Tsann Kuen 3C (
Yesterday morning, Tsann Kuen 3C offered four models of Acer-brand desktop computers with price cuts up to 30 percent or NT$6,000 each.
The price for an Acer Power SV desktop computer (2.6 gigabyte with DVD driver), for example, was lowered to NT$16,888 from the original NT$23,200, according to the company.
The price cuts by Tsann Kuen surprised Acer and rival channel operators including E-Life Mall Co (全國電子) and Tomorrow World Computer Ltd (明日世界電腦), who criticized what they called "unethical and unacceptable" predatory pricing.
Acer, Taiwan's largest desktop computer-maker, said on Wednesday that its subsidiary E-Life Mall sold 1,340 Acer Desktop PCs last month, surpassing Tsann Kuen to become Acer's No. 1 retailer.
Tsann Kuen decided to fight back, putting Acer in a difficult position.
"As a computer vendor, Acer should remain neutral on the retailers' sales issue," Tsann Kuen spokesperson Eileen Shou (
"But the fact is that Acer favors its subsidiary and doesn't treat all of its distributors equally. Therefore, we decided to slash prices on Acer's [desktop] computers," she said.
Acer formed an alliance with E-Life Mall three years ago and currently owns 30 percent of the retailer's shares. E-Life has 222 stores across the nation.
Tsann Kuen sold more than 350 Acer desktop PCs nationwide in the course of a two-hour period yesterday morning, Shou said. Between January and last month, Tsann Kuen sold 40,000 Acer desktop PCs, accounting for 15 percent of the retailer's total desktop computer sales.
Rival distributors also criticized Tsann Kuen's discounted price.
"The prices Tsann Kuen announced are NT$2,000 lower than Acer's [wholesale] price," said Thomas Huang, (黃耀明), president of Tomorrow World, which operates 52 outlets. "The practice has squeezed other retailers' profit margins to an unacceptable level."
Yesterday, Acer issued a statement saying the company has done nothing to damage its relationship with any retailer, including Tsann Kuen.
"Acer places a high degree of importance on its relations with retailers and always follows its guidelines of treating all of its partners equally," said Henry Wang (
"We don't intend to ruin our relationship with Tsann Kuen, while at the same time we don't want their marketing activities to ruin Acer's brand-image either," he added.
Acer is Taiwan's number one desktop computer brand, controlling nearly 40 percent of the desktop computer sector. The company yesterday said last month's sales rose 107 percent from a year earlier to NT$6.7 billion, from NT$3.2 billion.
Responding to the outcry, late yesterday afternoon Tsann Kuen decided to halt the discounted pricing.
"We sold out of the remaining 1,000 units of discounted Acer items today, and there will be no more special offers on Acer products," Shou said.
But the retailer decided to continue its price war using other products.
"We are currently negotiating with other local computer makers about offering bargains," Shou added.
Prices are expected to fall around the same level as Acer's special items or as low as NT$13,000 for each desktop PC.
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