Consumer electronics retailer Tsann Kuen 3C (燦坤) is hastening the opening of new stores, in an effort to dominate the local retail market before it reaches saturaturation point, an executive of the company said yesterday.
"Market space for consumer electronics outlets will probably be saturated within [the] next two years," said Eileen Shou (守寧寧), spokesperson of the company.
Tsann Kuen hopes to grab more than 50 percent of the market by the end of next year, she added.
Opening its first store in 1991, Tsann Kuen 3C has a total of 103 outlets, 30 of which were opened this year.
"We want to be the 7-eleven of consumer electronics stores in Taiwan," Shou stressed.
Tsann Kuen 3C, a subsidiary of Tsann Kuen Enterprise Co (燦坤實業) was listed on the TAIEX and the NASDAQ in 2000 and 2001 respectively. The company has NT$300 million in capital set aside specifically for outlet expansion.
Interestingly, the slow economy has helped Tsann Kuen's development plans.
"Some retailers went out of business in the [poor economic]climate, allowing us to establish new stores in good locations [at a lower] rent," Shou said.
Tsann Kuen will open two new stores in December, one on Taipei's Nanking East Road and the other in Hsimending, replacing City Mall (永琦百貨) and Lai Lai Department Stores (來來百貨) respectively.
And with rental property prices falling, Tsann Kuen took over the facility at a 20 percent discount.
One market pundit said Tsann Kuen's plan looked solid.
"When running a retail business, size or the number of stores is very important," said Wen Tuan-lien (文端廉), a retail industry analyst at Polaris Securities Co (寶來證券). Companies can enjoy lower operational costs and strong brand awareness once they reach an economy of scale, Wen explained.
1.Expand quicly before anticipated market saturation in two years
2.Take advantage of weakness by smaller players
3.Grab abandoned good locations
4.Use high-volume buying as a tool to buy low
In addition, as a distribution channel, Tsann Kuen's bargaining power with product manufacturers will increase when its outlet chain is expanding.
However, another analyst said it might be risky for Tsann Kuen to expand so fast.
"Every Tsann Kuen outlet covers thousands of pings and the rent is considerable," said Belinda Yu (于蕙玲), a deputy manager at Jih Sun Investment Co (
One industry source told the Taipei Times that Tsann Kuen's 2,000-ping flagship store in Shihlin costs them NT$2.2 million per month.
Sales of Tsann Kuen 3C in 2001 was NT$5 billion and its profit was NT$45 million.
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