Chuan Lian Enterprise, which runs Taiwan’s largest supermarket chain, PXmart, is targeting 20 per cent growth to 1000 stores by the end of next year.
These will be mainly in urban centres, featuring fresh and prepared foods, reports Nikkei Asian Review.
“Convenience stores swept the US and Japan after supermarkets were well established, but the opposite is true in Taiwan,” says Chuan Lian CEO Hsu Chung-jen. “Taiwan’s convenience store industry is extremely mature, with more than 10,000 locations, but the supermarket sector still has a good deal of room to grow.”
After studying in Japan in the 1970s, Hsu returned to Taiwan and introduced the 7-Eleven convenience store brand. He moved to Chuan Lian in 2014, and immediately set about re-establishing the company’s strength in fresh foods. “Younger generations are used to convenience stores – they don’t shop at traditional markets.”
Chuan Lian last year opened a bakery store in the heart of Taipei, and in January spent 450 million New Taiwan dollars (US$13.9 million) to acquire grocery chain Matsusei. Its 53 stores brought Chuan Lian’s total to more than 840 locations.
“The problems we now face are logistical – how to efficiently distribute products to stores as lineups change with the opening of smaller stores,” says Hsu.
Taiwanese supermarkets typically receive product shipments directly from manufacturers through third-party logistics services, but Hsu wants to create a more efficient framework with a network of logistics centres and information systems to manage distribution.
He says megamarts are not particularly well-suited to an aging and shrinking society. “People no longer need to buy in bulk.”
Chuan Lian targets NT$200 billion in sales by 2020 – more than double last year’s figure.
*Photo credit: Solomon203.
