What are Overrated Places in Taipei

The retail structure in Taiwan. Empirical study of convenience stores in Taipei

Table of Contents

1 convenience made in Taiwan

2 Evolution of the types of business from a theoretical perspective
2.1 Conceptual basics
2.1.1 Trade term and the types of retail trade
2.1.2 Definition of "convenience store"
2.2 Theoretical approaches to business change
2.2.1 Structural change as a result of endogenous and exogenous factors
2.2.2 Environmental theories
2.2.3 Cyclic theories
2.2.4 Conflict Theories
2.2.5 Further approaches to the change in business forms
2.3 Synopsis of selected studies
2.3.1 Analysis of the change in business practices in Taiwan
2.3.2 Change in daily consumption in Taipei
2.3.3 Development of the Taiwanese convenience stores
2.3.4 Criticism of franchising in convenience retail

3 Development of the retail structure in Taiwan
3.1 Geography of Taiwan (Republic of China)
3.2 Elements of structural change
3.2.1 Economic and political development
3.2.2 Developments on the demand side
3.2.3 Influences from the planning side
3.3 Structure of the Taiwanese food retail sector
3.3.1 Features and special features
3.3.2 Resistance of traditional market forms
3.3.3 Development phases of the supermarkets
3.3.4 Development phases of hypermarkets
3.3.5 Growth phases of the convenience stores
3.3.6 Effectiveness of retail space

4 Empirical analysis of the convenience stores in Taipei
4.1 Conception and implementation of the study
4.2 Supply Side Examination
4.2.1 Structure of the range in the convenience market
4.2.2 Form of organization and franchise system
4.2.3 Product range and services
4.2.4 Distribution and merchandise management system
4.2.5 Spatial effectiveness and locations
4.2.5.1 Dissemination on a supraregional level
4.2.5.2 Examination area Taipei City
4.2.5.3 Taipei City network of locations
4.3 Investigation of the demand side
4.3.1 The choice of the place of purchase
4.3.2 Characterization of convenience store customers
4.3.3 Features at different locations
4.4 Comparison with the food retail trade

5 factors influencing the high density of convenience stores
5.1 Internal success factors
5.2 External influencing factors
5.3 Convenience stores as reflected in the change in business practices

6 development perspectives of the Taiwanese convenience stores

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Abstract

Since the introduction of the convenience stores in the Taiwanese retail market in the early nineteen-eighties this new format has been dramatically increasing and claims now for the highest store density in the world. A convenience store is a small scaled retail outlet with extended business hours which sells products of daily necessity and prepared food. Due to the fierce competition to other retailers and convenience stores, the leading convenience store chains successively widen their services and even get into competition with fast food chains and other service providers. As a result of the growing customer demand for convenience, the store network expanded via franchising from traditional locations in neighborhoods and business areas, to universities, hospitals and transportation hubs. Although the theory of convenience shopping describes customer demands as highly impulsive, this customer survey indicates that convenience stores are deeply embedded into daily life and therefore shoppers also visit stores more consciously. Furthermore, the research claims that besides other factors like innovation or an effective distribution system, external factors such as the zoning regulation and variety of customer usage, which comes from the dense expansion network in the urban area, highly contribute to the competitive advantages of this retail format.

List of tables

Tab. 1: Taiwan's main economic indicators

Tab. 2: Mobility development in Taiwan

Tab. 3: Characteristics of the types of business in the food sector

Tab. 4: Leading supermarket and hypermarket branches in Taiwan (as of 2009)

Tab. 5: Investigation profile of the store manager survey

Tab. 6: Profile of the customer survey

Tab. 7: Delivery times for a 7-Eleven store in Taipei

Tab. 8: Categorization of the sales area size

Tab. 9: Convenience store distribution in Taipei

Tab. 10: Customer characteristics depending on age

Tab. 11: Features of the individual locations

Tab. 12: Retail formats from the customer's point of view

Tab. 13: Convenience stores' success concept

Tab. 14: Inventory development in the food retail sector

List of figures

Fig. 1: Geographical location of Taiwan

Fig. 2: Development of expenditure in Taiwan since 1976

Fig. 3: Structural breakdown of the Taiwanese food retail sector

Fig. 4: Development of market shares in the food segment

Fig. 5: Change in the location structures of the retail trade in Taiwan

Fig. 6: Global distribution of 7-Eleven and Family Mart

Fig. 7: Sales development of the leading C-store operators

Fig. 8: Inventory development of the leading four convenience providers

Fig. 9: Development of the organizational form in the convenience sector

Fig. 10: Sales structures in Taiwanese 7-Eleven stores

Fig. 11: Range and service between competition and cooperation

Fig. 12: Change in the distribution system

Fig. 13: Highest number of convenience stores in Taiwan

Fig. 14: Taipei City

Fig. 15: Convenience store distribution in Taipei

Fig. 16: Neihu industrial area

Fig. 17: Zhongxiao Eastroad shopping street

Fig. 18: Old city center at the Taipei Mainstation

Fig. 19: National Taiwan University

Fig. 20: Frequency of visits by 7-Eleven customers

Fig. 21: Spatial proximity to the convenience store

Fig. 22: Most important reasons for visiting a 7-Eleven

Fig. 23: Reason for choosing a 7-Eleven

Fig. 24: Reasons for choosing a convenience store

Fig. 25: Convenience store customers preparing for shopping

Fig. 26: Choice of means of transport

Fig. 27: Shopping cart of the surveyed 7-Eleven customers

Fig. 28: Expenditure structure of the respondents

Fig. 29: Age structure of customers

Fig. 30: Employment of 7-Eleven customers

Fig. 31: Power relations in the value chain

Fig. 32: Synergies in the franchise system

Photo directory

All photos presented are the author's own recordings.

Photo 1: Xinyi Shopping District in Taipei City

Photo 2: Owner-run grocery store in a residential area of ​​Taipei

Photo 3: Taipei State Food Market

Photo 4: Taipei private food market

Photo 5: Wellcome supermarket in the basement of a building in Taipei

Photo 6: Carrefour in Taoyuan, a suburb of Taipei

Photo 7: Family Mart and 7-Eleven in the immediate vicinity

Photo 8: 7-Eleven at Taipei's Xinyi Bus Station

Photo 9: 7-Eleven Express at Banqiao Station in New Taipei City

Photo 10: Ready-to-eat products in the Family Mart

Photo 11: Packages ordered in the 7-Eleven

Photo 12: 7-Eleven Logistics truck on delivery in Taipei

Photo 13: Delivered goods in reusable containers

Photo 14: Family Mart on a country road in Hualien

Photo 15: One of three Mini 7-Eleven in the MRT station of Taipei Mainstation

Photo 16: Large 7-Eleven in Taipei

Photo 17: Mini-Family Mart on the NTU campus

Photo 18: OK-Mart integrated into a street market

Photo 19: Making sushi in a Carrefour

1 convenience made in Taiwan

The convenience store (C-Store) theme has long been associated with the USA and Japan. But since Taiwan overtook Japan as the country with the highest density of C-stores in the world - measured in inhabitants per store - in 2003, the still young retail format in this region has increasingly come into the focus of scientific studies (cf. Chang / Dawson 2007). Nevertheless, new shops have been added since then, and the number has almost doubled within a decade. Statistically, there is an outlet every 500 meters throughout Taiwan, serving around 2,500 people (Taiwan Today 01/2012; USDA 2010a). Above all, 7-Eleven, a synonym for convenience retail, has built a particularly large expansion network and dominates the market with almost 50%.

The change in the economy, politics and society, due to global and local influences, has also left its mark on Taiwan's retail trade. According to a thesis by Jones / Simmons (1990), retail is a mirror of social developments. There are three main forces acting on the retail structure. On the one hand, this is the demand side, as a result of increased household incomes and changing lifestyles. On the other hand, the supply side, as a result of new operating forms and their further development. In addition, there are state interventions in the form of laws and regulations (cf. Kulke 2010b). However, greater attention is also paid to cultural characteristics in the analysis.

"... retailing is very strongly a reflection of local culture" (Shiu / Dawson 2002: 76).

This is reflected in the retail structure of Taiwan. The food retail sector in particular is still very fragmented. The persistence of traditional and informal retail formats shows that they have so far been able to withstand the economic logic of modern types of business, such as supermarkets and hypermarkets (cf. Wu 2005). On the other hand, the development of the retail structure is characterized by a high degree of dynamism, of which the high growth of the C-Stores, measured both in terms of newly opened shop units and in terms of market shares, stands out.

