Taiwan Retail Sector - Growth, Trends, Covid-19 Impact, And Forecasts (2021 - 2026)

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It was the fastest growth in retail sales since August of 2020, mainly attributed to motor vehicles, motorcycles and parts, construction materials, e-commerce, and household appliances. The market is segmented by product category, distribution channel, and market dynamics.Demographics are playing a major role in determining shopping preferences, with many older Taiwanese consumers buying their meat, fish, fruits, and vegetables at specialist markets.

In response, some supermarkets are trying to attract this consumer group by recreating the look of a more traditional market within their stores; they have achieved some success, particularly in urban areas.The Taiwanese consumer shops for food at least twice a week, and sometimes, daily. However, those who favor shopping at supermarkets and hypermarkets tend to do one big grocery shopping per week.Top-up food shopping occurs on a daily basis in Taiwan, and is carried out mostly in convenience stores.

The new normal in the retail sector will accelerate the development of online shopping platforms which only contributed 2% of sales in the department store and supermarket ...
... segments previously and push them to adopt technology to create a safer physical shopping environment.

Taiwan's success in containing COVID-19 has helped to prevent the large scale closure of retail businesses, however, changing consumer behavior will push retailers to adapt models to the new normal.

Key Market Trends

Consumer Confidence to Strengthen on Minimum Wage Hike

Consumer confidence in Taiwan is expected to strengthen on recent pay increase. The current net minimum wage in Taiwan is NTD 24,000 per month ( USD 854/EUR 704) and NTD 160 (USD 5.7/EUR 4.7) per hour, as of 1 January 2021. Minimum Wages in Taiwan increased to 24000 TWD/Month in 2021 from 23800 TWD/Month in 2020. Improved consumer confidence and higher income levels are expected to have a positive impact on the retail market, especially the F&B sector.

With changing lifestyle and family structure resulting in the growing prevalence of one-person household, more Taiwanese, especially young adults living in urban cities like Taipei, prefer eating out for convenience and for the variety of cuisine on offer. Currently, the number of eateries on the island is growing at an average of 3% to 6% each year to over 120,000, according to Channel News Asia.

In 2017, total revenue of the catering sector in Taiwan topped NTD 452.3 billion, smashing the record high of NTD 439.4 billion in 2016. The average Taiwanese consumer prefers to dine out, while dining-in is most carried out by older people or young families co-habiting with their parents. There is a tide of fashionable, urban, singles, couples, and young families turning that notion around, viewing cooking as a recreational activity.

High Growth of Apparel and Footwear Industry

At present, Taiwan is one of the major manufacturers and exporters of textile and apparel in the world. The country has invested and developed a new technology to integrate the entire value chain of the industry. Apparel industry of the country is highly export oriented. Approximately 75 per cent of the apparels produced are exported. The total production value of Taiwan's apparel industry is estimated USD 13.1Billion in 2021. The apparel market is expected to grow annually by 3.5% by 2024.

The apparel retail market includes baby clothing, formalwear, formalwear-occasion, toddler clothing, casual wear, essentials, and outerwear for men, women, boys, and girls; the market excludes sports-specific clothing. The children's wear segment was the industry's most lucrative segment in 2018, holding 45.1% share of the apparel market. Fast fashion has also proven to be a lucrative sector in the industry, particularly for millennial customers.

Fast fashion brand H&M opened its first store in 2015, and now has a total of 12 outlets across the country. The industry is now highly aware of the power of combining design with aesthetic and cultural creativity. Encouraged and supported by government policy, the industry is actively integrating creativity, innovation, and cultural heritage into design to create unique and refined products. Crossover collaboration is also a new direction to augment market coverage.

Competitive Landscape

The report covers major international players operating in the Taiwanese retail sector. In terms of market share, few of the major players currently dominate the market. However, with technological advancement and product innovation, mid-size to smaller companies are increasing their market presence by securing new contracts and tapping new markets.

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