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PChome set to build three new storage facilities

PC RECOVERY?The Web firm said PC sales were on the rise and expected the trend to continue after Microsoft ends support for Windows XP shortly

By Helen Ku  /  Staff reporter

Online shopping portal PChome (網絡家庭) yesterday said it plans to set up three warehouses in two years as consumer demand for non-PC products increases.

The company started operation of its fourth warehouse, in New Taipei City’s Wugu District (五股) on Jan. 1, and plans to launch its fifth warehouse during the first half of next year, PChome’s sales division manager Vicky Tseng (曾薰儀) told an investors’ conference.

The new warehouse will focus particularly on non-PC products, such as fans and breadmakers, as well as food products including rice, noodles and soy sauce, Tseng said.

NON-PC DEMAND

“Demand for non-PC products is growing at a faster-than-expected pace,” she said. “Our financial report showed that consumers are placing more orders for non-PC products — rather than desktops, notebooks or displays — which attract buyers with lower prices online,” Tseng said.

“This change indicates either weakening market demand for PCs or changes to the purchasing behavior of customers,” she added.

Of the company’s total sales of NT$16.3 billion (US$538.25 million) last year, sales of non-PC products accounted for about 70 percent, according to the company’s financial report.

While the personal computer industry is likely to remain sluggish this year, Tseng said PChome has seen its sales of PC products grow by more than 20 percent month-on-month since November last year.

SALES MOMENTUM

“Taiwan’s PC market is gaining new sales momentum,” Tseng said. “At least, we have seen PC sales increase significantly in the past few months.”

For the whole of last year, PChome’s sales of various PC-related products grew by 1 to 3 percent from the previous year, but the growth is estimated to reach more than 5 percent this year because of the potential replacement demand for PCs, Tseng said.

END OF XP

The replacement demand comes at a time when Microsoft Corp is set to end its support for machines running the Window XP operating system later this month.

Because of new investments on equipment and warehouses, PChome’s operating income would slide from NT$663 million last year, Tseng said, citing the company’s plans to spend about NT$30 million to NT$50 million on setting up or renting each warehouse.

Tseng said sales would increase on a quarterly basis this year as the company aims to shorten its product delivery time in Taipei to less than six hours from 24 hours currently.

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