Typical features of a C-store are small sales areas, long opening times, a relatively high personnel requirement and locations in the local supply area. This is all the more remarkable because in today's world, western and modern retail formats see their competitive advantage primarily in maximizing retail space to increase sales area productivity. The endeavor to move its location to non-integrated locations fits in with this, since the costs of space there are cheaper than in the city center and advantages in terms of logistics are seen. In addition, there are savings in staff and shop design in order to achieve profit margins at all in the downward price spiral. The international trading companies Aldi, Tesco, Carrefour and WalMart are examples of successful implementation. In most grocery retailers, for example, cost savings are extremely important in order to maximize sales.

Against this background, the question arises why C-stores with opposing methods are currently the most successful form of business in Taiwan. Auer / Koidl (1997) therefore already described convenience as the supreme discipline in retail. What is certain is that within Taiwanese society, demands for convenience purchases have increased steadily due to higher incomes and greater time pressure. This trading concept is thus met with broad acceptance among the population, as it offers a suitable form of supply for the current hectic lifestyle with long working hours. The results of the present study show how far C-stores have already penetrated into the living area of ​​Taiwanese.

The aim of the study is to find out the reasons for the success of convenience stores. For about a decade this has been reported mainly from a business perspective (see Chang / Dawson 2007; Wu et al. 2009; Tu et al. 2009; Cheng et al. 2009). Since these studies are primarily focused on internal processes and innovations, further explanations about the reasons and effects of the C-Store expansion have so far been neglected. To gain a deeper understanding of this industry, there has been no integrating research approach that analyzes the supply side on an equal footing with the demand structure. In addition, it was necessary to work out to what extent the convenience market relates to other food retailers, especially to modern types of businesses. To this end, empirical field research was carried out in the metropolis of Taipei City. Expert interviews with store managers and a customer survey at the point of sale (POS) at selected 7-Eleven stores revealed both surprising and logical results.

2 Evolution of the types of business from a theoretical perspective

2.1 Conceptual basics

2.1.1 Trade term and the types of retail trade

The geographical trade research is based on the definition of trade by the Committee for Definitions of Trade and Marketing (1995: 28). Accordingly, trade is described in both a functional and an institutional sense. “Trade in the functional sense occurs when market participants procure goods from other market participants and sell them to third parties, which they normally do not handle or process themselves (trade goods)" (IfH 1995: 28). Heinritz (2003: 20ff.) Further differentiates between three spatially relevant functions of retail:

1. Bridging function: compensation of the spatial and temporal separation between production and consumption.
2. Goods function: compensation of differences in production and delivery to the consumer.
3. Function of the brokerage office: market development by publicizing the goods and providing advice at the location.

On the other hand, under trade in the institutional sense, the specific retail operations are meant. “Trade in the institutional sense - also referred to as commercial enterprise, trading operation or action - includes those institutions whose economic activity is exclusively or predominantly attributable to trade in the functional sense” (IfH 1995: 28). In the literature there are a large number of heterogeneous terms of business type, but the definitions have in common the definition of a company concept (cf. Purper2007: 5; Heinritzetal. 2003: 26f.). A type of business is therefore defined by the characteristics of the branch, product range, price level, type of service, area, location and branches (see IfH 1995: 41). In business administration, the terms type of business and type of business are usually used synonymously, which is why this is also dealt with in this work (see MüllerHagedorn 1998; Heinritzetal. 2003: 29).

Furthermore, the term retail is different from wholesaling. While the retail trade sells its goods exclusively to private end consumers, the wholesalers offer their goods to traders such as resellers or bulk consumers for sale. However, this clear definition leads to difficulties in practice, since some wholesalers also sell to the end consumer (cf. Kuschnerus 2007: 13). Furthermore, the concept of business type is related to stationary retail trade in the true sense (cf. Tietz 1993: 29ff.), And is to be differentiated from offer forms of outpatient trade and mail order or e-commerce. The stationary retail trade must have an externally recognizable and regularly open sales area. A distinction is also made as to whether the trading activity takes place in one's own name (autonomously) or in the name of someone else. The motor vehicle trade and accessories sectors are not recorded in the retail trade (cf. Heinritz et AL. 2003: 23).

2.1.2 Definition of "convenience store"

There is no common translation for the term convenience in German-speaking countries, which is why it is used unchanged in the specialist literature. Convenience means something like convenience and availability (cf. Swoboda / Schwarz 2006: 397; Auer / Koidl 1997: 31). Convenience was initially used to categorize products (see Copeland 1923 Tietz 1975: 98; Zentes / Swoboda 2001), later also in connection with consumer trends and services, especially from the USA and Japan (see Gerling 1997; Darden / Lumpkin 1984; Berry et al. 2002).

Swoboda / Schwarz (2006: 397) see convenience both as a consumer need during the shopping process and as a form of supply in retail. Convenience from the supplier's point of view can in a broader sense also include types of operations, sales or services if they are able to meet these needs “from the subjective point of view of the consumer, [...] which relates to mail order, e-commerce, types of catering or even Discounter, hypermarket etc. may apply ”(Swoboda / Schwarz 2006: 397). However, the present work focuses on convenience in the narrower sense. These are types of businesses in the food retail sector that specialize in convenience: C-stores; in the German context mainly petrol station shops. “C-stores are mostly stationary retail operations multiplied in a branch or franchise strategy with physical proximity to the consumer (neighborhood or frequented locations) with a relatively wide but flat range, the focus of which is on food and luxury goods as well as everyday goods.

Fast moving products are offered on a sales area of ​​less than 400 [sqm] ”(Swoboda / Schwarz 2006: 399).

The aim of a C-store is to satisfy the customer's needs for easier shopping, reduced stress and quick shopping through easy accessibility and short length of stay. With a coordinated assortment in the area of ​​daily needs - a mix of trade, services and gastronomy - an attempt is made to come as close as possible to the one-stop shopping approach on a small sales area, for which a slightly higher price is charged. The average receipt is low, as only a few items are bought per customer and purchase (cf. Kohlisen 2001: 68ff).

Convenience products, or convenience goods, are goods with a low individual value and a high level of standardization. They are often needed, which is why purchasing is as effortless as possible.The core range of a C-store is therefore beverages, confectionery, magazines, tobacco, frozen goods and personal care products. The habitualized buying behavior is characterized by low information processing and relatively stereotypical shopping patterns and is related to impulse buying and the generation of sales through random visits by passers-by (suscipient business) (cf. Heinritz et al. 2003: 30ff). In the service area, according to Swoboda / Schwarz (2006: 399f.), A distinction can be made between a goods-dependent main service (e.g. delivery services) and goods-independent ancillary service (e.g. parking spaces). Due to the expansion of services, concepts “from new business areas such as lottery / totes, postal service, etc. or also gastro elements such as bistro, fast food, etc.” are increasingly being adopted (Swoboda / Schwarz 2006: 399).

In the Taiwanese context, C-Stores have developed a certain in-house development, which is why they differ in some points from their international counterparts. Chang / Dawson (2007: 22) characterize the Taiwanese-style C-Store as follows:

- Location: residential areas, business districts and mixed business and residential areas.
- Sales area: 50 - 230 sqm.
- Assortment: 2000 - 3000 articles; limited food supply, convenience products and services.
- Price policy: Slightly higher than in supermarkets or hypermarkets.
- Long opening times: 24 hours a day, 365 days a year.
- Efficient store management: Electronic point-of-sale (EPOS) for sales and inventory management as well as standardized know-how for easy store management.
- Delivery: self-service principle (self-service principle) to reduce labor costs.
- Organization: chain-run retail business, especially franchising, to achieve economies of scale.

Thus, a C-store differs from the traditional grocery store primarily in terms of service and store layout. C-Stores offer standardized customer service and a comfortable and modern ambience. The store layout and management are also largely standardized. The term convenience is further divided into the aspects of location, opening time and product. Applied to Taiwan, this means that due to the well-developed C-store network, the closest location can usually be reached within 5-10 minutes on foot. The opening times are, with the exception of location-related exceptions (e.g. in a shopping mall), 24 hours on all weekdays and public holidays. It applies to the products that they are easy to transport due to their compact product size (cf. Chang / Dawson 2007: 22).

2.2 Theoretical approaches to business change

2.2.1 Structural change as a result of endogenous and exogenous factors

One of the few constants in retail is change. International research has been carried out on this from both a theoretical and a practical point of view, on the one hand to understand the driving forces behind this dynamic, and on the other hand to pass on recommendations for action to the retail trade.

“It has often been said that the only constant in retailing is change, and retail change, if never a burning issue, has been a constant feature of marketing thought” (Brown 1987: 5).

