Taiwan's retailers chalk up banner performance in 2005

This article was published by the Taiwan Headlines on March 6, 2006. It reports that the President Chain Store Corp., which operates the 7-Eleven convenience store franchise in Taiwan, chalked up a record turnover of NT$93.64 billion (US$2.93 billion) in 2005, making it the largest retailer on the island. The company's sales are expected to further increase in 2006, reaching the NT$100 billion (US$3.1 billion) mark. This will translate into revenues of about NT$270 billion (US$8.4 million) per day.

President has been conducting strong marketing campaigns and setting up new outlets, boosting the total number of 7-Elevens in Taiwan to more than 4,000. The company currently captures more than 50 percent of the domestic retail market.

Other retailers have been doing well too. The second-largest retailer in Taiwan in 2005, the Shin Kong Mitsukoshi Department store, was also the largest in the department store sector. The company gained about NT$61.1 billion (US$1.9 million) in revenues in 2005, thanks to such factors as the offering of free shopping coupons and the opening of its 13th outlet. The company's pre-tax profits of NT$6 billion (US$187 million) gave it the highest earnings per share (EPS) in the domestic retail industry, at NT$8. The aforementioned President Chain Store Corp. managed an EPS of just over NT$4.

The Sogo Pacific Department Store is currently the second-largest department store in Taiwan. Carrefour and R-T Mart are Taiwan's no. 1 and no. 2 hypermarket chains, respectively.

The article argues that conventional retail stores in Taiwan are facing a growing challenge from e-commerce. This new way of shopping has gradually won the confidence of local consumers, as a shopping mechanism using convenience stores for delivery. The e-commerce retailers have also developed methods of collecting payments and provided trial-use periods and ways of returning goods. As soon as they achieve a balance in their books, it is expected that e-commerce retails will begin offering products at much lower prices than what conventional retailers can afford.

Online shopping in Taiwan soared 50 percent to a total of NT$59.8 billion (US$1.87 billion) in 2005. The total is expected to surpass NT$100 billion in 2006. Specifically, PCHome and PayEasy, two major e-commerce players in Taiwan, chalked up growth rates of 60 to 80 percent in 2005, with a total of over 4000,000 orders, or one transaction every four seconds.

Meanwhile, the direct-sales business in Taiwan has also been doing well since 2000. In 2004, the total revenues of direct-sales businesses jumped 30 percent to NT$68.3 billion (US$2.13 billion).