Taiwan is a global hub in Asia, with a strong, export dependent economy. Traditionally its food and beverage markets have been focused on domestic and Japanese brands, with strong consumer loyalty. But demographics and market structure are changing, leading to potential new avenues to explore for Australia’s exporters.
Here are 7 things worth knowing about the food and beverage market in Taiwan.
An export-based economy – but not for food. Once upon a time, Taiwan was a small island with a local agricultural economy, but the story has changed over the late 20th and 21st centuries. The Taiwanese economy is now strongly based around manufacturing and technology for export.
Agriculture, in contrast, now employs only 5% of the population, in an intensive, but limited industry.
An urbanised population favours convenience. Over 78% of Taiwan’s population lives in urban centres, supporting a dominance of convenience stores and rapid growth in the supermarket sector.
In fact convenience stores are everywhere. Taiwan has the highest density of convenience stores in the world! This supports shopping habits which tend to make food and beverage purchases as required, rather than as a regular planned shop.
But supermarkets are growing. Although convenience stores currently dominate the Taiwanese food retail sector, the growth story is in supermarkets, which saw a 6.2% increase in revenue in 2017. This has been generated by broad, competitively priced product ranges, and providing the customer with the shopping experience they want.
Changing demographics change demands. Like Japan, Taiwan has a falling birth rate and ageing population. That gives a large, older consumer class with disposable income who are seeking products which meet their needs.
Consumer behaviour demands recognition and quality. Taiwan is home to savvy and informed consumers with decent levels of disposable income and high consumer confidence. There is substantial brand loyalty, but also price sensitivity, and a demand for good customer service and after-sales care.
Recent years have seen some food scares in Taiwan. Accordingly, consumers are more aware of what they are buying and demand quality and transparency. They are willing to commit to the brands that offer what they are looking for.
It’s about food service as well as food sales. Trends in the food and beverage sector are about more than just retail sales. The food service sector is seeing good growth in Taiwan (an increase of 3.6% in output since 2015), driven by a healthy tourist industry, and consumers willing to pay for convenience and experience.
The food service sector takes a range of forms. As well as sit down fast food outlets, cafes and restaurants, many convenience stores offer express delivery services on ready meals, beverages and other products. The bigger convenience stores now include in-house cafes as well.
Many food service outlets offer western style menus and look to import the necessary ingredients.
Does Taiwan sound like an intriguing export destination? Export Connect will be hosting a market visit to Korea and Taiwan in May 2019 to help Australian businesses find out more about the opportunities on offer, and to start building crucial networks. If that sounds like an experience your business needs, register your interest in our upcoming market visit to Taiwan – we always love to hear what we can do to help you.