Taiwan’s Convenience Store Economy

Photo credit Romeo A. on Unsplash (https://unsplash.com/@gronemo)

At the end of 2023, Taiwan had one convenience store per 1,703 people and a total of 13,706 stores across the island.¹ It might be difficult to imagine that each store gets much business given the high density of convenience stores anywhere in Taiwan, but in 2020, each consumer visited a convenience store an average of 130 times a year.² 84 percent of respondents in a 2020 survey even named convenience stores as their most preferred physical shopping destination.³

Taiwan’s convenience stores are unlike those of other countries. They aren’t merely places to buy snacks or drinks and handle matters that, in other countries, are dealt with by banks, post offices, or other government service centers. A diverse variety of bills including public utility bills such as water, electricity, phone, and parking bills, as well as school tuition, taxes, insurance, and credit cards can all be paid at convenience stores. Convenience stores in Taiwan do not charge a service fee for processing essential public bills such as public utilities and taxes and charge varying but minimal amounts ranging from NT$0-NT$15 for credit cards or tuition bills despite processing tremendous amounts of bills each year. This is sustainable because customers stopping by to pay their bills increases foot traffic and sales at stores.⁴

The clustered layout of convenience stores across Taiwan allows convenience store franchises work as groups, and the sheer number of 7-Elevens and FamilyMarts make them industry leaders that in 2021 generated 96%—NT$346.4 billion out of NT$361.4 billion—of the revenue in Taiwan's convenience store industry.⁵ In fact, by 2024, convenience stores were dominating almost 30 percent of Taiwan’s retail spending.⁶

Of course, market saturation means that additional stores from now on likely don’t attract new customers. New locations instead take customers from existing stores. By 2021, average daily revenue per store had dropped below NT$60,000—an all time low that frustrated franchisees.⁷ The industry’s increasing revenue growth isn’t the result of same-store growth but by increases in the number of stores.

The President Chain Store Corporation, which owns almost 50% of convenience store market shares and operates 7-Elevens in Taiwan, bought Carrefour Taiwan, resulting in a corporate conglomerate that owns multiple ‘levels’ of stores, from small convenience stores to larger supermarkets.⁸ This is significant because it gives the company horizontal integration, raising concerns regarding retail concentration where a few massive corporations have control over essentially every place customers can purchase daily necessities from—a problem as regulators in such markets have historically been slow at creating or enforcing protective policies.

Now, convenience stores are attempting to grow through digital services and data collection. FamilyMart’s app is a digital storefront, but through analyzing customer data, it can also predict which products store inventories need to stock up on.⁹ 7-Eleven’s smart checkout kiosks for services such as low-cost insurance plans and transit-card top-ups are also improving their computer vision, allowing them to reduce checkout times and therefore increase convenience.¹⁰ Despite oversaturation and possible issues with conglomerates, convenience stores are vital for Taiwan's super-aged society—they allow elders to easily access daily necessities and pay bills without having to physically exert themselves or struggle with navigating more complicated online commerce or bill systems.

By: Sihyun P.

¹: https://www.taipeitimes.com/News/taiwan/archives/2024/03/19/2003815156
²: https://www.statista.com/statistics/1235523/taiwan-market-share-of-convenience-stores-by-brand/
³: https://www.statista.com/statistics/1235133/taiwan-leading-offline-retail-channels-among-consumers/
⁴: https://www.taiwan-panorama.com/en/Articles/Details?Guid=2a1863fc-57e9-47f0-9bf4-576c8f768db0&CatId=7&postname=Urban+Oases:+Convenience+Stores+Transform+Taiwan
⁵: https://medium.com/@leilac1031/convenience-stores-in-taiwan-what-is-so-special-about-them-7f36dc95b466
⁶: https://www.mordorintelligence.com/industry-reports/retail-industry-in-taiwan
⁷: https://english.cw.com.tw/article/article.action?id=3272
⁸: https://english.cw.com.tw/article/article.action?id=3272
⁹: https://taiwaninsight.org/2022/04/12/at-the-consumers-convenience-what-the-convenience-store-in-taiwan-offers/
¹⁰: https://www.mordorintelligence.com/industry-reports/retail-industry-in-taiwan