The development of the retail trade is determined by its trading environment and is divided into trade-exogenous and trade-endogenous factors (cf. Hatzfeld 1987). The influencing factors mentioned cannot be viewed in isolation from one another, as they influence one another (cf. Purper2007: 11). Factors that are exogenous to trade form the environment in which the retail trade is located. They are made up together

- socio-economic and socio-cultural influences, as well
- political-administrative influences.

The socio-economic and socio-cultural influences determine customer behavior, which is broken down into income, social, behavioral and spatial overcoming factors (cf. Kulke 2005). Income growth not only leads to a changed demand structure, but also to increased mobility. In addition, demographic changes and the differentiation of society into lifestyle groups lead to an increasing individualization of demand. The political-administrative system in turn influences the development of the road network and sets social goals and models for retail development (cf. Heinritz et al. 2003: 42).

In contrast, trade-endogenous influences are changes caused within the industry. These can be divided into

- Market and competitive conditions, as well as
- organizational and technological innovations.

The competition is divided into the two types of interformal competition (competition between different types of business) and intraformal competition (competition of the same or similar types of offer). The market conditions are influenced by the buying power of the trade, i.e. to what extent the trade can decide on the range and prices vis-à-vis the customer or producer. In addition, innovations such as the introduction of the self-service principle, which goes hand in hand with an expansion of the sales area and range, and, on the technological side, the use of modern merchandise management systems contribute to increasing the effectiveness and rationalization of work processes (cf. Heinritz et al. 2003: 42f.).

In the retail sector, the structural change is manifesting itself spatially in several respects. One aspect, for example, is the decline in operations, as more financially strong retailers are increasingly displacing owner-managed retailers from the market. This results in the effect of scaling up. Multi-business enterprises expand geographically and try to occupy as large a sales area as possible in order to achieve higher profits. In addition, there are changing location structures, as retailers tend to concentrate either on heavily frequented inner city areas or more cost-effective locations on the outskirts of the city (cf. Heinritz et al. 2003: 44f.).

2.2.2 Environmental theories

The classification of the theories of business change goes back to Brown (1987). He divided the explanatory approaches into three groups: environmental theories, cyclical theories and conflict theories.

The environmental theories are also called adaptation theoretical explanations. They postulate that retail formats have to adapt to changing trade-exogenous influences in order to be able to survive successfully in competition. Trade is viewed as an adaptable environmental system that is subordinate to external conditions. The providers find themselves in a struggle for distribution, similar to Darwin's theory of natural selection (cf. Gist 1968; Dreesmann 1968). The most successful format in competition is that which can best adapt to the corporate environment (cf. Roth et al. 1993: 173f .; Purper 2007: 40). The most important influences come from suppliers, customers and the competition, but also from society and politics (cf. Glöckner-Holme 1988: 62). Criticism is mainly justified by the ignoring of endogenous factors and the lack of explanations for the emergence of new formats (cf. Heinritz et al. 2003: 49; cf. Brown 1987: 9).

2.2.3 Cyclic theories

There are several approaches to cyclic theories. One of them is the displacement theory approach - according to McNair (1958) also Wheel of Retailing. The idea behind this approach is that every type of retail business goes through four consistent phases. In the start-up phase, a new type of business enters the market with an aggressive pricing strategy and slowly gains market share at the expense of established business types. During the maturity phase, intra-formal competition intensifies, in which the new providers upgrade their product range qualitatively through a trading-up. The previously innovative retail concepts are finally increasingly approaching the previous forms of offerings and are thus changing into traditional forms of business. Finally, in the phase of saturation or withdrawal, a process of shrinking sets in, as newer and more aggressively priced forms of business are again gaining market share (cf. Heinritzetal. 2003: 49). Although the displacement theory approach has been empirically proven in some cases (see Kulke 1992; Mason et al. 1993), criticism has also been expressed because multi-business enterprises and business decisions are excluded (see Heinritz et al. 2003: 50). In addition, Hollander (1960) gave empirical counterexamples from the USA and from developing countries.

The life cycle approach is based on the knowledge of the product life cycle (see Purper 2007: 41). Accordingly, the types of business in the retail trade go through four defined phases of life (cf. Davidson et al. 1976: 71; Berger 1977): introduction, growth, maturity, degeneration. This happens on the one hand through an aging process of the products sold, on the other hand through a shift in preferences on the part of customers. The cycle begins with the introductory phase, in which a new and innovative form of business enters the market. As a result, the new form of offer expands in the growth phase due to competitive advantages; The peak in both sales and contribution margin is finally reached in the maturity phase. In the last phase, a downward trend finally sets in and market shares are lost. A cancellation process also begins at the respective location (cf. Berger 1977: 66). It is criticized that the theory inevitably ends in the decline of the type of business. However, the maturation process can be influenced by the product range. Action parameters such as price and service are also disregarded (cf. Klein 1995: 39f.). In addition, there is criticism of the supposed general validity in which the operating forms run through the life cycle and the associated predictability of system maturity (cf. Liebmann et al. 2008: 357).

Another cyclical theory is that of the sequence of generalization and specialization. This theoretical approach is also called the Retail Accordion by Hollander (1966) and Tietz (1993). According to this theory, retailers with a wide and flat or generalized assortment alternate those with a narrow and deep or specialized assortment. Gist (1968: 97ff.) Divided the development into three phases using the example of the USA. In the first phase, generalized transactions dominate. In rural areas these are small shops with a wide and flat range, in the cities later also department stores. Then, in the second phase, the variety of consumer goods increases sharply. For this reason, market segmentation is starting for the first time, especially in the cities that have grown, in which specialized providers have advantages in terms of satisfying demand. In the third phase, the specialized shops finally increasingly expand their range in order to be able to guarantee further growth opportunities (cf. Purper2007: 51). Tietz (1993: 1318) and Brown (1987: 10) criticize the fact that simultaneous tendencies towards generalization and specialization can be observed, but that these appear inconsistently. It is also neglected that further influencing factors such as size and degree of organization of the company should be taken into account for the attractiveness of a type of business (cf. Heinritz et al. 2003: 51).

The market gap approach is also one of the cyclical approaches. Accordingly, new forms of business arise in order to better adapt to the changed customer and product structures. Since the market is never completely covered, there are gaps for other types of business, which they can close by putting together a range of products based on requirements. This leads to an increasing specialization of the providers, along with a rationalization process, which is passed on to the consumers through lower prices. Nevertheless, despite these advances, there are still gaps in the market that are being closed by new forms of offer. In the long term, this development leads to a growing differentiation of offers and market segmentation (cf. Klein 1995: 40; Tietz 1993: 1318). Böhler (1993: 20ff.) States that the central element of this approach is less the gap in the market than the cost advantage. He also considers the approach to be questionable, since in saturated markets a single development per expansion of supply and price reduction cannot be observed.

A positive aspect of the cycle theories is that, in contrast to the environmental theories, the appearance of new types of farms can be explained. On the other hand, exogenous influences receive less attention. In addition, change is determined and a long-term equilibrium of the types of business is postulated (cf. Heinritz et al. 2003: 52f.).

2.2.4 Conflict Theories

Conflict theories focus on the reactions of existing types of companies to changes in the competitive environment. This leads to the formation and differentiation of existing forms of business. Stern / El-Ansary (1982: 244ff.) Provide a scientific contribution to this with the crisis response theory. This concept describes a chronological sequence of individual reaction stages, which lead to the resolution of corresponding conflicts and the creation of a state of equilibrium in the operating modes. Martenson (1981) used the example of the furniture company IKEA to subdivide the reaction of competitors into the phases of shock, defense and countermeasures. The state of equilibrium achieved in the end is, however, rather unstable, as new changes in the structure of the company can trigger new conflicts. The criticism of this theory is that exogenous influences are ignored (cf. Heinritz et al. 2003: 53), or that the phase sequence is relatively inflexible (cf. Evans et al. 1993: 83).

The counter-power theoretical approach goes back to the concept of Galbright (1952). It says that a concentration of economic power leads to a desirable opposite pole from a socio-political point of view. In the case of retail, an imbalance that has arisen on one side of the market (supplier or customer) is balanced out by countermeasures on the inferior side. Accordingly, the concentration of the retail corporations emerged as a reaction to the increased power of the producers (cf. Heinritz et al. 2003: 53). However, this approach offers neither explanations for the immanent change processes in retail (cf. Hoffmann 1977: 302), nor does it consider the horizontal relationships in retail trade in the form of intra- or inter-company form competition (cf. Heinritz et al. 2003: 53).

