The eCommerce market in Taiwan has grown at a rapid pace over the past few years, with it a need for a reliable pack & ship logistic partner.
Possessing the world’s largest regional economy, Asia has proven to be one of the most desirable locations for business and growth in recent years. Home to nearly sixty percent of the world’s population, Asia has grown to become a leader in innovative technology, along with having huge geographical market potential and intense entrepreneurial drive. Conducting business in Asia is becoming increasingly more efficient due to how friendly it caters to foreign business opportunities, and some countries have been experiencing exponential growth in GDP that is expected to continue to grow.
Taiwan has grown to be one of the strongest business hubs not only in Asia, but across the entire world. With its encouraging economic environment, Taiwan has reached a mature stage of development which houses non-volatile inflation, a stable manufacturing supply chain, and rule of law. These progressions have created an unmatched information technology industry that has led to accolades in innovation, such as ranking first in Asia GEDI Institute’s Global Entrepreneurship Index (2017), as well as ranking 15th out of the World Bank's Ease of Doing Business Rankings (2020). Taiwan’s industrial growth and stability can be attributed to its large number of SMEs which have increased to nearly 1.5 million, accounting for over 80% of the service industry. These important economic factors have created a strong foundation and potential for franchising opportunities.
An industry that has experienced a massive surge of growth in recent years is e-commerce, particularly in the last two to three years due to the COVID-19 pandemic. Taiwan’s technologically innovative society is a catalyst for its growth into the e-commerce market; its well-developed distribution services and high rate of smartphone penetration are the main driving factors of this high rate of growth. The 3-year compound growth rate for 2018-2020 in the e-retail market in Taiwan was 32%, and consumers across all industries have been showing a marked increase in online shopping. During the period 2022-2027, the Taiwan e-commerce market is expected to reach a compound annual growth rate of 9.6%, leaving plenty of room for new competitors to enter the market and much incentive for companies to develop an e-commerce presence if they haven’t already.
A major contributing factor to the growth of e-commerce is the growing prevalence of mobile shopping apps, which are increasing rapidly for many major e-commerce companies. Taiwanese consumers predominantly use Shopee Pte. Ltd, PChome Online, Momo.com Inc., and Ruten, all of which get between 55 million and 30 million page views per month. Momo.com Inc.’s revenue grew 30% during 2020 alone to NT $67.2 billion (US $2.1 billion). The company recorded record revenue at their annual Double 12 (Dec. 12) event of NT $6.5 million (US $210,000), an increase of 36% from the previous year’s event. Similarly, PChome declared a 12.8% increase in revenue between 2019 and 2020, likely due to the exponential increase of downloads and new users. The company’s mobile app was downloaded over 5 million times last year, with new users growing 50% annually. These figures are expected to continue to grow, especially as the mobile connection penetration rate in Taiwan is close to 120%.
The COVID-19 pandemic also helped further propel e-commerce into peoples’ everyday lives, as physical consumption was transferred online and physical storefronts were forced to expand into e-commerce to stay afloat. According to the Ministry of Finance, there were around 700 brick-and-mortar department stores in Taiwan in 2020, compared with over 1,000 stores in 2010. However, although the presence of physical storefronts is decreasing, consumers are purchasing more than ever. According to the Ministry of Economic Affairs, retail sales in Taiwan hit an all-time record of NT $3,862 billion (US $136 billion) in 2020, rising 0.2% from the year prior. Of this, NT $341.8 billion was related to online sales, rising 19% from the year prior. For the same period online retail sales constituted 8.9% of retail sales in the country, which is a 1.4% rise from 2019. As technological innovation in the industry continues to grow and concerns about health and safety in the wake of the COVID-19 pandemic linger, the percentage of online sales compared to total sales across all industries is predicted to only continue to rise.
Taiwan’s booming e-commerce industry gives rise to the growth and need for another industry: pack and ship logistics. As companies are sure to become overwhelmed by the expanding volume of online sales, third-party services are becoming more important than ever to facilitate prompt and reliable delivery of all types of goods to consumers around the world. It is clear that Taiwan sets an economic foundation viable for franchising and business opportunities as a whole, making MBE’s Master License opportunity an attractive investment for the future. Taiwan’s economic growth and stability along with its consumers’ investment in e-commerce presents a valuable opportunity that deserves consideration.
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