The franchise and chain store sector needs to be more international if it wants to compete with that of China, a senior trade official said yesterday.
The nation has a high density of franchise and chain stores, and is a big employer. This is what gives the sector its biggest competitive advantage over its Chinese rivals, Taiwan External Trade Development Council (TAITRA, 貿協) president and CEO Chao Yung-chuan (趙永全) said at the 2012 Taipei International Franchise Summit Forum, a one-day event co-organized by TAITRA and the Association of Chain and Franchise Promotion.
However, local chains lack the brand loyalty and momentum to globalize, while management at such firms leaves much to be desired, Chao said.
There are more than 1,000 franchise corporations in Taiwan, with up to 120,000 company-owned and franchise chain stores and 1.2 million people involved in the industry, Chao said.
The sector posted NT$2 trillion (US$67.6 billion) in sales revenue last year, up from NT$1.2 trillion in 2004 and accounting for half of the country’s overall retail sales, Chao added.
Vice Minister of Economic Affairs Francis Liang (梁國新) told the forum that the franchise and chain industry was critical to Taiwan, where half of the retail and food industries operate on this model.
Local franchise brands Din Tai Fung (鼎泰豐) and Wang Steak (王品台塑牛排), which have 17 and 44 branches respectively in China, have transformed themselves from traditional retail businesses into successful brands that have both local characteristics and originality, Liang added.