Mon, Aug 08, 2005 - Page 11 News List

Hello Kitty craze a tough act to follow

COLLECTIBLES After sales shot up as high as 36 percent, President Chain Store is looking for a way it can build on the consumer loyalty gathered from a successful strategy

By Jackie Lin  /  STAFF REPORTER

Taiwan Nikomart Co (福客多), the nation's fifth-largest convenience store chain, also followed suit to reward purchases surpassing NT$39. The program, launched in mid-July, raised store revenues in the first two weeks last month by 11 percent from June, and the average spending per transaction up 12 percent, the retailer's sales director, Jan Chun-ying (詹淳櫻) said.

These players are laboriously catching up with the market leader's moves, but, restricted by their resources and market share, the effect they created still seems minute.

"When their availability and accessibility have not reached a critical mass, it is hard to produce the effect they desire," said Jennifer Wang (王琇姿), associate director at ACNielsen Taiwan's retail measurement services.

But it is worth observing whether the four smaller chains -- Taiwan FamilyMart, Hi-Life International Co (萊爾富), Taiwan Nikomart and OK Convenience Stores -- will develop a strategic alliance through their online venture, cvs.com.tw (便利達康公司), Wang said. The venture, with the four companies' heads sitting on its board, currently offers an e-commerce platform for the four chains, and facilitates their joint purchases in certain commodities, including bottled water, telephone cards and wine.

Unifying forces

In a meeting late last month, the four chiefs touched upon the possibility of unifying forces and integrating marketing resources to compete head-on against 7-Eleven.

For President Chain, whose 7-Eleven has secured over 50 percent of the market, how to extend the momentum it has gathered on the Hello Kitty fad is the main issue facing its management.

Hsu Chung-jen (徐重仁), president of President Chain, expressed confidence last week that the company's third-quarter sales would exceed those in the second quarter, as it is traditionally the market's boom season and the Hello Kitty campaign has successfully changed consumers' shopping habits.

ACNielsen's Wang held reservations about Hsu's remark.

Wang said consumers choose to shop at a convenience store based on whether it is close. Therefore, without the lure of cute Hello Kitty magnets, consumers may not bother walking a few more steps to patronize 7-Eleven, she said, adding that President Chain may see its revenues fall back to the similar levels before the campaign.

But National Chengchi University's Lai appeared not so pessimistic, referring to the "icash" card, the stored-value cards developed for use in 7-Eleven outlets, that may have the potential to foster consumer loyalty.

Star symbol

In addition, with long-term development, President Chain's cartoon spokesperson, Open (Open小將), could become a star symbol, the equivalent of Mister Donut's mascot Pon de Lion, he added.

"It requires several years of effort and heavily invested marketing -- such as integrating the icon with products, animation and digital content -- to support and make well-known an invented figure, like what we've seen in A-Kuei (阿貴)," a Taiwanese e-cartoon character, Lai said.

"But it will be the direction it has to take if President Chain aims to stand out in the competitive sector," Lai added.

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