President aims for 7net to break even

By Amy Su  /  Staff reporter

Mon, Jul 15, 2013 - Page 13

President Chain Store Corp (統一超商), which operates the nation’s largest convenience store chain, 7-Eleven, aims to see its online shopping portal 7net break even this year by leveraging the integrated resources of the retail conglomerate Uni-President Group (統一集團).

That goal has been spurring the company to accelerate its pace of introducing new exclusive brands, and bringing more users to 7net this year.

“Instead of targeting a higher market share, we care more about developing a business model with higher profitability for 7net,” Liu Hong-cheng (劉鴻徵), the head of 7net, told a media briefing last week.

7net, which has 1.6 million registered users, may not see its business scale surpass its competitors PChome Online Inc (網路家庭) or Yahoo Taiwan’s online shopping portal in the near term.

However, Liu said 7net is working at its own pace to generate profits.

Running more than 4,800 convenience stores nationwide, President Chain allows consumers shopping on 7net to take delivery of products at its 7-Eleven stores, making 7net an online department store with nearly 5,000 branches around the corner from almost every household, Liu said.

In terms of product identity, Liu said the strong resources provided by President Chain and Uni-President group have also made 7net distinctive.

Standing as a retail giant with scores of affiliates in the sector, President Chain and Uni-President group have offered 7net various cooperation opportunities, both with internal affiliates and other companies.

Last week, 7net announced it would launch sales of products from Co Ltd (台灣無印良品), a Japanese lifestyle brand operated by PCSC in Taiwan, offering about 7,000 new products on the online shopping portal.

The cooperation may help raise sales of 7net by 30 percent per year and lead revenue contributed by online shopping platforms to account for 10 percent of overall sales of by the end of next year, from the current 5 percent.

Liu said offering exclusive products will be a major strategy for 7net over the near future, with other brands and affiliates operated by President Chain expected to be put on the shelves gradually.

In addition to internal cooperation, 7net started teaming up with Hon Hai Precision Industry Co Ltd (鴻海精密) last month to tap into the nation’s TV market, which is also expected to drive up sales of 7net by 30 percent per year.

Hon Hai has started to manufacture three models of Internet TV for President Chain, under the brand of the convenience store chain’s cartoon mascot, Open, with about 3,000 Internet-enabled TVs sold in the first three days of sales through 7-Eleven outlets and 7net.

Although sales via 7net currently only account for about 1 percent of President Chain’s overall revenue, the convenience store giant said it would not ignore the rise in the nation’s online shopping market, which has showed more than 20 percent annual growth over the past few years.

Targeting the break-even point by the end of this year, Liu said the strategy of inter-industry cooperation would help 7net play a more important role in President Chain, which posted NT$134.57 billion (US$4.5 billion) in sales, with NT$6.79 billion in net profits, for last year.