PChomestore Inc (商店街) expects to return to profit next year as a war of attrition with rival Shopee Taiwan Co (樂購蝦皮) has begun to subside.
The dust is finally settling following a year of fierce battles between the two companies, whose profitability has been strained by massive spending to fund their respective free shipping policies as they vie to capture market share.
At the beginning of this month, the company raised the minimum purchase for free shipping to NT$99 (US$3.39) as Shopee eased off its aggressive subsidies program, PChomestore general manager Su Yun (蘇芸) told a news conference in Taipei.
“That gives us room to cut marketing and promotional spending on our end,” she said, adding that the hike has not deterred customers.
“Our customers found the change reasonable and have said that the new free shipping threshold would help in combating abuse and waste,” Su said.
PChomestore’s shipping rates are still lower than those of Shopee and other rivals, she added.
The company expects to see its spending continue to fall as its customer base expands, Su said.
To create new revenue streams, the company is set to roll out an advertising system on its shopping platform next quarter — a feature that has been requested by vendors, she added.
The company, a subsidiary of PChome Online Inc (網路家庭), is developing big data insights on trends in demand as a new service that could be purchased by sellers.
However, Su said the company is still focused on growth and its marketing spending would only be slightly lower than the NT$1 billion it spent last year.
Apart from shipping subsidies, providing online coupons as small as NT$20 has proven to be effective in stimulating purchases, she said.
A new feature to let customers send pictures on the platform’s messaging service would help in reducing disputes in consumer-to-consumer transactions, she said.
After posting a net loss of NT$1.11 billion last year, the company is planning a capital increase in the third quarter to bolster its war chest, pending approval by its board of directors, Su said.
“A larger market share would bring a larger revenue stream as we begin to introduce new charges, such as transaction fees,” Su said, adding that the timing would depend on moves by its competitors.
PChomestore shares yesterday gained 0.32 percent to NT$47.60 on the Taipei Exchange, outperforming the over-the-counter index’s decline of 1.87 percent.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to