The polarization theory approach also belongs to the group of conflict theories. The forms of business polarize as a result of a change in the demand behavior for goods of basic and additional use (cf. Heinritz et al. 2003: 53). Tietz (1993: 1324ff.) Cites the polarization tendencies observed in retail after matching the range and the service intensity. For example, basic utility-oriented forms of business pursue a strategy of price minimization through the consistent application of the self-service principle. Additional benefit-oriented types of business, on the other hand, concentrate on performance optimization through a high level of consulting intensity and complex shop design.

Tietz (1993: 1326) sees the result primarily as a spatial polarization with a division of functions in the urban areas. The city center acts as a location for high-quality goods, while the outskirts primarily serve as a low-cost location, but through trading-up it is getting closer to the city center. In addition, Kirby (1986) demonstrated for England that polarization due to divided income behavior can also lead to new forms of business in basic needs. High-income sections of the population are ready to forego a longer supply route for additional costs when purchasing supplies, which among other things promotes the development of neighborhood shops and C-stores.

Low-income consumers, on the other hand, would be forced to cover longer distances for cheaper purchases.

In addition, other types of polarization are identified, such as a polarization between basic and additional needs or between supply and adventure trade (cf. Unkelbach 1982) as well as polarization tendencies between small and large-scale forms of retail trade (cf. Dreesmann 1968: 79f.). Although Böhler (1993: 32) considers the explanations for the development of business forms to be too vague, he is suitable to explain the parallel existence of different types of business (see Müller-Hagedorn 1995: 252). Heinritz (2003: 54f.) Emphasizes the importance of polarization theory, since endogenous and exogenous factors are linked and action parameters such as the choice of location, especially for urban space, are taken into account.

2.2.5 Further approaches to the change in business forms

In the literature, further theoretical explanations for the change in operational forms are given. The following compilation is based on Tietz (1993: 1314ff.) Purper (2007: 53f.) And Heinritz (2003: 55ff.).

The evolutionary theoretical approach is based on the principle of dialectical materialism according to Hegel and Marx (cf. Gist 1968: 106f.). Applied to trade, it means that a new type of business (synthesis) is created through the merging of two opposing business forms (thesis and antithesis). The merger occurs because less successful retailers imitate the competitive advantages of their competitors in order to remain attractive to customers. This creates new forms of operation, as this behavior is assumed by all providers.

On the other hand, the market structure and phase theory approach refers to the difference in the type of business structure in different countries (cf.Tietz 1993: 1318f.). It comes about through a dynamic but specific market occupation equilibrium, which covers all alternatives on offer. All retail providers go through certain development phases, depending on the type of business. As interesting as the inclusion of cultural aspects appears, it must be pointed out that Tietz does not provide a more precise description of these phases (cf. Purper 2007: 53).

There are other theoretical approaches to describe and explain structural change in the literature. However, these were rarely dealt with in geographical trade research, as they hardly take spatial aspects into account. These include the

- macro-analytical approach (see Müller-Hagedorn 1995: 252),
- microeconomic approach (cf. Betancour / Gautschi 1986),
- holistic approach (see Glöckner-Holme 1988),
- Transaction-theoretical approach (cf. Coase 1937), as well as
- the theory of the Markoff chains (cf. Woratschek 1992).

However, there are also theories that combine different approaches. A contribution by Lange (1973) links the adaptation theory approach with the model of the life cycle of the operational forms. As a result, the exogenous environment is primarily influenced by spatial consumer behavior, while the company behaves depending on its phase segment in the life cycle. Although this approach offers explanations for the different development dynamics in centers of different hierarchical ranks, political factors and internal company decisions as well as mobility behavior are largely excluded (cf. Heinritz et al. 2003: 58).

Another combinatorial approach is the theory of spiral motion (cf. Agergärd et AL. 1968). According to this theory, the positive income development and increasing motorization lead to growing company sizes with improved parking facilities, as well as to a greater concentration of businesses. New forms of business arise because gaps in the market are filled by new providers who can better satisfy the growing quality demands. As a result, types of businesses are emerging with ever larger sales areas and catchment areas, which in turn results in a network thinning and concentration on higher-ranking centers. This theory shows, among other things, that large-scale establishments can replace centers (cf. Heinritzetal. 2003: 60).

2.3 Synopsis of selected studies

2.3.1 Analysis of the change in business practices in Taiwan

Up to now, the theories of the change in business practices have been tested mainly in western industrialized nations. That is why Savitt (1982) and Brown (1987) demanded that the theoretical approaches also be analyzed in developing and emerging countries. Shiu / Dawson (2002) followed this request and examined the life cycle theories and conflict theories for their applicability in the Taiwanese retail trade.

The Retail Accordion (sequence of generalization and specialization) was reviewed against the development of traditional grocery stores, supermarkets, specialty stores for edible oil and rice, and specialized grocery stores. The traditional grocery stores offer a limited range of fresh and processed foods and beverages and were the most important form of business in the food retail sector in the 1960s and 1970s. Its decline began in the 1990s due to competition from supermarkets and C-stores. The situation was similar for the specialty shops for rice and oil, which offered a limited range in large quantities, but which were gradually replaced by supermarkets in the 1980s (cf. Shiu / Dawson 2002: 70f.).

With the specialized grocery stores that have been around since the late 1990s, another example could be explained with the theory of the retail accordion. They have tailored their offer to special customer requirements, e.g. by specializing in vegetarian foods, uncooked meat or sashimi (raw fish prepared according to the Japanese style). Transferred to theory, two different processes can be recognized. On the one hand, there is a trend towards expanding the range, since general grocery stores have been displaced by supermarkets and C-stores;

The displacement theory approach appears to be less suitable for Taiwan, as supermarkets, C-stores and other food formats entered the market at a higher price level. In addition, the competition was conducted on a non-price level such as security, cleanliness and opening times. Although hypermarkets were launched in the low-price segment in the 1990s, they were not as a result of trading-up processes in supermarkets (cf. Shiu / Dawson 2002: 72f.).

Shiu / Dawson also does not see the theory of the life cycle as a suitable explanation of retail development in Taiwan. Supermarkets have come under greater pressure from the market entry of hypermarkets and C-stores. On the one hand, they have smaller operational dimensions than hypermarkets, but on the other hand they also offer less convenience than C-stores. They were able to prevent the postulated decline of the mature supermarkets through product differentiation and an increase in sales areas. The situation is similar for traditional markets, which have hardly any declining market shares when they are mature. In the 1990s, traditional markets were even added in Taipei as consumers continued to appreciate this form of supply. Six success criteria are named for this: Close seller-buyer relationships, convenient locations, large selection of products, the possibility of price negotiations, high degree of freshness through slaughtering on site and the flexible number of sales units (cf. Shiu / Dawson 2002: 73f.).

On the other hand, the polarization theory approach appears to be transferable to Taiwan. The theory explains the high growth of hypermarkets and C-stores during the 1990s (cf. Shiu / Dawson 2002: 74). The Crisis Response Theory is partially transferable as it has flaws in describing the overall retail development. For example, the reactions of owner-managed retailers to the success of the C-Stores can be explained. They took up a defensive stance when they asked the state to intervene because they found themselves flooded by 7-Eleven units in the residential areas. Furthermore, this approach describes the reaction of independent supermarket operators to the success of the large supermarket branches, as a result of which the Love Heart Alliance was formed (cf. Shiu / Dawson 2002: 75).

The dialectical approach can also be applied to Taiwan. Accordingly, a new form of supermarket, which sells fresh food (synthesis), developed from a traditional market (thesis) and an ordinary supermarket (antithesis). The former unique selling point of traditional markets, a large selection of fresh foods and flexibility in the choice of quantities, was taken over for the first time in 1996 by the two supermarket operators Lisi and Wangdefu. Another example is the development of mini supermarkets (synthesis) as a union of ordinary supermarkets (thesis) and C-stores (antithesis). A mini supermarket has an average sales area of ​​330 square meters and carries between 3000-4000 different items. Typical locations are isolated and small communities, where running normal supermarkets is hardly economically viable (cf. Shiu / Dawson 2002: 75f.).

Overall, the authors rate the conflict theories as being more suitable than the cyclical theories, although there are positive and negative examples for both approaches. The authors see the high generalization and strongly descriptive nature of the theories as problematic. In addition, they find that cultural influences do not pay enough attention to the development of the retail sector. However, the specific socio-cultural context limits the universal application of social science theories. For example, the still high religious ties of the communities (to Buddhism and Taoism) with the markets prevent their displacement. The markets originally developed around the temples, of which there are still around 10,000 in Taiwan today. In addition, in contrast to the west, the average distance from the suburbs to the inner-city areas is much shorter. This disrupts the location advantages of supermarkets in the city center and leads to an avoidance of trading-up strategies in order to maintain competitiveness (cf. Shiu / Dawson 2002: 76f.).

