President Chain Stores (
President Chain Stores -- parent company to the 7-Eleven chain -- devised the venture in the hopes of leveraging its existing infrastructure to deliver products ranging from books to mobile phones to customers throughout Taiwan within 24 hours, including outlying islands like Kinmen (
As Taiwan's largest convenience store operator, 7-Eleven has 2,517 outlets nationwide which serve an estimated 1,100 customers per day at each store, or 2.75 million people daily, according to the company.
7-Eleven spokesman Raymond Fu (
Customers will pay for their purchases in person when they go to pick them up.
The cyber sales platform is expected to be profitable for President Chain Stores as the group stands to charge each partner Web site twice under the e-commerce scheme, according to UBS Warburg analyst Shirley Chu.
"The e-commerce company will have to pay a fee to 7-Eleven for a percentage of each product sold," Chu said. The Web firms will also have to pay delivery fees to President Chain Store subsidiary Wisdom, which makes daily drop-offs at convenience stores around Taiwan and will take care of all e-commerce-related deliveries.
"Basically, these Internet e-commerce companies send over their customer orders to Wisdom, then Wisdom delivers the goods to 7-Elevens across Taiwan," Chu said. "Even without the extra Internet-ordered goods, Wisdom makes deliveries to 7-Eleven stores every day, so there's little extra cost to the company."
In exchange for the double bite by President, the partner sites gain access to the impressive 7-Eleven network and Taiwan's 6.4 million Internet users.
"The 7-Eleven pick-up model is much better than home delivery," said Jeff Coggshall, an analyst at ABN AMRO. "Home delivery is a much more expensive way to distribute goods."
Even United Postal Service (UPS, 美商優比速) marketing supervisor Wan Chien (錢莞) said the idea appeared to be a well-thought-out copy of the same e-commerce initiative started by 7-Eleven Japan late last year. She said the convenience stores would be a good place to pick up small items purchased online, but that the small storage areas would not be suitable for large items.
Although analysts praised President Chain Stores' e-commerce initiative as a strong move in the direction of Internet related business activities, Jardine Fleming analyst James Chung said the company's stock price would not feel an immediate impact.
"People already knew the company planned to go this way," Chung said, "so this won't have a big immediate impact. Overall though, we really like the company."
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