Refusing to be trapped in an endless price war, two small consumer-electronics and home-appliance retailers are fine-tuning their marketing strategies to lure customers with a trendy shopping environment and premium services, company executives said yesterday.
"Competition is not just about price," said Peter Dove, managing director of Fortress, Hong Kong's largest personal electronics and appliances operator. He is visiting Taiwan to celebrate the opening of Fortress Taiwan's 10th outlet in Taipei today.
Over the past few months, bigger rivals Tsann Kuen Group (
Instead of following suit and eroding its gross margins, Fortress is sticking to its principle of offering "value for money" service, Dove said.
Since the retailer introduced its new "concept store" decor in January last year with the aim of offering a comfortable shopping experience and meeting a growing demand from sophisticated consumers, revenues in these stores grew 12 percent, Dove said.
He refused to disclose detailed sales figures.
Despite being a small latecomer in the competitive market, Dove expressed optimism about Fortress' flexibility in addressing shopper needs and adjusting the company's business models in accordance with contemporary lifestyles.
To tap into what Dove described as a lucrative market here, Fortress has mapped out the most aggressive strategy since its entry in 1998, hoping to expand to 30 outlets by the end of the year with a NT$150 million (US$5 million) investment in store expansion.
Across the Taiwan Strait, the retailer also expects to open its first outlet in southern China this year. Joseph Lo (
Fortress is not alone in offering top service to escape the tug of war to offer lower prices. UNC (
UNC's new general manager Liu Ming-jui (劉明瑞), who formally took over yesterday, said the retailer will sell state-of-the-art products with higher gross margins, embark on a course of store renovations and close poorly-performing outlets.
"We want to become the first retailer in Taiwan to showcase the newest products, like Japanese refrigerators equipped with special functions. Every time when consumers want the latest appliances, they'll come visit our outlets," he said.
"Also, to control costs and boost business efficiency, our stores will have only one floor, with the size between 80 and 100 ping [264m2 and 330m2]," said Liu, who formerly served as vice general manager of Tomorrow World Computer Chain Store (明日世界電腦).
While market speculation is rife about a possible merger with Tomorrow World Computer, Liu said his priority is to reform UNC before considering the possibility of such a merger.
However, the companies will start cooperating on joint purchases and form a strategic alliance to save costs and complement each other's business operations, he added.
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