The nation's tight retail market is set to get even tighter with the entry of British hypermart chain TESCO.
The company announced yesterday that it would open its first 10,000m2 store in December at Taiwan's first-ever shopping mall, TaiMall in Nankang, Taoyuan County. TESCO will take over the site currently occupied by local whole-saler Makro, keeping all 150 staff and adding another 250.
But while Taiwan's retail scene is already crowded with names ranging from 7-Eleven and Wellcome to Sogo and Carrefour, TESCO Taiwan CEO David Orchard-Smith is confident that the UK brand can bring something new to the market.
"The market in Taiwan is underdeveloped," Orchard-Smith said. "The concept of customer service as TESCO knows it, is not seen in Taiwan."
The move into Taiwan by Britain's largest food retailer has been at least three years in the making, with Orchard-Smith himself already having spent a year in Taiwan doing market research and a further two years scouting for property.
According to Orchard-Smith, the average TESCO store site covers around 9,000m2, with the sales area covering around 6,500 to 7,500m2. That means a lot of products and a large variety.
"It's about time [Taiwan] hypermarts took a step forward into the 21st century," Orchard-Smith said.
Pushing the company's key strength in customer service and store design, Orchard-Smith is critical of the current retail environment, pointing to crowded, dark and dirty stores as typifying the Taiwan shopping experience.
Instead, TESCO says it plans to offer quality and variety with an emphasis on customer service and clean and bright store design.
And according to Orchard-Smith, there are few differences between Taiwanese consumers and their UK counterparts.
"Customers want the same thing everywhere," he said. "They want quality, value, cleanliness and customer service."
Alluding to the likelihood that TESCO will be more expensive than its Taiwanese counterparts, he claimed that research points to price as being far down the list of priorities for customers.
The typical TESCO store will stock everything from fruit and vegetables, to groceries to sports equipment and clothing.
The company predicts that locally, 80 percent of its product line will be sourced from Taiwan, while worldwide TESCO-branded products account for 40 percent of goods at TESCO stores.
While Taiwan is likely to be a lucrative market for the UK chain, it is not the company's first port of call in the Asian region. In 1998, the company moved into Thailand by taking over 13 stores from local retailer Lotus, since expanding to 24 stores throughout the country.
In addition, TESCO has three stores in South Korea and is actively pursuing opportunities in China and Malaysia.
RSS