The head of French retailer fnac (
"To deal with heavy competition in the neighborhood, we have no problem engaging in price wars," said Yves Lagier, new general manager at fnac Taiwan.
The retailer's second outlet in Taiwan, situated smack in the middle of several electronics shops, CDs stores and department stores, is scheduled to officially open on Thursday.
"This is a wonderful location with heavy traffic, and we are ready to embrace students and commuters -- and there is no denying the strong competition here," Lagier said.
Opening its first store in France in 1957, fnac currently has 60 outlets in 33 counties around the world.
Two years ago, fnac chose Taiwan as its first foothold in Asia, establishing its pilot store in the Asiaworld complex in Taipei. The stores specialize in electronics, books, CDs and videos.
With an NT$80 million initial investment for the new store, top brass in town from France said they hope to break even within three years.
"With our first outlet in Taipei reporting about 10 percent sales growth year-on-year, we are confident of even higher revenue from this new store," said Jean-Paul Giraud, president of fnac.
One strategy used by fnac to increase revenue is membership.
"I know a lot of people enjoy shopping at our stores without making any purchases, so we have to convert these visitors into customers," Giraud said. "Therefore, we make use of the `members only discounts' to attract customers and increase [fnac] brand loyalty."
Membership -- priced at NT$300 a year for adults and NT$150 for students -- offers discounts, rebates and activity admissions to all members. But there is a catch -- membership is for a minimum of three years.
Currently the company has more than 20,000 members in Taiwan, accounting for 30 percent of annual Taiwan sales.
"Compared with 50 percent of sales coming from membership in France, we can see there is still a lot of room to grow here," Giraud said.
However, with an old hand in the electronics field located nearby, the foreign company will face stiff competition.
"In terms of price, I'm sure we are very competitive," said Lin Chih-tsai (
Having established its first outlet near the Taipei train station in 1996, Nova is no novice when it comes to snagging customers.
"Consumers in this district are very sensitive about price -- 40 percent of our customers are students, 30 percent are white-collar workers and another 30 percent techies."
Lin said that due to fnac's centralized control, they can only offer fixed prices, while retailers within the Nova market can offer different discounts for each customer.
"Our pricing strategy is much more flexible than fnac. And the price cycle of high-tech products is very short and can reach the bottom within six months, so a timely pricing strategy is very important."
But the fnac official emphasizes that quality service and environment are strengths that other retailers can't compete with.
"We've imported a lot of books, CDs and high-end products that are not available in Taiwan. But more importantly, we create a comfortable shopping environment," Lagier said.
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