Top 2000 Survey: Service Industry
Rise of Food Industry Darlings
In 2013, the keys to growth in Taiwan's service industry were innovation and refinement. Most notable was a select group of stars in the food services industry.
Rise of Food Industry DarlingsBy Whitney Huang
From CommonWealth Magazine (vol. 547 )
Last year Taiwan's economy was dismal. For the service industry, where supply exceeds demand, consistently winning over consumers' favor is a momentous challenge. Still, the big winners among this year's CommonWealth Magazine Top 2000 Survey managed to achieve even better results than a year before.
Among the 650 service industry names to make our 2013 list, profitability averaged 7.38 percent, an improvement over the previous year's 6.92 percent.
Few changes transpired among the top 10 in the service industry over the past year, other than Acer's drop from fourth to fifth place due to poor operations and substantial losses. Acer was also the only name among the top 10 that suffered double-digit revenue losses.
Mercuries and Associates, whose operations span retail, finance and food services, achieved 15 percent revenue growth last year to stand atop the top 10.
Automobile market leader Hotai Motor Co., aggressively promoting its "service that touches hearts," saw growth in both revenue and profitability to jump from twelfth place in 2012 to tenth, squeezing China Airlines out of the top 10, to eleventh place.
Although China Airlines showed slight growth, it is worth noting that it experienced disappointing profitability, resulting in net after tax losses.
Meanwhile, rival Eva Air climbed to number 13. While still behind in terms of revenue, it out-performed China Airlines in terms of revenue growth and profitability, ensuring intense competition in the skies up ahead.
Food Service Darlings on the Rise
The stage belongs to those with the courage to strike out on their own path. The same holds true for the fate of whole industries.
When the electronics industry ruled the roost it made a lot of techies rich. However, the successive public listing and trading of such chain food and beverage industry firms as 850 C. (Gourmet Master Co. Ltd.), Wowprime Co., Ltd., and An-Shin Food Services Co., Ltd. marked the rise of new food and beverage services darlings, erasing people's established impression that nothing substantive can be built from selling one cup of soup or coffee at a time.
The top 100 companies in our service industry ranking demonstrate the explosive might of the food and beverage services sector.
Gourmet Master and Wowprime both made the Service Industry Top 100 (based on revenue), ranking 97th and 100th, respectively. They were notably the only two food and beverage enterprises to do so.
Wowprime's revenue ranking leapt from number 179 in 2011 to number 119 in 2012, and again to one hundredth place last year.
"One day our employees will be able to hold their heads high when they hand out their business cards," said Wowprime chairman Steve Day in an interview with CommonWealth Magazine many years ago. Sure enough, company staff have long felt the sense of pride he spoke of.
E-Commerce, Bridging Virtual and Real to Seize Markets
Enterprises in the department store retail industry, once the most vibrant champions of retail sales, have been dealt the hardest lesson from e-commerce vendors descending from all sides exchanging their inventory for quick cash.
"The concept of total sales channels is the future, rapidly connecting virtual and physical channels," relates Jessica Yang, director of the Institute for Information Industry's Innovative DigiTech-Enabled Applications & Services Institute.
Yang stresses that as physical channels become increasingly saturated, businesses seeking growth must employ all available channels to seize business opportunities and reach their true target consumers. Further, they must satisfy consumers' needs, or even create new demand.
Reflecting this trend, an E-commerce category has for the first time been added to the Service Industry section of the Top 2000 Survey, now including such names as PChome and books.com.tw.
PChome has experienced continual expansion, steadily propelling its revenue ranking from number 107 in 2011 to 86 last year.
In a recent interview, PChome chairman Jan Hung-Tze said he sensed greater activity and prosperity across Taiwan's on-line industry throughout all of last year. He also noticed that physical industries, be they product manufacturers or brick-and-mortar sales channels, are determined to get into e-commerce.
"Over the next several years, extraterritorial e-commerce transactions will comprise a key component of e-commerce development," Jan predicts.
Taiwan's service industries account for 70 percent of GDP and employ 60 percent of the workforce. As economic growth slips, businesses are faced with the challenges of tapping into a bigger market and getting closer to consumers to achieve good results.
Translated from the Chinese by David Toman