Hon Hai Group (鴻海集團) yesterday said it is planning to shut stores owned by its electronics retail unit CyberMart (賽博數碼) in Taiwan in as part of its strategic shift to a virtual business model.
The statement came after consumer electronics product retailer Media Markt China (萬得城) — in which Hon Hai owns a minor stake — said last month that it would close down its operations in China by the end of this month, citing stiff competition and a larger-than-expected investment to reach economies of scale.
The plan to streamline CyberMart is part of Hon Hai’s revamping of its brick-and-mortar electronics retailing business, Simon Hsin (邢志平), spokesman of the group’s flagship Hon Hai Precision Industry Co Ltd (鴻海精密), said in a filing to the Taiwan Stock Exchange yesterday.
Hon Hai will refocus on building its online shopping business, and the group still aims to be the world’s biggest manufacturing and retailing platform for global brands, he said.
“In principle, we are moving to close all of the [CyberMart] stores,” Hon Hai spokesperson Laura Liu (劉冠吟) said by telephone.
That was a U-turn from the company’s aim to increase the number of its outlets from six in Taipei, New Taipei City (新北市) and Taoyuan County, to 30 nationwide.
“We are undertaking first-stage preparatory work,” Liu said.
CyberMart has stopped placing orders and is in talks with suppliers to cancel earlier orders, Liu said.
No timetable has been set for the closures, she said.
Liu denied a Chinese-language Commercial Times story yesterday, which said that CyberMart had defaulted on payments to suppliers.
She said CyberMart only temporarily held back payments in February when it was analyzing the feasibility of closing down its stores. All payments were made soon afterward, she said.
“We only held back the payments to suppliers briefly when we were considering closing the stores in February, but we made the payments soon after that,” she said.