Mon, Sep 17, 2007 page12

• Competition for moon cake sales intensifies

  • By Yang Ya-min / STAFF REPORTER
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  As prices rise and consumer spending decreases, competition in the market for Mid-Autumn Festival moon cakes has intensified.

  According to industry statistics, Mid-Autumn Festival is one of the nation's three biggest holidays, and as many as 90 percent of the general public give gifts at this time. Moon cakes make up the largest part of these gifts, with total sales reaching between NT$2 billion (US$60.5 million) and NT$3 billion.

  Pastry vendors said they can see the emergence of an M-shaped consumer market, where the market for expensive wine and tea leaf gift sets at the top of the pyramid remains relatively unaffected, while the market for moderately priced moon cakes at the base is directly affected since consumers may decide not to give gifts when times are hard.

  

  A woman holds up a moon cake last week. The slow economy has led to intense competition in the market for moon cakes which are traditionally eaten on Mid-Autumn Festival. This year's festival falls on Sep. 25.

  PHOTO: FANG PIN-CHAO, TAIPEI TIME

  Another reason for a shrinking moon cake market is that there are now many other kinds of gift sets on the market, and consumers may instead choose to buy fruit or other kinds of gifts rather than moon cakes, they said.

  But regardless of the slow economy, business must go on. The companies competing for the main part of the moon cake market -- company orders -- have had to resort to a price war to get customers.

  According to Kuo Yuan Ye Foods (郭元益食品) pastry vendors aiming for large corporate orders have sometimes slashed their prices substantially, giving discounts of as much as 72 percent, but that has only occurred in the days just before Mid-Autumn Festival.

  This year, however, the company has seen competitors give the same discount at the beginning of the moon cake season. The result has been that the moon cake retail business still hasn't picked up, even though Mid-Autumn Festival is a little more than a week away.

  wide range

  To boost orders, Kuo Yuan Ye is offering moon cake boxes ranging in price from NT$200 to NT$1,600 in an attempt to cater to a wider range of companies. The company estimates that it will be able to maintain last year's order volume, with group purchases making up 65 percent of total sales volume.

  Chen Hsi-yi (陳錫宜), a manager in the marketing department at Hun Ya Foods Co (宏亞食品), said the the number of moon cake orders received by the company so far show that many companies have cut down on their budget, while a few successful IT companies have maintained and even increased their budgets.

  Their biggest order exceeded 10,000 boxes

  The company is flexible and tailors its orders to meet the demands of companies with differing budget requirements, all in order to get a larger share of the group order market, he said.

  Expensive moon cakes sold out earlier than normal and the company is now only accepting orders for boxes in the mid-price range between NT$400 and NT$500. The company expects orders to remain at the same level as last year.

  Deputy General Manager Huang Chin-fa (黃進發) at Isabelle Taiwan Co (伊莎貝爾食品), a maker of mooncakes and wedding cookies, said that Isabelle has prepared for the M-shaped market this year by catering to both extravagant and moderate tastes and offering moon cake boxes in a range of prices from NT$200 up to NT$1,800.

  The company's new flagship store has slashed prices by as much as 50 percent on some products and bargain-hunting customers have flocked to the store.

  discounts

  Adahesong Taiwan Salico Enterprise Co (大黑松小倆口) General Manager Chiu Yi-jung (邱義榮) said that although the prices on the company's price list have gone up, the sales force has found that consumers are reluctant to pay them. They have therefore been disinclined to charge the higher prices, instead giving discounts of up to 50 percent.

  Chiu said the company had planned to advertise their moon cakes in the media and had made large banners to hang outside their outlets, but later reversed their decision. The company stopped taking orders on Sep. 10 and will be happy if they manage to clear their inventory. Instead, they will focus on the company's mainstay, the market for wedding cakes.

  Ganso (元祖食品), which made its name selling ice cream cakes, is managed Chang Shao-wei (張劭緯). Chang said Ganso this year is offering a moon cake gift voucher valid in both Taiwan and China, the only company to do so.

  This means that a customer can buy a gift voucher in Taiwan and exchange it for products in one of Ganso's 280 shops around China. The company is hopeful it will be able to meet its target of 250,000 gift boxes.

  Representatives of Kaohsiung-based Jiu Zhen Nan (舊振南餅店) said it sold 600,000 gift boxes of its popular green bean cakes and 30,000 boxes of moon cakes for Mid-Autumn Festival last year.

  Due to rising oil and flour prices this year, the company has decided to raise the price of each green bean cake by NT$5, but still expects overall sales to remain at the same level as last year.

  Moon cakes from other up-market companies such as Kee Wah Bakery (奇華餅家) remained positive on this year's sales as the bakery said its clientele consists mainly of regular customers.

  This year, the company has expanded its network of distributors and it is also cooperating with President Chain Store Corp (統一超商) and Shinkong Mitsukoshi Department Store (新光三越) to sell Pili Puppet, jade cabbage and River During Qingming Festival moon cakes in an attempt to expand their customer base and improve sales.
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