The report, by Internet research firm eMarketer, said Japan boasts 36 percent of Asia's Internet population, but its share will shrink to 18.5 percent by 2004 as the ranks of users from the People's Republic of China swell to 17.4 percent of Asia's total.

The report predicts Asia's total Internet population will surge from 49 million users in 2000 to 173 million in 2004, a 38 percent compound annual growth rate, increasing the region's share of the world's online population from 21 to 27 percent.

Asian e-commerce revenues are projected to rise from US$39.4 billion in 2000 to US$338 billion by 2004, but the growth in Asian e-commerce will be outstripped by the rest of the world, said eMarketer analyst Eddie Cheung.

"The region as a whole still accounts for only a fraction of the total revenues on a worldwide basis," he said. The report expects Asian e-commerce revenues to peak at 14 percent of the world's total, but to fall to 10.6 percent by 2004.