In 2012 Amazon’s Japanese sales grew year over nearly 19% to $7.80 billion from $6.57 billion. Sales for Amazon in Japan are growing because Amazon studied Japan’s e-commerce market in depth and got in early with a web site that catered to the needs of local shoppers. Now Amazon continues to add its e-commerce business with new initiatives such as expanding next-day delivery to more of western Japan, adding more inventory to product categories such as fashion and food and opening a Kindle book store with digital content entirely in Japanese.

“Amazon in Japan is setting a bar a lot of other U.S. retailers and Japanese retailers will have to meet,” says Scot Wingo, a veteran Amazon watcher and CEO of Channel Advisor, a U.S. company that helps retailers sell on various marketplaces, such as eBay and Amazon. 

The strategies U.S. merchants are adopting to sell online in Asia are diverse. Vistaprint, an online retailer of printing products with Asian sales that grew year over 44% to $61.2 million from $42.5, is expanding into India through its acquisiton of Printbell, a Mumbai-based printing products and business-to-business e-commerce company. In China Wal-Mart Stores Inc. (No. 244) is building its e-commerce base by acquiring a 51% stake in Yihaodian (No. 42), a Chinese online retailer of food staples and other merchandise.

More American retailers and consumer brand manufacturers  are expected to target Asia for growth online. But in order to succeed they need in-depth data and thoroughly reported analysis on who the e-commerce market leaders are and what’s driving their growth.

That’s the prinicpal reason Internet Retailer spent months researching the market and ranking the biggest e-retailers in the newly published Asia 500,” says Internet Retailer publisher Jack Love.

“In the new Asia 500 Guide, American e-retailers will be able to assess the tantalizing opportunities the Asia market offers them, whether they enter it through the many online marketplaces or portals that dominate Asian e-commerce or develop their own Asia web sites to compete with fast-growing local web sites, which typically lack the technical sophistication of the Americans who have invented and perfected e-commerce,” Love says. “Either way, they will find e-commerce financial, operational and contact information of their potential Asian partners and competitors.”

The Asia 500 is available in three formats: print, digital and as part of the all-new and completely updated Top500Guide.com. Information on how to order the brand-new 2013 Asia 500 Guide is available here. 

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