Furthermore, the models show a linear logic of Western understanding and therefore have problems in describing alternative synthetic ways of thinking in Eastern cultures. The emphasis on interpersonal relationships in Confucianism not only leads to a different approach to employees, but also influences the attitude of salespeople towards service to the customer. Furthermore, the supermarket alliance (Love Heart Alliance, Freedom Alliance, Sea Line Alliance) is a widespread form of business in Taiwan, similar to that in Japan. Therefore, cooperatives resist the power of chain-run hypermarkets and C-stores with a western business style (cf. Shiu / Dawson 2002: 77f.).

2.3.2 Change in daily consumption in Taipei

The work of Wu (2005) is dedicated to the genesis of food retailing in the global city of Taipei, which has transformed from a backyard of global production systems to a stage of global consumption. Embedded in global activities, the retail structure is changing as a result of socio-economic change to a post-industrial economic and social system. Its traces can be clearly seen in the cityscape through areas for consumption and entertainment. As a result of this development, a specific and pluralistic market structure has formed in the food retail sector, in which modern retail formats coexist with traditional retail formats. On the one hand, this is in contrast to Western countries, where modern retail formats have replaced the traditional ones, and on the other hand, it is in contrast to developing countries, where informal or traditional sales stands dominate (cf. Wu 2005: 167ff.).

The traditional food markets are still an important form of supply, the market practice of which was adopted from the Japanese colonial era. The state has been able to counteract the slow but steady decline in importance as a result of new forms of business such as supermarkets and hypermarkets through modernization measures since the late 1980s. However, the measures would be more successful if the city government had made higher demands on the supply facilities (cf. Wu2005: 170ff.).

The role of modern types of business must therefore also be reassessed. On the one hand, this is justified by their entry into the market, which took place at a high price level - which is why they were considered a showcase for a western lifestyle until the 1980s - on the other hand, they are smaller and for a long time only sold packaged food and usually had hardly any parking space. In addition, there is the special feature that several public supermarkets have been in operation since the 1980s. Car-friendly shopping based on the western model was only made possible with the introduction of hypermarkets at the end of the 1980s. With large parking lots and locations on the outskirts of the city, they changed shopping habits like no other retail format (cf. Wu2005: 174ff.).

Despite the growth of modern types of business, a new and at the same time traditional form of trade has established itself in Taipei since the 1980s. Evening markets belong to the informal sector and have spread to residential areas despite state repression. Its success is attributed to the desire of the population for a lively street scene as well as socio-economic developments (such as the increased employment of women or the changed eating habits) (cf. Wu 2005: 180ff.).

The author compares the current retail development with that in the USA and Western Europe 50 and 30 years ago. However, the resistance of traditional retail formats and government intervention are a special feature. Influencing factors are, on the one hand, the different market culture in East Asia, with a high level of importance of fresh food and lively interactions between seller and buyer. On the other hand, these markets also offer a field of activity for socially disadvantaged groups of the population. In addition, state intervention shows a high degree of ambivalence, which is expressed in the definition of markets in urban planning, but also in the suppression of street vendors (cf. Wu 2005: 184ff.).

Another argument for the specific retail development are the different effects of globalization. The consequence of this is a decline in traditional market practice as well as a shrinking variety of providers as a result of increased corporate concentration.

“As might be expected, although these modern markets share the same names as supermarkets or hypermarkets and do business in similar ways [...], in effect they connote very different social and cultural meanings in Taipei than in Western cities” (Wu 2005 : 187).

The structural change cannot be explained solely by the supply side, but has to be supplemented by the changed lifestyles and household structures. The diversified and pluralized shopping and consumption habits can no longer be covered by individual formats, which has led to an increased variety in the food retail sector (cf. Wu 2005: 188f.). Overall, the author establishes a competition between

- formal and informal retail formats,
- publicly and privately managed formats, as well
- traditional and modern forms of business.

In his view, modern western retail formats bring a wider range and better service to Taiwan, but modern retailers tend to be fixated on the product, while traditional retailers still emphasize the interpersonal component. In addition, as a result of the chain store, there is a monotonous and impersonal retail structure. Wu is particularly critical of the flooding of Taiwan with C-stores:

“In the last 20 years, for instance, international and national convenience store chains, such as 7-Eleven, Family, Life, and OK, have swept the island, first in the metropolitan areas and later in small towns and cities, and forced independent, small corner shops and grocery stores close. [...] These standardized brands have reduced the personal social connections of daily shopping and consumption to anonymous and impersonal commodity relations of market exchange in a highly standardized environment, changing a community activity into a pure economic exchange ”(Wu 2005: 190) .

2.3.3 Development of the Taiwanese convenience stores

In their contribution, Chang / Dawson (2007) devote themselves to the development of C-stores in Taiwan and highlight the factors for the successful adaptation of a foreign retail format. In their opinion, C-stores were an important source of inspiration for the modernization of the retail sector, as they brought innovative management and inventory control systems into Taiwan (cf. Chang / Dawson 2007: 18f.).

The retail development model according to Dawson (2001) was used as the starting hypothesis. Accordingly, innovation, like new technologies and management ideas, is the main driver for the development of new types of business. This approach is particularly suitable for explaining the development of modern retail, as its focus is on sales and economies of scale. This was supplemented by findings from international franchising, the success of which depends in particular on cultural and economic determinants between the host country and the franchisor (cf. Alon / McKee 1999a, 1999b; Michael 2003; Alon 2004). In contrast to other retail formats, C-stores enter the market and expand through franchising and knowledge transfer. When expanding the store, mandated and authorized franchising prevailed over voluntary franchising. The most important reason for this is to be seen in the higher power of the company headquarters over the management of the shops (cf. Chang / Dawson 2007: 20ff.).

Chang / Dawson (2007: 25ff.) Attribute political, economic, social and technological factors to the successful adaptation of this type of business. Due to the opening of the service sector, international companies have been able to stimulate the retail market. In economic terms, the increased per capita income and the associated increased expenditure contributed to the success. In the social area, the entrepreneurial ambition of the Taiwanese people and the growing popularity of ready-made meals are highlighted. In contrast, in the technological area, the use of the most modern inventory management and distribution methods are important for success.

The authors divide the development of the C-Stores into three phases. The introductory phase from the late 1970s to the late 1980s is characterized by the testing of the most successful expansion model. In the second phase, which lasted until the mid-1990s, the growth in sales ultimately inspired new providers to enter the market.Furthermore, the market was further deregulated and the distribution system was fundamentally modernized. In the third phase after 1995 the market increasingly consolidated. The industry recorded high growth as the range of services was expanded and the network of locations expanded to the remaining regions in the east of the country (cf. Chang / Dawson 2007: 27ff.).

The peculiarities of the Taiwanese C-store retail trade are based on the one hand in the franchise system and on the other hand in the high degree of concentration of the providers. The authors see the innovation performance within the industry as positive, such as the inclusion of various sales channels and especially e-commerce, or the extensive service and the expanded product range in the catering sector. In conclusion, Chang / Dawson state that the takeover of this international trading concept was a success because it was followed by a successful market adjustment. In addition, the study confirms Dawson's retail development model, as innovations in management and at the technological level in particular have led to increased productivity (cf. Chang / Dawson 2007: 33ff.).

2.3.4 Criticism of franchising in convenience retail

Wu (2010) addressed the franchise system of Taiwanese C-stores from a sociological perspective. He investigated whether franchise operations can help people become entrepreneurs within the capitalist economic system. The author answered this question through an analysis on three levels. When looking at the overall development of the retail sector, he found that the food producers entered the retail market with the help of franchise operations in particular in the 1980s. From this, from the mid-1990s, an oligopoly of strong retail businesses emerged, which pushed the small and owner-run grocery stores out of the market.

Secondly, Wu does not find the investigation of the retail trade as pure consumer research to be meaningful. He argues that labor market studies provide a more suitable framework for studying the c-store industry, as the success of this system is largely based on devaluing franchisees in favor of sales and decision-making power of headquarters. According to this, branch managers or store managers are less self-employed than supervisors who have to make decisions at higher operational levels (cf. Wu 2010).

