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Economic Uptick Sees Taiwan Traders Enjoy Chinese New Year Windfall

With the territory's economy having bounced back during the course of 2017, even before the official figures have been released, it has been assumed that Taiwan's caterers, retailers and tourism operators all had a very good New Year.

Photo: Taipei’s Lantern Festival: A major lure for newly-affluent New Year celebrants. (Shutterstock.com/topimages)
Taipei's Lantern Festival: A major lure for newly-affluent New Year celebrants.
Photo: Taipei’s Lantern Festival: A major lure for newly-affluent New Year celebrants. (Shutterstock.com/topimages)
Taipei's Lantern Festival: A major lure for newly-affluent New Year celebrants.

Thanks to something of an economic rebound in 2017, hopes were high in Taiwan that the run-up to Chinese New Year 2018 would prove to be a bumper period for the territory's retailers. It was also expected that a number of other commercial sectors, notably tourism and transportation, would do well.

In particular, though, it was the catering sector that was seen as likely to be the prime beneficiary. This really should come as no surprise as catering is always at the heart of any Chinese New Year celebration, including annual corporate dinners, family reunion banquets and the traditional meals designed to welcome in the coming year.

The success of the sector has long been boosted by the fact that most Taiwanese families rely on double incomes, with both the husband and the wife working full-time. As a consequence, many families struggle to find the time to shop for all of the traditional goods associated with the festive period, while preparing the extensive banquets expected as part of the celebrations is also a challenge. As a result, many families now opt for takeaway Chinese New Year dishes from restaurants, with many caterers now seeing the provision of eat-at-home dishes as an integral part of their business.

It is worth pointing out that – due to the ubiquity of internet access, the expansion of the logistics sector and the rapid rise of e-commerce – more and more people are ordering New Year dishes online. By the same token, an increasing number of restaurants are turning to e-commerce as a way of maximising their share of the festive catering market.

In line with this, figures from ETMall, Taiwan's leading e-commerce portal, show that more than 40,000 people bought Chinese New Year dishes online this year, with consumers who had preciously bought such items via this channel tending to spend more than first-time customers. Consumers who had bought festive dishes for three consecutive years, for example, purchased 6.7 items on average this year, with each bill amounting to about NT$18,000, a figure markedly higher than that for first-time buyers.

While saving time and effort, the online purchase of Chinese New Year dishes is not without its drawbacks. Almost all such dishes, for instance, are prepared in central kitchens and, as a result, tend to err on the bland side. In addition, freshness is also often compromised on account of the need to pre-heat dishes prior to serving.

As a counterweight to this, over recent years, a number of catering firms have begun to offer high-end products, dishes made using solely the best ingredients. Inevitably, though, all such items come with hefty price tags, with one five-star hotel selling Fo Tiao Qiang (a variety of shark fin soup) at NT$6,000 (US$205) per tureen. With just 1,000 servings prepared, the entire run was quickly snapped up.

While it is still too early for the Ministry of Economic Affairs (MoEA) to have released the final Spring Festival 2018 sales figures, a look at the statistics from previous years offers a clear indication of what to expect. In January-February 2017, for instance, Taiwan's catering sector recorded turnover of NT$79.6 billion, up 2.9% year-on-year.

Taking a longer historical view, the territory's catering sector turned over NT$55.7 billion for January-February 2007, indicating that spend has increased, on average, by about NT$2.39 billion per year over the intervening period. With current economic activity on the up, growth over the past 12 months is expected to be equally high, if not substantially higher.

Apart from dining, recreation is one of the other key elements in the New Year mix. With this year's Taiwan Spring Festival holiday stretching across six days, there were considerable opportunities for whole families to take trips together.

According to figures from the Taoyuan International Airport Corporation, passenger flow started to increase from 13 February onwards, with the level of outbound passengers rising from 110,000 a day to a new record of 141,000 on the fourth day of Chinese New Year (19 February). In total, outbound passenger volume increased by 6% year-on-year between 9 and 19 February, with a total of 479,300 passengers flying out between Chinese New Year's Eve and the fifth day of Chinese New Year.

Overall, it was Asian destinations that proved the most popular with Taiwan's Spring Festival tourists, largely because the 2018 holiday period was shorter than that of previous years. According to Kayak, a popular travel-booking website, Japan was the preferred destination for many Taiwanese tourists this year, with Tokyo, Osaka and Okinawa taking the top three slots, with Seoul in fourth place and Hong Kong fifth.

Despite this uptick in outbound tourism numbers, the majority of Taiwan's population opted to stay at home over the New Year period, typically seeing relatives, going on day trips or visiting temples. The good weather throughout the holiday period meant that many of the territory's best-known tourist spots – including Anping (Tainan), Lukang (Changhua), Tahsi Old Street (Taoyuan) and Chiufen (New Taipei City) – enjoyed a surge in visitor numbers. At the same time, many of the territory's theme parks also recorded a dramatic rise in visitor numbers, partly on account of the availability of discounted New Year tickets and the introduction of a series of festive-themed events.

Not every tourist attraction, however, benefitted from increased tourist footfall. In the case of the normally popular Hualien-Taitung area, an earthquake on 6 February led many would-be visitors to cancel their bookings. As a result, 140,000 fewer tourists visited the area this year, a 24% drop over the corresponding 2017 figure.

Another casualty was Kenting National Park in southern Taiwan, where poor online reviews saw visitor numbers dip dramatically. Although the local tourism office reported that 2018 had been the worst year for the attraction for more than two decades, it is believed that holiday homes in the park still maintained an 80% occupancy rate over the holiday period.

By comparison, Sun Moon Lake, a rival attraction, enjoyed a record year. More than 300,000 tourists visited the site during the holiday period, a massive 64% year-on-year increase.

Photo: Tihua Street: Are takings up on Taipei’s leading New Year sales thoroughfare? (Shutterstock.com/Perry Svensson)
Tihua Street: Are takings up on Taipei's leading New Year sales thoroughfare?
Photo: Tihua Street: Are takings up on Taipei’s leading New Year sales thoroughfare? (Shutterstock.com/Perry Svensson)
Tihua Street: Are takings up on Taipei's leading New Year sales thoroughfare?

After dining and recreation, shopping is the third-most popular activity associated with the New Year period in Taiwan. Regardless of the impact of e-commerce on the territory's retail sector, many department stores, shopping malls and other outlets still see Chinese New Year as a prime sales period, frequently launching a variety of promotions aimed at luring customers.

This year, for instance, many department stores once again opted to give away "lucky bags", complete with special prize-draw tickets and discount coupons. Overall, the sector is expected to have put in a good performance, with double-digit year-on-year growth widely anticipated.

Apart from increased online competition, Taiwan's retail sector has also undergone a number of other structural changes over recent years. In particular, the introduction of several substantial US-style shopping malls and discount outlets outside of the traditional retail areas has obliged many established department stores and malls to broaden their appeal through the addition of gourmet dining facilities and multi-screen cinemas. How successful this approach has been will be revealed when the MoEA releases the final overall sales figures for the period.

Robert Kang, Special Correspondent, Taipei

Content provided by Picture: HKTDC Research
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