Taiwan's economy is set to enjoy its biggest growth in three years, with authorities projecting GDP growth of 2.82 per cent this year. And the island's booming tourism seems to be a bright spark for the retail sector.
TAIPEI: Taiwan's economy is set to enjoy its biggest growth in three years, with authorities projecting GDP growth of 2.82 per cent this year.
It is a big change from last year's slow growth that saw private consumption fall below target to the lowest level in four years.
And the island's booming tourism seems to be a bright spark for the retail sector.
Among the hottest new items that Taiwan’s biggest department store chain, Shin Kong Mitsukoshi, hopes will boost sales in 2014, are colourful sweets from Europe, and stylish winter jackets.
And they really do need to boost sales, as the department store saw its revenue slipping by 0.5 per cent to US$2.5 billion last year.
Taiwan's retail market has always been very competitive, and that competition becomes all the more keen when the island's private consumption levels hit four-year lows.
The department store said its sales would have contracted even more, if it wasn't for big spending tourists from the other side of the Taiwan straits.
Vivian Ou, marketing manager of Shin Kong Mitsukoshi Xinyi Place, said: "Mainland visitors account for 60 per cent of all the tourists shopping at our stores. And in terms of sales, we saw a 60 per cent growth in spending by the Chinese last year.
“They spend most on luxury designer brands like Chanel, followed by cosmetics. They know Taiwan offers the best deals on cosmetics during our annual sale. "
Electronics products like iPhones and iPads are also very popular among Chinese visitors in Taiwan.
Prices in Taiwan are cheaper by as much as 20 per cent than those in China, boosting sales by 5 per cent last year.
The Chinese Mainland is now the biggest source of visitors to the island.
More than 2.6 million travelled to Taiwan last year, spending more than US$4.5 billion.
Masson Li, vice president of Taishi Holdings Research Department, said: "The average spending by mainland visitors has gone from US$130 a day in 2008 to US$170 now. Overall, that's a 30 per cent increase.
“At the same time, the number of Chinese tourists has risen to 2.6 million last year from 0.3 million. It could easily top 3 million this year."
To leverage on the rising interest by mainlanders and looking ahead to the year of the horse, Taiwan plans to allow more mainland visitors to visit the island.
And the retail sector certainly stands to benefit.
Shin Kong Mitsukoshi is confident that it will see a 3 per cent growth in this year's sales.
“.....Mainland visitors account for 60 per cent of all the tourists shopping at our stores. And in terms of sales, we saw a 60 per cent growth in spending by the Chinese last year.”.