Convenience stores in Taiwan are a source of wonder for foreign visitors and are also what Taiwanese people miss when they go abroad, reported Taiwan Panorama monthly. As of this May, there were 9,255 convenience stores in Taiwan, or one store per 2,500 people, the highest number per capita anywhere in the world. In Taipei, it is easy to see two 7-Elevens across the street from each other or several of them within a few hundred meters.
According to a survey by Nielsen Taiwan earlier this year, the average consumer in Taiwan visits a convenience store 17 times a month, roughly once every two days. This is a 30 percent increase over the same period last year.
From mom and pop-stores to 7-Elevens
Open 24/7 and scattered throughout the island, convenience stores have become an indispensable part of everyday life in Taiwan. From snacks to quick meals, to condoms to white funeral envelopes, convenience stores stock all the essentials of modern life. National Taiwan University’s sociology professor Tseng Yen-fen said, “They are mirrors, reflecting the intense work ethic” of the Taiwanese people. Taiwanese people are impatient and they hate to wait. Because time is a precious resource, convenience stores can be seen as a “revolution in time,” she said.
In earlier days, “mom and pop” grocery stores served the needs of most Taiwanese, but in 1979, President Corp. started building the 7-Eleven brand in Taiwan. Due to geographic differences and the high population density, the development of convenience stores in Taiwan followed the Japanese route rather than mimicking the US pattern. Universally, they sold drinks, junk food, newspapers, instant noodles, cigarettes, and so on. But in 1995, Taiwan’s 7-Eleven stores changed this strategy by selling the ever-popular glutinous rice rolls.
Seven-Eleven’s success eventually attracted competition, with Japan’s Family Mart arriving on the island in 1988. Although it has not managed to unseat 7-Eleven, Family Mart is now the number two convenience store chain in Taiwan.
Following the Asian model
Family Mart also brought in baking and bill payment services. As early as 1998, Family Mart led the way in taking bill payments. Since then, the expanded service includes allowing customers to pay their utilities (water, electricity, phone bills), as well as parking, school tuition fees, taxes, insurance, and credit card bills.
According to Family Mart’s public relations manager Esther Lin, Family Mart’s 2485 stores accept payments for over 100 million bills every year, which includes a transaction fee of NT$2-15 (US$0.06-0.47). This high–volume, low-margin business has not only increased revenue for the company, but has also increased the customer turnover as people pay their bills each month.
Convenience stores have further extended the services they offer by accepting and receiving packages and express mail. The dense network of convenience stores has stimulated the rapid movement of goods, and the entire spatial sense in Taiwan has been altered. Since 1999, convenience stores have also started offering catalog purchases and direct-mail order services. Items for sale include New Year’s specialty foods, Mother’s Day cakes, cosmetics and travel packages. Customers can shop online, and go to a store to pay and pick up their orders.
New services in a competitive market
In 2004, the number three chain in Taiwan, Hi-Life, introduced their “Life ET” multimedia kiosk (MMK). Using a touch-sensitive computer screen, consumers have access to even more commercial choices, further expanding the reach of the convenience store market.
In speaking to Taiwan Panorama magazine, Hi-Life marketing director Zhao Kun-ren said the MMK platform was originally created in Japan to sell show tickets. Adapting to local needs, Hi-Life added new functions that allow customers to use credit card bonus points to purchase store products, print out bills and pay them on the spot, and also download ring tones.
In 2006, 7-Eleven and Family Mart followed suit, installing their “ibon” and “FamiPort” devices with functions similar to those in Hi-Life. With FamiPort, customers can buy high speed rail tickets. This innovation has turned these small shops into transportation sales outlets as well.
Finding the specific niches
Convenience stores have set off one consumer frenzy after another. Currently, the latest craze is serving freshly brewed coffee to customers. After several failed attempts, 7-Eleven came out with the low price “City Café” in 2004. With successful commercial ads in 2007, 7-Eleven has been selling 30 million cups of coffee a year. Now 7-Eleven’s parent company also owns Starbucks in Taiwan.
In 2008, Family Mart and Hi-Life announced they would jump in on the fresh-brewed coffee bandwagon. Family Mart has now partnered with Mr. Brown Coffee while Hi-Life is aligned with the Kuang Chuan Dairy Co. Struggling against its two big rivals, Hi-Life came up with a range of baked goods, ready-made breakfast items and simple meals also.
Copying a model used in Hong Kong 7-Eleven stores, Taiwan 7-Eleven in 2005 began a convenience-store-centric promotional activity, whereby if you spend NT$77.00 (US$2.40) in any one visit, you would get a Hello Kitty magnet. This idea quickly became a nationwide craze which has yet to fade, according to Hsu An-chi, an associated professor of public relations and advertising at Shih Hsin University.
The magazine said the appetite for trinkets was also whetted by giving them away in packages that hid what was inside, so customers had the added element of entering into a lucky dip. This also enticed customers with a love of collecting, who would stop at nothing to collect a whole set and were spurred on to make purchases in order to find that sought-after piece.
Family Mart said their pockets are not as deep as their rival 7-Eleven, and thus cannot afford to acquire the rights to major international animated characters, so they tried to embrace home-grown culture by offering cute figurines of traditional deities.
Professor Tseng observed that convenience stores testify to the complexity of the feeling created by many city spaces: they are there but hardly ever thought about, substitutable but indispensable. Typically less than 100 square meters (1075 square feet) in size, offer both a “sense of flow” and a “sense of place.” They allow people hurrying through their day to shop, take care of errands, and go, while they also welcome customers who want to pause a while. Convenience stores are really convenient, and rightly deserving of their name.