Taiwan FamilyMart Co (全家便利商店), the nation’s second-largest convenience store chain, is expected to benefit from a rewards point system it has set up in conjunction with smart card system operator EasyCard Corp (悠遊卡), financial services firm Morgan Stanley has said.
Taipei-based Morgan Stanley analyst Terrence Cheng said that EasyCard compatibility is likely to help boost consumer “stickiness” and the volume of small payments at the convenience store chain’s outlets seeing as EasyCard has issued more than 47 million prepaid cards that are already widely used for public transportation.
“We expect FamilyMart to benefit from its collaboration with EasyCard on a bonus point platform that will likely generate more traffic to FamilyMart stores as customers look to accumulate and redeem the reward points,” Cheng wrote in a research note last week.
FamilyMart and EasyCard teamed up earlier this year to develop the system to encourage shoppers to earn points they can then used at FamilyMart outlets and which also makes paying bills at the one-stop shops more convenient.
Cheng said that he is optimistic about FamilyMart improving the execution of its marketing strategy, evidenced by its 5 to 6 percent growth in same-store sales in the first half of the year, compared with the about 1 percent recorded by market leader President Chain Store Corp (統一超商), which operates 7-Eleven stores in the country.
FamilyMart’s development plans for China also serve as “a long-term bright spot,” given the chain’s well-established image and ambition for expansion, Cheng said.
The analyst gave an “overweight” rating to the stock and set a target price of NT$250.
In contrast, Cheng said President Chain Store’s stock was rated “underweight” with a NT$195 target price due to the comparatively more limited user base of its in-house iCash prepaid cards,
FamilyMart shares fell 0.24 percent to close at NT$208 in Taipei trading yesterday, while President Chain shares ended unchanged at NT$223.5.
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