Why can’t British retailers succeed in Taiwan?

Another British retailer bites the dust in Taiwan, and the list of failures gets longer…

  • TESCO – sold out to Carrefour;
  • BOOTS – merged counters and business with Watson’s;
  • Marks & Spencer – Now closing;
  • Mothercare – only a few stores in Taiwan;

… can anyone add to this list?

In the rush to expand, many British companies are eager to expand in Asian markets… but they fail to grasp the complexities of the local market, the sheer amount of competition, the fickle nature of Taiwanese shoppers, and the importance of branding, but the worst sin of all: thinking you can make a quick buck here. What’s weirder is that each of these companies has successful operations in other Asian countries, including Thailand, Hong Kong, China, and Singapore… So what’s going on?

Lets start with TESCO. TESCO entered the local market and opened stores in Taipei, Taoyuen, and a few other locations. They were intending to open in December 2000 after purchasing their first location from Makro Asia. Shortly after they expanded to four stores in Taiwan, and a bullish statement by Peter Bracher, head of Tesco International Corporate Affairs, made it clear that they were intending to open upto 10 stores by 2004/5. Then in September 2005, Tesco sold their stores in Taiwan to Carrefour and closed them early in 2006. So what went wrong?

Well, I don’t have access to any of the sales figures, but as a customer I shopped their on more than one occasion. Frankly, I was not impressed. The format of the store was quite similar to the Carrefour stores that dot the island, the product quality for the local products were just not good enough, and they were very slow to introduce their own branded local products. There was an assumption that their typical model would work in Taiwan without sufficient localization. Only later on, when sales lagged, did the management act to introduce local products, such as Tesco Rice or Tesco Oil. While the pricing for these products were quite keen, we weren’t very keen on the freshness of the products, or the store arrangements.



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