2018 RETAIL ASIA-PACIFIC TOP 500
OVERVIEW
METHODOLOGY growth owing to the significant rise in Internet retailing and aggressive marketing and promotional activities from major retailing companies. The increasing number of single-person households and operators’ efforts to attract these households will be another growth engine for retailing in South Korea. In addition to this, the heavy usage rate of mobile devices will lead to Internet retailing recording strong growth again during the forecast period. Also, many shopping complexes built by large retailing groups such as Shinsegae, Hyundai and Lotte will attract more consumers to their outlets, which will in turn result in constant value growth in retailing over the forecast period. However, as there are more global companies trying to launch very soon, market competition will be more severe than ever.
— Jade Lee, Analyst
TAIWAN
Consumer demand for convenience and comfort Comfort and convenience are important factors when Taiwanese consumers decide how to shop. Players across supermarkets, convenience stores and apparel and footwear specialist retailers have all undertaken major store upgrades to improve the consumer shopping experience, which has in turn changed Taiwanese consumers’ expectations. Major retail players, including the variety store chain POYA and leading supermarket chains, have continued to expand their outlet numbers, bringing stores closer to consumers in both major urban centres and smaller cities. Supermarket chains are also fulfilling the consumer demand for smaller format stores, with consumers increasingly favouring this format over hypermarkets. As part of this trend, leading hypermarkets player PresiCarre has ramped up the expansion of its supermarkets retail brand Carrefour Market, doubling store numbers between 2015 and 2017. In another development designed to enhance consumer convenience, leading convenience stores chain 7-Eleven expanded its payment methods to include credit card for the first time in 2017.
Internet retailers continue to address consumer confidence issues Although the Internet has steadily grown in importance in the personal and work lives of most Taiwanese consumers, Internet retailers have faced a series of consumer trust issues. In the early review period, online players were forced to address a lack of consumer confidence in online purchasing security, which greatly discouraged consumers from shopping online. This was gradually dealt with by offering consumers a very broad range of payment methods, which extended beyond online options, and included payment via ATM and through convenience stores. Likewise, a range of delivery options quickly became commonplace in order to make online shopping very convenient. Retailers further enhanced consumer confidence through very good returns policies, rapid delivery options and sometimes free delivery. Singapore-based retailer Shopee introduced two-hour delivery in late 2017 in the Taipei metro area, followed closely by PC Home. This has now extended to multiple cities. One major emerging challenge is that of counterfeit products. Even well-established retailers have been duped into selling fake products. This has the potential to become a serious problem not only for retailers, but for the Internet retailing channel as a whole, due to the speed with which consumers can learn about such issues.
Strong preference for Japanese brands Taiwanese consumers’ interest in Japanese fashions, designs and products continues to strengthen. Major Japanese chains either command a strong presence in their respective channels or are pursuing active expansion in Taiwan. Japanese chained optical good stores, such as Owndays and Jins, have shaken up this channel, bringing greater price transparency along with a simpler choice of on-trend products for consumers. The dominant players in department stores remain long-established Japanese players, including Pacific Sogo, Shin Kong Mitsukoshi and Takashimaya Department Store, which are favoured for their more premium image and Japanese service model. Shoppers now also have easy access to an ever-broadening range of Japanese food products and delicacies, offered through convenience stores and Internet portals. In a very different development, major convenience stores chain Family Mart has introduced an inexpensive store-to-store delivery service between Taiwan and Japan, which taps into the large number of people travelling between the two countries.
Economic and social factors drive the demand for greater choice Consumer attitudes in Taiwan are changing, as a result of prolonged economic pressures in the form of weak spending power, younger consumers developing a greater interest in discovering new brands and products, and from the proliferation of companies delivering affordable, on-trend products. Formats such as Internet retailing and outlet shopping centres are growing in popularity. These channels give consumers access to a greater choice of products at better prices. The supermarkets channel has seen the expansion of more distinct formats— including neighbourhood supermarkets, standard chains and premium stores— which provide consumers with even greater choice based on their needs. Within apparel and footwear, fast fashion chains have increased the range of trend-driven products available at reasonable prices. By contrast, retail channels that have relied on a model of less choice for consumers in the past are seeing growth fall below other channels. Hypermarkets and department stores have typically provided limited choice, combined with poor brand portfolios or high prices.
Moderate growth for retailing in Taiwan, which is already well developed Retailing in Taiwan is already very well developed. Slow growth is expected over the forecast period, despite already being a mature market. Key threats to growth are expected to arise from the country’ s slow population growth and the ageing population, which is likely to see a slightly shrinking consumer base. Nonstore retailers are anticipated to increase in importance, with Internet retailing expected to record strong growth, driven by pure Internet retailers and an increasing number of store-based players embracing a multi-channel approach. Direct selling is also expected to see rapid growth, as the existing players revamp their image to compete head-on with other channels, and also due to the influx of new direct selling retailers. Among storebased channels, warehouse clubs is expected to continue to see a robust performance. This is a popular channel which has gained
52 Retail Asia June / July 2018