Thirdly, the franchise system leads to a consolidation, not only of the market power of the producers, but also to a consolidation of despotic power mechanisms within the labor market. Ultimately, the result of his hypothesis is that the franchise operation does not help to achieve real independence - Wu even describes this state as pseudo-independence. In addition, the weak state regulation leads to a kind of toleration of these power relationships, since the franchise system is only neglected in Fair Trade Law (cf. Wu 2010).

3 Development of the retail structure in Taiwan

3.1 Geography of Taiwan (Republic of China)

Taiwan (Republic of China, formerly Formosa) is located 160 km east of mainland China in the middle of a chain of islands that stretches from Japan in the north to the Philippines in the south. The territory includes several small islands, including Penghu (Pescadoren), Kinmen and Matsu, as well as the southeastern Orchid Island and Green Island. With an area of ​​35,834 square kilometers, Taiwan is roughly the size of Baden-Württemberg. While the eastern part of the country is traversed by a mountain range over 3000 m high, the western part is characterized by a flat and fertile coastal plain (see Fig. 1). Since 60% of the area is forested and the mountains cover around two thirds of the island, only a quarter of the land can be used for agriculture (cf. CEPD 2010).

Most of Taiwan is within the subtropical climate zone, the south is already in the tropical climate zone. In addition, Taiwan is under the influence of the monsoons and is threatened by typhoons in the summer. The location at the subduction zone between the Eurasian and Philippine plates is the reason for recurring earthquakes. Apart from marble, Taiwan has only a few natural resources and is therefore dependent on imports of coal, natural gas and oil for its energy supply (cf. Schubert 2003: 739ff).

With a population density of 640 inh / sq km, Taiwan is one of the most densely populated countries in the world (DGBAS 2011a). Due to the topography, most of the settlements are along the west coast. Of the total of 23.2 million inhabitants, 70% live on less than 20% of the country's area. The two largest cities are Taipei in the north with 2.6 million inhabitants (TCG 2011a) and Kaohsiung in the south with around 2.3 million inhabitants (KCG 2011).

The population growth has meanwhile slowed down, which is increasingly leading to an aging problem (cf. Schubert 2003: 740). In the age structure of 2010, 10.7% are over 65 years of age. The proportion of the working population aged 15-64 is 73.6%, while those under 15 make up 15.7% (DGBAS 2011a). Ethnically, the Han Chinese population makes up the majority with 95%. In contrast, the Han migration over the past three centuries has displaced the habitat of the Austronesian indigenous people into the mountainous regions of Taiwan (cf. GIO 2010).

Figure not included in this excerpt

Fig. 1: Geographical location of Taiwan

3.2 Elements of structural change

3.2.1 Economic and political development

The development of the Taiwanese economy, and thus of the retail sector, is a legacy of both Chinese market culture and Japanese urban planning (cf. Trappey / Lai 1996: 31). Trading activities began in the 17th century after the first large wave of migration by farmers from Guangdong and Fujian (cf. Schubert 2003: 40). The Chinese settlers built ports along the west coast to supply Taiwan with labor and to export raw materials from the hinterland. Taiwan's internationalization began after China's last imperial dynasty, the Qing Dynasty, lost the Opium War against allied Western powers. In the Treaties of Tianjin in 1858, the Qing government had to open the ports to foreigners to give them access to natural resources such as camphor. During this period trade flourished and agriculture grew along the fertile east coast and river banks (cf. Trappey / Lai 1996: 31f.).

After the defeat in the Sino-Japanese War in 1894/95, China had to cede the province of Taiwan to Japan (cf. Schubert 2003: 41). During the Japanese colonial period (1895-1945) trade was limited to the Japanese ports. In addition, Taiwan was developed economically and its infrastructure expanded. To increase the efficiency of the Taiwanese market, the colonial administration introduced urban planning and installed a network with agricultural associations and markets (cf. Trappey / Lai 1996: 31f.). After the end of World War II, Taiwan was returned to the newly established Republic of China.

After the nationalist government of the Koumintang (KMT) lost the Chinese civil war (1945-49) against the communists, there was a second mass immigration in 1949. Up to 2 million soldiers and civilians fled the mainland to Taiwan with Generalissimo Chiang Kaishek. The rule of the KMT was marked by the threat from the People's Republic of China (PR China). With the aim of retaking mainland China, the authoritarian government drove forward economic development. After agricultural productivity was increased through a land reform, industrialization followed the strategy of import substitution (cf. Schubert 2003: 741). The land reform forced wealthy large landowners to make land available for industrialization and compensated them with shares and loans. As a result, the cement, 3 development of the retail structure in Taiwan developed

Textile, clothing, plastics and manufacturing industries. The economy grew through state export subsidies and support for strategic industrial sectors, as well as the work ethic of the population (cf. Trappey / Lai 1996: 32).

After the peak of industrialization was reached in the 1980s, there was also a political paradigm shift. Growing domestic and foreign policy pressure paved the way for political reforms. The establishment of political relations between the USA and the People's Republic of China in 1972 led to foreign policy isolation. In addition, the extra-parliamentary opposition formed the Democratic Progressive Party (DPP) in the mid-1980s. In 1987, after almost 40 years, martial law was repealed and democratization began. After further political reforms, the first free elections were held in Taiwan in 1996 (cf. Schubert 2003: 742).

The emerging liberalization also set impulses for economic development. Taiwan was opened to trade and communication with mainland China. At the same time, massive government funding was invested in research and development and the production of high-tech products began. GDP per capita was around USD 3,000 in the mid-1980s (cf. Ho 2008: 77), while the secondary sector contributed 47% to GDP. Thereafter, the proportion steadily decreased to 29.1% by 2010 (DGBAS 2011a). Today, information and communication technology is one of Taiwan's most important industries. A large part of the added value is generated in the state-funded science parks (cf. GIO 2010). In contrast, the labor-intensive branches of industry have been in decline since the 1990s. Due to the increased wage costs, more and more production companies have relocated abroad, especially to the PRC. The importance of private entrepreneurship has also increased significantly, from which small and medium-sized businesses in particular have benefited (cf. Schubert 2003: 743).

The tertiary sector's share of GDP has risen steadily since the 1980s (see Table 1). Towards the end of 2010 the sector reached 69.3% and employed a total of 58.8% of all employed persons (DGBAS 2011a). The finance and insurance industry as well as the real estate industry grew particularly (cf. Schubert 2003: 743). The one-sided concentration on the industrial sector led to a neglect of the service industry, especially the retail market.

Tab. 1: Taiwan's main economic indicators

Figure not included in this excerpt

Source: Own calculation according to DGBAS (2011b)

Until the 1980s, it still had features from the era of the first Chinese settlers and the Japanese colonial era. Until then, the retail structure and distribution system were mainly influenced by agricultural associations and markets as well as industrialized large landowners (cf. Trappey / Lai 1996: 32). However, this changed due to the growth of middlemen and wholesalers, but above all due to the market entry of international retailers (cf. Ho 2008: 77).

Since the liberalization at the end of the 1980s, Taiwan has risen to become one of the most important trading partners and investors of the People's Republic of China (cf. Trampedach 2003: 745). Therefore, the economic development depends very much on the political relations with the People's Republic of China. Under the government of the DPP (2000-2008), for example, there was a political cooling off between Taiwan and mainland China, as the DPP pursued a policy of Taiwanese independence. In contrast, the current government of the KMT is relying on greater political and economic integration with China. The trade agreement, which has been in force since 2010, provides, among other things, for the reduction of import and export duties and the opening up to Taiwanese service providers on the Chinese mainland (see Spiegel Online 2010). The second and third most important trading partners are the USA and Japan.

3.2.2 Developments on the demand side

Shopping behavior is shaped by income, mobility and individual influences (cf. Kulke 2005). These influences have changed significantly over the past few decades as a result of political, social and economic developments.

Economic growth has contributed significantly to an increase in income. The disposable income per capita per year was still under USD 700 in the mid-1970s and has since increased to just under USD 8,000 per year today. In the long term, spending on basic consumer goods has increased in absolute terms, but has decreased in percentage terms (see Fig. 2). According to this, the share of expenditure on food and beverages was around 40% in the mid-1970s, but has since fallen to around 16% today (DGBAS 2011c). According to the law of the Engel curves, the increased income has increased the demand for higher quality goods in particular (cf. Engel 1857). From the 1980s onwards, there was increasing demand for branded products, fashion clothing, luxury vehicles, but also services to improve quality of life (cf. Trappey / Lai 1996: 33).

