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These companies deliver the goods, one at a time

A Takkyubin deliveryman is reflected in the window of his delivery vehicle as he makes his rounds. PHOTO: JACKIE LIN, TAIPEI TIMES

At 7am in Taipei City's Nankang District, Chang Shang-hsian (張尚賢) and his colleagues are loading their vans with parcels and packages that have just been transported from a major distribution center in Linkou, Taoyuan County.

After sorting out their delivery sheets and placing them in the order of their route, these "sales-drivers" join the early morning heavy traffic heading toward downtown Taipei, where some companies and households are awaiting the packages to be delivered to their doorstep.

"We are always racing with time," Chang, 25, said. He is a two-year veteran at President Transnet Corp (統一速達), which manages the Japanese home-delivery service Takkyubin (宅急便) in Taiwan.

On an average day, Chang has to deliver 70 to 80 packages per morning, and the number always soars above 100 during holidays such as Valentine's Day, Mother's Day, the Lunar New Year, the Dragon Boat Festival and the Mid-Autumn Festival.

"We are called `SD,' or `sales-drivers,' because we are also responsible for developing business," Chang said as he jumped onto the driver's seat.

A ''sales-driver'' with Takkyubin loads a package into his vehicle. PHOTO: JACKIE LIN, TAIPEI TIMES

With 808 Takkyubin vans running around the nation each day, the market for delivery services, or chai pei (宅配) in Mandarin, has been expanding since President Transnet and its major competitor Taiwan Pelican Express Co (台灣宅配通) ushered the business from Japan to Taiwan in 2000.

In addition to normal package and letter deliveries, President Transnet -- a subsidiary of President Chain Store Corp (統一超商), which runs 7-Eleven outlets -- also offers low-temperature and frozen transport facilities, which makes deliveries of seafood, fruits and meat possible.

"In the past few weeks we have transported many boxes of lychees from central and southern Taiwan to the north," Chang said, as he unloaded two cartons of the seasonal fruit from the refrigerator installed in the van.

President Transnet focuses mostly on C2C (customer-to-customer) transactions, which account for over 50 percent of its business, while Taiwan Pelican's business is comprised of 80 percent B2C (business to customer) transactions and 20 percent C2C transactions.

Taiwan Pelican's marketing manager, Ann Chien (簡欣欣), said C2C relies heavily on an expanded network of retail channels, especially convenience stores, and "we do not have this edge, compared with President Transnet." Hence the different market positions of the two companies, she said.

President Transnet has more than 15,000 locations where customers can consign packages to the more than 3,500 7-Eleven outlets that have helped it secure advantages in the growing market.

The trademark of the Takkyubin service -- flags featuring two black cats -- can also be seen in the nation's Niko Mart (福客多) and OK Mart convenience stores, cosmetics retailer Cosmed (康是美), hypermarket operator Carrefour and home furnishings store Working House (生活工場).

Taiwan Pelican -- with a white pelican logo -- has also expanded its network of pick-up sites to 14,000 locations nationwide, with a fleet of 600 vans and motorbikes.

A joint venture between Taiwan's Teco Electric and Machinery Co (東元電機) and Japan's Nippon Express, Taiwan Pelican started offering delivery services in July 2000, three months before the "black cats" were running on Taiwan's streets.

Chien said that as the sector has developed in the nation for four years, it is believed that there is more potential to be tapped.

In Japan, around 20 packages are delivered per person through home-delivery services each year, she said. But in Taiwan, the figure is less than one.

"We're not trying to be greedy. But just think about making that figure grow three to five times. That indicates there are a plenty of business opportunities to be developed," she said.

Even though both companies have painted a rosy picture of the sector's outlook, they have yet to taste success, as their financial statements are still in the red.

At President Chain's investor conference in April, the company reported shrinking losses in President Transnet's revenues for last year.

"We are optimistic that the company will turn a profit this year," Wu Wen-chi (吳玟琪), the company's head of investor relations, said at the time.

Taiwan Pelican expects to break even this year. Chien said the company hopes to achieve NT$1.6 billion in revenues by December, up from last year's NT$1.2 billion.

Even as these two companies have made chai pei a familiar term among local shoppers, they have forced the nation's postal service to adapt.

"Since this new kind of demand has emerged, we have to offer diversified services to fight for market share," said Beggy Yeh (葉淑美), a section chief at state-run Chunghwa Post Co (中華郵政), which operates 1,316 post offices around the country.

Yeh noted that, after home-delivery companies were established, the number of packages handled by post offices has dropped.

"The lack of chai pei services for fresh foodstuffs has dragged down our business," she added.

According to the Ministry of Transportation and Communications' statistics, post offices delivered 17.2 million packages in 2000. The figure dropped to 10.6 million in 2001 and continued to plunge to a record-low 8 million in 2002.

To remedy this situation, Chunghwa Post also jumped on the chai pei bandwagon, and launched home-delivery services for frozen and perishable goods earlier this year.

At the initial stage, the service was limited to major cities such as Taipei, Taichung, Kaohsiung, Hsinchu and Tainan.

Since July 1, the network has been expanded nationwide, but as of now only 13 main post offices can receive consignments of perishable goods.

Alisa Lin (林玉霞), in charge of vehicle purchases for Chunghwa Post, said that by the end of this year, the company will have invested NT$36.4 million on 32 vans and trucks it requires for its brand-new service.

In addition, over 10,000 regular postal vans and motorcycles will also be equipped with mobile refrigeration devices to facilitate delivery of perishable goods.

"The public response has been very positive. We're confident we can challenge private companies with our high-quality service," Yeh said.

It remains to be seen whether or not these delivery service providers can turn a profit soon.

But one thing is for sure: the increased competition leaves customers as the biggest winners.

All three companies offer pick-up and delivery services 365 days a year.

"I like to serve people. And this is clear proof: healthy competition boosts quality of service," Chang said.

And what was the worst obstacle Chang encountered in his daily rounds?

"I hate it when my van gets towed away. It's a waste of time," he said.
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