“Everyone is talking about that NT$3,600,” says Ho Yu, a seller of Fujitsu laptops at one of the hundred-odd cubbyholes at Kuanghua Digital Plaza, which is perhaps Taipei’s oldest electronics bazaar. “Lots of shoppers try out the laptops, then leave saying they’ll be back when they get the shopping voucher.”
The NT$82.9 billion economic stimulus is well-timed. The Lunar holiday is peak sales season, and the recession is curtailing consumer spending. Yet, even without the extra cash, Taiwan’s 22.6 million people remain true to their 3C shopaholic behaviour.
This year, one in 10 consumers bought a computer (1.5 million PCs and one million portables), according to IDC Taiwan. Equally astounding, in June, the Government’s IT think tank Market Intelligence Center (MIC) forecast sales of 7.2 million mobile phones and one million LCD-TVs, and those predictions remain close to the mark. Much of this bounty is sold by two 3C chain stores. E-life Mall Corp, with 292 locations, is skewed toward white goods and appliances, plus a mandatory aisle of PC basics; Tsann Kuen Enterprise, with 270 stores, stocks an obligatory rice cooker or two, but fills the rest of its shelves with bleeding-edge digital gear.
Both are major advertisers. “E-life Mall uses a lot of TV,” says Dickie Chang, analyst at IDC Taiwan. “The commercials tell a story. Usually a father and mother is talking about how hard they worked so their family could enjoy some wonderful appliance.”
Tsann Kuen tends to advertise in newspapers, and the message focuses on low price and special deals.
In the first 10 months of the year, Tsann Kuen spent NT$257million and E-life Mall another NT$234 million, earning third and fourth place among the island’s consumer electronics advertisers. Only telecoms spent more, with Chunghwa Telecom (NT$394 million) and Taiwan Mobile (NT$295 million) in first and second place.
As for electronics manufacturers themselves, leading spenders include the Japanese electronics giants Hitachi (NT$185million), Sony (NT$169 million) and Panasonic (NT$149 million), as well as local heroes Acer (NT$92 million) and Asus (NT$80 million).
Tsann Kuen and E-life Mall manage to outspend these tech titans partly because the retailers’ ad budgets are subsidised by the big brands. The 3C marketing world has other curiosities. IDC Taiwan’s Chang points out that, for computer vendors, participating in the Intel Inside program results in refunds of up to half of the computer makers’ advertising fees.
A good PR strategy is a big part of some brands’ strategies. “Magazines like PCDIY, PChome and PCOffice offer benchmark tests, and online there is even more. That is how buyers - especially young men - choose a machine,” says Oliver Wu, consultant at the Taipei Computer Association. “Brand is important, but sales leaders such as Acer and Asus don’t need to advertise much because there is so much information about them in the marketplace.”
A significant competitor to the big two retailers is Nova, launched in 1996 in Taipei, but now with a presence in four other east coast cities.
Nova acts as landlord to a hundred-odd booths run by independent operators. Sales volume is significant, and leans toward DIY buyers. Then there are Taiwan’s online platforms, dominated by Yahoo, Kimo and eBay/PCHome’s joint venture Ruten.com. Online sales grew 32.3 per cent to NT$243 million, with consumer-to-consumer sales taking NT$107.2 million, according to MIC. “People go online, compare prices, and find ways they can save,” says Jason Chiang, chairman of InsightXplorer. “More and more business-to- consumer vendors are starting up and volume should grow even as the economy worsens.”
Got a view?
E-mail feedback@media.asia
