Taiwan through the eyes of local startups

It is regarded as a small market that is dwarfed by its giant neighbors of Japan, China and Philippines. But despite its small size, Taiwan’s population of 23 million grew economically in the 1960s to 1990s and was dubbed as one of the four Asian Tigers with strong economic growth.

Fast forward to the current day. In the midst of China’s manufacturing capabilities outshining its own, how has Taiwan fared as an economy? And can Taiwan’s startups be the shining light in the midst of economic challenges? Is the startup ecosystem ready to support new innovation? I asked five startups who have operated in the Taiwanese market for their insights.

Well-developed ecommerce industry as a driver of growth

Taiwan’s ecommerce market is over U$34b market size in 2015 and with a 5-year average annual growth rate of 10-20 percent. It is a sizeable 28 percent of the US$120b traditional retail market and forecasted to surpass traditional retail market. Mobile commerce penetration is also high at 50 percent, with more than 70 percent of all Taiwanese online shoppers purchasing using smartphones.

Tony Wong, co-founder and CEO of Shopline, finds the Taiwanese consumer behaviour unique, which fuels the ecommerce growth. He observes, “The Taiwanese mainly buy online because of the wide selection of merchandise and a mature logistics and payment landscape. On average, a person will purchase something online once a month.”

Mature logistics and payment landscape

 Coupled with a mature infrastructure, the ecommerce market in Taiwan can only grow bigger.

Coupled with a mature infrastructure, it can only grow bigger. Indeed, known logistics and payments providers like Family Mart and 7-Eleven provide cash-on-delivery, which is a popular option. Tony continues, “Imagine that I can order something online, have it delivered to my nearby convenience store within 1 to 2 days and pay during the pickup is truly amazing.”

Taiwanese consumers can also pay via ATMs. “Taiwanese ecommerce merchants have the option to generate a unique one-time ATM bank account for the shopper to deposit the payment with any local bank. Once completed, notifications will be triggered across systems, acknowledging the transaction.”

Startups banking on Taiwan’s ecommerce market

Banking of the growth of the Taiwanese ecommerce market, Tony has founded Shopline, a self-service platform for merchants to launch full ecommerce websites that are mobile optimized. Shopline has over 60,000 merchants on its platform across the region, of which 65 percent are from Taiwan alone. This shows the sheer market for merchants, and he explains, “Merchants in Taiwan have been selling in local marketplaces like Yahoo and PCHome for over 10 years. However, you will need play by the rules of these ecommerce giants, that don’t give businesses the flexibility to operate and build their brand.”

To this end, Tony provides merchants the opportunity to build their own site and brand, giving them more options and capabilities to run their business independently and work with local partners such as 7-11 (logistics) and Allpay (payment) to support these merchants.

Also taking this opportunity to tap into the ecommerce market is Eric Wang. He founded citiesocial, a global curation product discovery ecommerce marketplace for international high-quality home, electronic and fashion brands. The CEO and founder feels that that the market is fragmented and gives his insight, “Unlike China, where 70 percent of the market is dominated by TMALL and Taobao, few Taiwan ecommerce players own more than 10 percent market share, which creates opportunities for smaller sized merchants to tap into the market.” And citiesocial’s figures are the proof of the pudding that smaller-sized merchants have skin in the game, with over 300k registered members and 25k items for sale.

Traditional ways and resistant mindsets are still prevalent

Reluctance of using English hinders company growth

Taiwan’s startup scene

The challenges of fundraising

Advice to startups about Taiwan