The promising consumer market in the Chinese mainland is attracting Taiwan companies to make bigger investments while their mainland counterparts are looking for deeper cooperation.
Shin Kong Mitsukoshi, a leading department store in Taiwan, has unfolded its investment plan in the mainland after its first joint venture in Beijing reported good profits.
Wang Ching-chia, vice president of the company' s mainland division, told a cross-Strait business forum on Tuesday that it will open a department store in Chengdu, capital of southwest Sichuan Province, and another one in Suzhou, in east Jiangsu province, in 2014.
Another new store will open in Chongqing Municipality in 2015, Wang added.
"The mainland's retailing market has grown very fast, so in the next five years we can see bigger business potential because the mainland has worked to change the export-oriented economic structure and boost the local consumer market," he said.
Shin Kong Place, the company's joint venture with the mainland retailing giant Beijing Hualian Group, was one of the most profitable department stores in the mainland last year. Its annual revenue reached 4.8 billion yuan (727 million U.S. dollars) in 2010.
The figure this year is expected to be 5.6 billion yuan, Wang said.
In the next few years, Shin Kong Mitsukoshi will focus on provincial capitals and rich cities in the coastal region as the competition in big cities like Beijing and Shanghai has become severe, he said.
While Taiwan's retailing companies eye the mainland market, mainland department stores are interested in Taiwan suppliers.
At the same forum, Du Baoxiang, vice president of Wangfujing Group, said he expects more Taiwan brands to enter his stores.
"Most brands in our stores are from Europe, North America, Japan and the Republic of Korea, but Taiwan brands are still very few yet they have good potential," he said.
The revenue of products from Taiwan companies in Wangfujing's stores accounted for about 1.5 percent of the stores' total revenue.
Wangfujing is interested in food products from the island, Du said.
It bought products from Taiwan, mainly foods, worth 2 million yuan last year, and the figure will reach 3 million yuan this year.
Du also suggested that Taiwan's garment brands will have a good market in the mainland, and they should make greater efforts in promotion and image building.
"We prefer Taiwan companies opening their own shops in our stores than selling through wholesalers," he said.
2011 is the first year of the mainland's 12th Five-Year Plan of economic and social development, during which the mainland has stressed transforming the economic development pattern, expanding domestic consumption, and developing energy-efficient and low-carbon industries.
Besides retailing, many more Taiwan businesses believe the mainland will provide bigger changes over the next five years.
Joseph Fu-Hsiong Cheng, vice chairman of Taiwan Electrical and Electronic Manufacturers' Association, suggested that LED lighting and photovoltaics companies across the Taiwan Strait will have a bigger say in the international market if they can forge industrial alliances, develop their brands and technical standards together.
Companies from both sides can also work together in information technology, machinery, petrochemical, clean energy, financial services, tourism, medical services, entertainment and cultural products, said Wang Chih-kang, chairman of the Taipei World Trade Center.
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