The growth in prosperity also led to greater mobility among the Taiwanese population. In the mid-1980s, there were only 71 cars per 1,000 people in Taiwan. Since then, this value has grown to almost 300 cars per 1,000 people by the end of 2010 (see Tab. 2). A Taiwanese peculiarity is the large number of motorcycles of all sizes - almost every household has one. At the end of 2010 there were a total of more than 14 million mopeds and motorcycles (DGBAS 2011d). The load on road traffic was reduced somewhat with the completion of the subway network in Taipei in 1996 and in Kaohsiung in 2008 (TRTC 2011; KRTC 2011).

However, shopping by private car only became popular from the late 1980s, when the first hypermarkets on the urban fringes offered large parking spaces. At the same time, people have less time to shop due to longer working hours and the increased workload of women. The increased mobility and the reduced time budget thus increased the need for coupling in the procurement process. This is one of the reasons why weekend shopping and one-stop shopping by car have become more popular. On the other hand, people used to regularly go to the grocery store or the traditional market in the surrounding neighborhood for supplies (cf. HO 2008: 79). The socio-cultural change ultimately led to the fact that the traditional procurement processes can be undertaken by fewer and fewer people.

Figure not included in this excerpt

Fig. 2: Development of expenditure in Taiwan since 1976

In addition to the consumer's room for maneuver, which is defined by income, mobility and time budget, individual attitudes influence shopping behavior (cf. Heinritz 2007: 702). These attitudes depend on income, age, level of education and household size (cf. Kulke 2005). In addition to the increased income, the social and political upheavals have influenced shopping behavior. With the dawn of the post-Fordist era in the 1980s, a process of democratization began at the same time. In the following phase of political and economic liberalization, the market for foreign direct investment (FDI) in the service sector was opened. This enabled an “individualized multi-optional consumer” to develop in Taiwan (Litzenroth 1997). A tentative pluralization of shopping behavior began as early as the 1970s when the first supermarkets and department stores opened in Taiwan. But these did not appeal to the broad mass of the population at the time, but rather to a wealthy social avant-garde who wanted to maintain a western lifestyle (cf. Wu 2005: 175).

Tab. 2: Mobility development in Taiwan

Figure not included in this excerpt

Source: DGBAS (2011e)

The different consumer behaviors are currently differentiated into adventure shopping, convenience shopping, price shopping and environmental shopping (cf. Kulke 2005: 16ff.). With adventure shopping, the supply process is linked to leisure activities such as going to the cinema or restaurant. This can best be achieved in large retail centers with an attractive range of services (cf. Kulke 2010a: 225). One such offer has been realized with the Xinyi Shopping District in Taipei. In addition to a huge Mitsukoshi Department Store spread over several buildings and the Taipei 101 Shopping Mall, there is a cinema complex, various restaurants and a concert hall on the site (see photo 1).

Another trend is convenience shopping, which is geared towards good temporal and geographical accessibility (cf. Kulke 2010a: 225). In addition, families in Taiwan increasingly prefer to shop in clean and comfortable facilities (cf. Ho 2008: 79). A market analysis by Carrefour Taiwan found that consumers insist on convenience and shopping speed due to the high population and C-store density (Economic Daily News, July 10, 2005: A7; quoted in Ho 2008: 79). The high level of convenience is also expressed in the method of payment. The current generation is increasingly using credit cards when shopping (Retailing in Taiwan 2004; quoted in Ho 2008: 79). On the other hand, the popularity of ready-to-eat products (convenience food) has increased. The reasons are the increased number of single households and working women (cf. USDA 1999).

As a result of the change in values ​​and the changed eating habits, environmental shopping is also gaining in importance. This is expressed through an increased awareness of a healthier diet, which is why attention is paid to production and ingredients (cf. Kulke 2010a: 225). While product freshness has traditionally been given a high priority, there has been an increasing demand for health products for some time (cf. USDA 2001). In addition, price shopping and the type of smart shopper are also increasing in the urban population. While price buyers prefer retailers with particularly cheap offers, smart shoppers look specifically for cheap offers (cf. Kulke 2010a: 225). The discount concept has only been increasingly used by the Taiwanese supermarket operator PX-Mart for about a decade. The larger range of lower-priced own brands is also still a recent phenomenon. It is estimated that these can achieve a price advantage of up to 40% compared to conventional products (cf. USDA 2003).

Figure not included in this excerpt

Photo 1: Xinyi Shopping District in Taipei City

3.2.3 Influences from the planning side

In addition to economic and social developments, retail is also influenced by politics. The use of spatial planning instruments has an impact on the structure and development of the retail landscape. This becomes clear in an international comparison. While the retail sector in the USA is hardly subject to any restrictions in terms of location development, in Germany the development opportunities in the urban area are limited (cf. Kulke 2010a: 226). Spatial planning in Taiwan, on the other hand, is faced with a completely different challenge. Due to the shortage of space, the individual land use activities are in intense competition with one another. Economic, social and ecological conflicts of use need to be resolved here.

In Taiwan, the most important instrument is the General Zoning Regulation, which provides guidelines for city maps of cities and districts. One level below is the Taiwan Province Zoning Regulation. In the new version of 2000, Article 29 stipulates that urban planning must serve prosperity and population growth (quoted in ECCT 2010). However, the city maps in Taiwan are incoherent with each other, as the implementation is the responsibility of the respective cities and districts. A binding division of the land use takes place in urban planning via the zoning plan (Zoning Law), which defines the possible retail locations.

In Taipei City, a total of twelve different categories of land use are distinguished, five of which are approved for retail (TCG 2002). These are mainly residential and business districts, and to a limited extent also zones for industry, 3 development of the retail structure in Taiwan universities and schools, as well as natural landscapes. The levels of demand that can be offered in the individual zones depend on the range offered and not generally on the size of the sales area. However, the classification of the requirement levels is not as clear as, for example, in the German legal area:

- Products for everyday use
- Normal A: short-term, medium-term and long-term needs, excluding food and beverages
- Normal B: medium-term, long-term and special needs
- Special A and B: long-term and special needs

Traditional markets are cited separately, and may be set up in both commercial and most residential areas. Retailers who only sell everyday products are allowed to set up shop in all of the zones mentioned. Exceptions are some residential areas where retail is not permitted. The product categories Normal A and B are allowed in the business zones and in some residential areas (TCG 2002).

However, there are also restrictions in Taipei that modern retailers in particular are confronted with. This prevents the construction of larger sales areas in residential areas, as Article 16 of the Province Zoning Regulation allows the use of only one basement. In addition, the expansion of retail trade in industrial zones is restricted as Article 18 of the Province Zoning Regulation sets a quota for retail use at 50%. It also regulates the size of the sales area and the number of floors (quoted in ECCT 2010).

In addition, the state has been actively involved in upgrading the retail sector. This is particularly evident from the implementation of retail modernization in the mid-1980s. The modernization brought advantages for the distribution sector and opened the market for international retail companies. Also significant are the 2004 Developing Chain Retailing Plans by the Department of Commerce, Ministry of Economic Affairs Taiwan. This plan aims to create an attractive retail environment, further training measures for employees, a strengthening of the quality of operational service and e-commerce, as well as support for the internationalization of Taiwanese retail companies (cf. Ho 2008: 81).

3.3 Structure of the Taiwanese food retail sector

3.3.1 Features and special features

In Taiwan, retail has not only changed relatively quickly, but has also developed its own specific structure. While owner-operated grocery stores, traditional grocery markets and street stalls dominated before the 1980s, modern types of business have increasingly gained market share since then. Modern food retailing is made up of the formats supermarket, hypermarket and C-store (see Fig. 3). State or municipal supermarkets are a special form. Most department stores, which look more like shopping centers due to their size and the many floors, have supermarkets in the basement with a wide range of gourmet products for a discerning customer segment (cf. USDA 2001). But the main focus of their product range is on the clothing retail sector.

In Taiwan, supermarkets sell groceries according to the self-service principle and have a sales area of ​​less than 2,500 square meters (DOC 2004). Hypermarkets have a large range of food and non-food items with at least 2,500 square meters of sales area and ample parking space (cf. Wu 2005: 169). Above all, the omnipresent C-stores have become an integral part of the cityscape. Since entering the market 30 years ago, this type of business has been able to occupy every available retail space. In some cases, the individual branches are only a few meters apart, as the leading providers want to cover every suitable location as far as possible (see Photo 7). The growing number of C-stores has almost completely displaced the owner-operated grocery stores from the urban retail market (see photo 2). That is why they can almost only be found in smaller cities or rural regions (see USDA 2000).

