Taiwan is a developed country with China as their main trading partner, followed by the United States, the European Union, and Japan. Taiwan has a total GDP of 23.6 trillion New Taiwan dollars or 805.4 billion U.S. dollars (in current prices) as of 2023, with GDP growth forecasted to grow 3.1 percent in 2024. Taiwan is the 21st largest economy in the world, with franchises playing an important role in economic growth.
Taiwan’s market trends indicate that the franchise industry is well known for its high concentration of franchises in dining, shopping, health, technology, and education.
Chain stores and franchises represent 48% of the turnover of the retail and food sector, with the distribution network being made up mostly with stores and shopping centers. In 2022, Taiwan Chain Stores and Franchise Association (TCFA) indicated that the number of stores increased 2.9%, which includes 64,724 franchise stores that have demonstrated an annual growth rate of 5.8%.
With the food and beverage franchise market being highly saturated and extremely competitive, well-known international brands complicate the franchising process for foreign firms with limited brand recognition in Taiwan. Taiwan consumers enjoy high-end brand names and exciting new products that become present in the market. Another challenge for less competitive foreign firms is high real estate prices–eg., in Taipei–which can be challenging when negotiating rent prices and lease terms with Taiwanese landlords.
Factors of market entry need to be taken into consideration for a foreign company to have a smooth transition into the Taiwanese franchise market.
Due to the franchise market in Taiwan being mostly competitive food and beverage companies, foreign firms must be well-positioned to stand a chance against potential competitors. The period of recovery from the COVID-19 outbreak has caused Taiwan investors to adopt a more conservative attitude toward new foreign franchises.
To successfully introduce a franchise in Taiwan, the foreign franchises should provide support to their Taiwanese partners through implementation of best business practices, systems integration, customer service training, and quality assurance protocols. The Taiwanese market industry is centralized not only around food and beverages, but also advanced technology and health products.
MBE offers a variety of solutions through services, which provides the opportunity to contribute to Taiwan’s innovation of the best business practices. Taiwanese companies oriented around technology and pharmaceuticals will benefit through high quality customer service that intend to grant the needs of the people we serve.
(Photo: Unsplash)
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