Pxmart (全聯社), the nation's biggest "hard discounter" better known as Chuan Lian center (全聯福利中心), has mapped out an aggressive expansion plan to challenge supermarkets, with some hypermarkets also likely to feel the pinch.
The hard discount chain, aiming to open up to 320 stores nationwide by the end of the year to achieve annual sales of NT$30 billion (US$903.6 million), is putting its new business model of including fresh foodstuffs among the product mix to the test.
It currently offers fresh food products in more than 20 outlets, including the five Sunmade supermarkets (
"To better serve consumers, we think it's important to offer a complete product mix," he said.
Fresh food is a powerful tool to boost customer traffic. The chain has seen fresh food contributing to around 15 percent of revenues in the 20-strong stores, with one on Taipei's Nanjing E. Road even reporting 30 percent of fresh food sales, chairman Lin Ming-hsiung (林敏雄) said.
"That store has an advantage of being located in an area with a high population of office workers and no traditional markets nearby," Lin explained.
This would become the principle on which the firm bases decisions regarding which stores it will introduce fresh food to. Its initial plan will be to stock fresh produce in downtown stores where busy white-collar workers may find it convenient to shop.
Taking a different approach from hypermarkets where the maxim is "the bigger the better," most Pxmart outlets are between 150 ping (495m2) and 200 ping and situated in inconspicuous areas, especially in second-tier counties and townships, because "we couldn't afford to extra expenditures like high rents and we want to offer the best prices to consumers," Tsai said.
Its major focus now is to extend its tentacles into urban areas and islets like Kinmen, with a mid-term goal of opening 500 stores by 2010, which Tsai said might be achieved ahead of schedule.
Many attribute Pxmart's fast expansion to its successful policy of offering hypermarket-level prices on a supermarket-like scale.
Pxmart was formerly a low-priced grocery chain the government had set up for military personnel, government officials and teachers to buy daily necessities, and special cards were required for entry.
In late 1998, it was taken over by Yuan Li Construction Co (
The firm's boss, Lin Ming-hsiung, also chairman of Hwatai Bank (華泰銀行), decided to maintain the retailer's status as a discounter that serves as "the community's good neighbor," manifested on its proximity to local neighborhoods and bare-bones interiors and store signs.
Compared with rivals which have been busy cooperating with credit card issuers, Pxmart bucks the trend and only accepts cash.
Tsai said banks usually charge handling fees of between 3 percent and 5 percent for card transactions. One time, Pxmart's information section came back with exciting news, saying that some banks agreed to slash down the handling fee to only 1.8 percent.
Their sense of achievement was quickly deflated when Lin simply waved his hand, saying, "That's not a good idea. We'd just hand over every penny we earn to the banks."
This shows how minimal the gross margin is, said Richard Yang (楊瑞昌), special assistant to the chairman, adding that their products are on average 10 to 15 percent cheaper than those at hypermarkets.
Its growth has attracted rivals' attention. In August, the nation's largest hypermarket chain Carrefour for the first time claimed that it will challenge Pxmart after it has 80 mega-sized stores in operation by 2010.
Carrefour spokesman Allan Tien (田中玉) said that by that time, the retail giant will start opening smaller stores right next to Pxmart's for cut-throat rivalry.
Faced with Carrefour's confrontation, Lin said they are not afraid of competition as each retailer has its own prowess.
"We provide the lowest prices anytime, quality products and convenience. Taiwan's hypermarkets and supermarkets all have foreign capital behind them. People should support rarities like us, a 100-percent Taiwanese company," Lin said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”