What ever happened to good old, quiet, laid-back Taichung?
You may not have noticed, but the city's roadways and broad expanses have, as of late, become a combat zone of sort, with multiple parties battling for supremacy in a no-holds-barred war. No, we're not referring to the traffic situation or gangster-ridden night clubs and KTVs. Rather, it's the commercial realm where the heaviest fighting is occurring.
As Taiwan's third-largest city and, more importantly, the service and commercial center for Central Taiwan's five million residents, Taichung has long acted as a magnet for all kinds of businesses, foreign and Chinese. Hotels, department stores, hypermarket and supermarket chains, restaurants, fast-food franchises, and a range of other establishments have been drawn by the promise of a market known for its free-spending citizens.
"Taichung people have a lot of money," is a frequent response of general managers and other company heads who have set up here.
As simple as it is, it makes sense. Tens of thousands of small and medium size enterprises have created a whole class of nouveau riche residents who boast one of the top two highest disposable incomes in Taiwan.
Take, for example, the oft-quoted fact that, reportedly, about 50 percent of all top-of-the-line Mercedes Benz 300 SEL sedans sold on the island are bought by our fellow Taichung area residents.
Despite all this, the sheer number of service-type industries competing here is staggering. More recently, no other industry illustrates this so well as the department stores. Since the opening of Chung Yo Department Store -- with three large buildings and 10,000 pings of retail space -- in the early 1990s, Taichung has boasted the largest stores on the island. Chung Yo was followed few years later by the landmark Sogo Department Store -- reportedly the chain's largest in Asia -- with 12,000 pings of space. Waiting in the wings is Daimaru Department Store, which is scheduled to open sometime next spring across from Sogo, in the Grand Formosa Hotel building, with 14,000 pings of space, according to some sources. Then there's Sogo's second store, already rising on the corner of Taichung Harbor and Ching Cheng roads, with a planned 7,000 pings of space.
As they say, however, you ain't seen nothing yet. In early August, the joint Japanese-Taiwanese department store chain, Shinkong Mitsukoshi, broke ground on the mother of all department stores -- a 20-level (including six basements), 48,500-ping monster which will include up to 36,000 pings of retail space, 1,250 car parking spaces, 1,070 motorcycle spaces, a two-floor supermarket, and a five-floor leisure center with eight movie theaters (with seating for 2,000).
Anyone familiar with Mitsukoshi's three Taipei stores will be impressed to know that the Taichung store will equal all three in size. It's scheduled to open in November, 2000.
The big question is whether there's enough to go around for everyone in the city's NT$20 billion-plus department store market. Anticipating the coming competition, existing department stores, like Sogo, are already remodeling to keep the crowds coming.
Tough competition is by no means limited to this industry. High-end hotels have continued to jump into the local market with regularity, with the Grand Formosa being the most recent addition, following a progression including the Evergreen Laurel, Howard Prince and The Landis. Scheduled to join the gang over the next several years are the Intercontinental and Hyatt chains.
Then there are the hypermarkets. Back in the early 1990s, residents were happy to shop at the outlying Makro and Sunrise stores. Little could they foresee that, in a few years, the market would be crowded with the likes of Carrefour, Save and Safe and Sinon. RT Mart just opened and, towards the end of this year, a large French Geant hypermarket/mall is scheduled to open at the corner of Wenhsin South and Fuhsing roads.
The failures of department stores like ATT, Everwell, Yaohan and Splendor underline the fact that there are casualties when the competition is so intense. According to those in both the department store and hotel industries, the first to feel the pinch will probably be the smaller, older establishments who will be squeezed by falling prices at larger, newer establishments. Why, for example, pay about NT$2,000 to stay at a small, no-frills local business hotel, when you can find a heavily-discounted room at fully-loaded luxury hotel for NT$800 to NT$1,000 more?
At any rate, there's little doubt that dozens of other businesses are circling the perimeter, looking for the opportune moment to sink their claws into a piece of Taichung's juicy market. It's not a sure-fire proposition but, for those who play their cards right, the rewards are big.
And, of course, for the rest of us consumers, it means more options and lower prices. There's absolutely nothing wrong with that.