UK-based Tesco Stores Co Taiwan (特易購) will open a 24-hour hypermart in Chungli, despite strong pressure from four French stores in the neighborhood.
The company said the large Chungli consumer base and the abundance of commercial land that is available fueled the decision.
Over the last five years, four hypermarts -- two Carrefour Corp Taiwan (家樂福) stores and two RT-Mart (大潤發) outlets -- have set up shop in this area, 40km south of central Taipei.
Opening on Nov. 30, Tesco will be the fifth store in a 5km radius.
In mid-December Carrefour is scheduled to set up its third outlet in Chungli.
"By the end of the year, a total of six hypermarts will exist within a 5km radius ? competition there is estimated to be very severe," said Eric Tseng (曾台川), general manager of Tesco's new Chungli store.
Tseng estimated that his store's first-year sales will reach NT$2 billion.
Tesco entered the Taiwan market in 2000 and currently has outlets in Taoyuan and Tainan.
The company will offer 24-hour service in its yet-to-be-opened Chungli store, making it the only hypermart in Taiwan to stay open around the clock.
The large and affluent population of an area that is also the home to seven colleges, makes Chungli a retailing hotspot.
"There are over 320,000 residents in Chungli City and another 200,000 college students and employees in the Chungli Industrial District. These are all our potential customers," Tseng said.
Students and a large group of foreign workers in the district prefer to shop in hypermarts for discount prices, he explained.
Another industry professional said space is also very important.
"Although the buying power of many areas in northern Taiwan is very strong -- for instance Taipei County -- it's very difficult to find large tracts of land to build on [in such areas]," said Lilian Lee (林莉莉), marketing manager at Carrefour Taiwan.
Rezoning efforts in the area has made commercial land acquisition much easier than in other areas, she added.
Carrefour is currently the nation's largest hypermart, with 27 stores in Taiwan.
Analysts say that, after the two new stores open in Chungli, the area's retail grocer market will be saturated.
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