In contrast, the traditional markets have been able to hold their own until today. It has been predicted that after three hundred years of retail evolution, modern types of business will replace traditional retail in less than half a century (cf. Trappey / Lai 1997: 214). It is true that traditional market forms have slowly lost their market share in sales of food. Nevertheless, traditional retail continues to play a major role in supplying the population (cf. Wu 2005: 180f.). This is also reflected in the increased number of so-called mixed consumers who shop in both traditional and modern retail formats (cf. Lin 2003; quoted in HO 2008: 82).

Figure not included in this excerpt

Fig. 3: Structural breakdown of the Taiwanese food retail sector

The high dynamic growth in retail has led to intense competitive conditions. From the mid-1990s to the beginning of the 2000s, the share of food sales in traditional markets fell from over 40% to below 30% (cf. Trappey / Lai 1997: 214; Shiu / Dawson 2001: 71; TCFA 2002). The inter-formal competition in modern retail formats is just as rapid (see Fig. 4). In the 1990s, supermarkets felt particular pressure from competition from hypermarkets, C-stores and street markets. However, upgrading and adjustment measures prevented another crash and were able to regain market share from hypermarkets. In contrast, the convenience market has grown steadily (cf. MOEA 2011).

After high growth rates, the retail sector has since been increasingly in a phase of saturation. The high turnover growth of the modern types of business over the 1990s of around 15% per year has fallen to around 4% per year after the turn of the millennium (cf. MOEA 2011). The high level of development dynamics brought with it an increasingly intense competitive situation. Market consolidation and retail concentration were accompanied by market exits and takeovers. At the same time, the Taiwanese retail industry became a highly internationalized market. There is a surprising number of transnational companies among the market leaders. A particularly large number of operators come from Hong Kong or Japan. This can be explained by the geographical and cultural proximity (cf. Hollander 1970; Kacker 1985). The only major western player is the French company Carrefour.

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Fig. 4: Development of market shares in the food segment

If the formats are not related to specific locations, they are evenly distributed across the city. The retail trade is largely oriented towards the distribution of the population. Due to the high settlement and population density, unlike in Europe or North America, there are hardly any non-integrated locations in which large-scale retailers could have settled. Due to the high level of urbanization over the past few decades and due to Taiwan's topography, the settlement areas are increasingly reaching their limits. Larger areas are freed up mainly through the conversion of former industrial areas. Due to the high mix of land use, these areas are not necessarily located on the outskirts of the city (cf. Wu 2005: 169).

In addition, supply close to home plays an important role in society. If anything, it is complained that the new forms of retail business are not being given enough space to meet the increased demand. For example, the position paper of the European Chamber of Commerce recommends a more generous regulation for the rededication of former industrial areas for retail and the removal of the restriction of one floor space in residential areas (cf.

With regard to the individual types of business, however, there are variations in the location distribution (see Tab. 3). While traditional markets focus on the city centers, especially in older parts of the city, evening markets and street stalls sell their goods directly in the residential areas.

Tab. 3: Characteristics of the types of business in the food sector

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Source: CDRI (2010)

C-stores can be found in the entire city area and supermarkets are located both in the city center and on the outskirts. In contrast, hypermarkets tend towards the outer city areas and suburbs, such as New Taipei City or Taoyuan County. However, recently hypermarkets are increasingly drawn to the city center or development zones (cf. Wu 2005: 169f.).

Another characteristic of Taiwanese retail is the liberal handling of opening hours. Since Sunday is not a day of rest in East Asian cultures, the shops are also open continuously on weekends. The opening times here usually extend well into the evening. In addition, an increasing number of supermarkets and hypermarkets have an operating time of 24 hours (cf. Wu2005: 169).

3.3.2 Resistance of traditional market forms

Wu (2005: 169) defines traditional retail markets as a collection of stalls selling fresh and prepared everyday groceries. They are usually open during normal business hours from morning to evening. They can be further subdivided into private, state and temporary markets. The state markets are subordinate to the respective city administration and are set up at locations indicated in the city map. The sales area is subdivided into small units or stands and is rented out by the city to the sellers (see photo 3). State markets often have a better quality shopping environment than privately run or temporary markets (cf. Wu 2005: 169f.). Private markets are operated by private investors, who are mostly the landowners, on their land (see photo 4). You commission small dealers with the organization and register with the city administration. In the case of temporary markets, on the other hand, the street stalls only receive a temporary legal status as long as they stay in a certain location. These are mostly rarely used public properties or roadsides (cf. Wu2005: 170ff.).

The fact that traditional markets are designated as public neighborhood facilities in urban planning, similar to schools or hospitals, reflects their importance for collective care. The state regulation of markets is a legacy of the Japanese colonial era, which was introduced and maintained for reasons of hygiene, public order and ensuring tax revenue. Before the Japanese government outlawed private street vendors, they were the most common grocery store in Taiwan. This is why the public markets were mostly visited by Japanese housewives at the time, while the private markets were preferred by Taiwanese men - Taiwanese women were restricted in their personal mobility due to their bound feet. Among other things, this fact ensures the widespread use of mobile street vendors who stop right in front of the front door (cf. Wu 2005: 171f.).

After World War II, legal supervision was taken over by the ruling KMT and has only changed little to this day. The number of traditional markets grew strongly between 1950-1970, which is why this phase is also considered to be the heyday of traditional markets. As a result of the competition from modern forms of business in the 1980s, the outdated state markets were modernized and their sales area increased. In addition, the markets were combined with other public facilities in order to maintain their central position within the residential communities. Despite modernization measures, the market share has slowly declined. In 2002 there was already a vacancy rate of 40% in the public markets (DBAS 2003). However, the decline is less due to the quality of the shopping environment than to the slow adjustment measures to rapidly changing shopping habits. While working women prefer to shop at the weekend, older customers have problems with the expansion of the markets over several floors (see Wu2005: 172).

Another traditional form of market are the evening and night markets. However, night markets are more important in the context of tourism and leisure. Evening markets are defined as street stalls that are open from late afternoon to evening (3pm to 7pm) and, similar to public and private markets, sell groceries and simple household items. Typical locations are sidewalks on small or less busy back roads. As a rule, the stands are not covered. They resell the leftovers from other markets, the qualitatively poorer surplus goods, at cheaper prices (cf. Wu 2005: 182). This type of market did not emerge until the mid-1980s and is only found in Taipei. In other cities, they are covered and positioned on private land away from the street. They differ from one another both in their size and in their choice of location. The evening markets are organized by the individual sellers by assigning their seats to each other and collecting money for the supply of electricity, water and hygiene (cf. Wu 2005: 182f.).

Due to their legal status, they have not been researched, nor do they appear in official statistics. However, due to their widespread use and low prices, they are important for local supply. In addition, they reflect the post-modern development of society. This manifests itself on the one hand in the increased employment of women, on the other hand in the overall longer working hours. Since evening markets also offer a wide range of ready-made meals, they are also an indicator of changed eating habits and increased demands on convenience. In addition, there is the desire for traffic-calmed zones and the still high popularity of a lively street scene (cf. Wu 2005: 183f.).

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Photo 2: Owner-run grocery store in a residential area of ​​Taipei

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Photo 3: Taipei State Food Market

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Photo 4: Taipei private food market

3.3.3 Development phases of the supermarkets

The characteristics of Taiwanese supermarkets are different from Western supermarkets in terms of both geography and economics. They are relatively small and usually have no parking spaces. Their development in Taiwan can be divided into three phases: emergence, growth and maturity (cf. Wu 2005: 174). In addition, an increasing differentiation into discounters and quality supermarkets can be observed. From a global perspective, supermarket growth in Taiwan falls under the second of four waves of expansion that hit East and Southeast Asia in the 1980s (cf. Reardon et al. 2004: 171).

The first retail stores that resembled supermarkets were built in the 1960s by the government and the military and were called PX stores (cf. Trappey / Lai 1997: 214). The first private supermarket Ximen (West Gate) opened in 1969 in Taipei's traditional city center of the same name. A short time later, another supermarket called Dinghao followed east of the new city center. The privately run supermarkets were the first to introduce the self-service concept and price labeling in the retail sector. For technical reasons, however, they could not carry perishable goods in their range at that time, only packaged and frozen foods (cf. Shiu / Dawson 2001: 71). When the Xinxindazhong department store incorporated a supermarket in the basement in 1972, other department stores copied this concept. This is why supermarkets were primarily part of department stores from the 1970s to the early 1980s. Since at that time department stores mostly sold items in the high-price segment, the supermarkets of that time were also seen as showcases of a western lifestyle (cf. Wu2005: 174).