Taiwan is recognized as a developed economy by the International Monetary Fund and a high-income economy by the World Bank. As one of the previous “Four Asian Tigers”, Taiwan’s economy has remained at the forefront compared to other provinces and cities of China in recent years, despite a slowdown in GDP growth. On February 22, 2023, preliminary data on gross domestic product released by the Taiwan Bureau of Statistics showed that Taiwan’s real GDP increased by 2.45% in 2022 compared to the previous year, and the completed regional GDP was NTD 22.71 trillion (USD 762.67 billion), ranking 9th among the cross-strait four-regions.
In addition, Taiwan’s GDP per capita has maintained a high level. According to the International Monetary Fund, Taiwan’s GDP per capita reached approximately USD 32,800 in 2022, surpassing South Korea (USD 32,200) for the first time and approaching Japan (USD 33,800), more than twice the GDP per capita of Chinese Mainland (USD 12,700), and ranking 33rd out of 193 economies worldwide.
In terms of exports, the total value of Taiwan’s goods exports in 2022 was USD 479.45 billion, up 7.4% year on year. In the first quarter of 2023, the total value of goods exports was USD 97.75 billion, a decrease of 19.2% from the same period last year. By export regions, Taiwan’s main export markets are Chinese Mainland and Hong Kong, the United States, Japan, Europe and ASEAN.
In the process of Taiwan's export trade and international business, a series of outstanding enterprises represented by Taiwan Semiconductor Manufacturing Company (TSMC) have played a significant role. These enterprises, with advanced production technologies and leading research and development capabilities, hold a wide range of customers and market shares in the international market. They are constantly innovating and improving to enhance the competitiveness and quality of products, contributing momentum and vitality to Taiwan’s export trade and the process of international business.
Taiwan has focused early on high-tech fields and gained support from the United States and other countries. As early as the 1970s, Taiwan began to develop the semiconductor industry and started to focus on technological research and innovation. Later specializing in the development of integrated circuits, Taiwan’s Industrial Institute signed a 10-year contract with Radio Corporation of America. In recent years, the globalization of Chinese Mainland and Taiwan has been accelerating, and cross-strait economic and trade cooperation and exchanges correspond to the historical trend as well.
Introduction of Taiwan's Globalized Companies
TSMC
Introduction of TSMC
Taiwan Semiconductor Manufacturing Company (TSMC), headquartered in Taiwan, China, was founded in 1987 and is the world’s largest chip foundry and the largest professional integrated circuit manufacturing service company. Adhering to a differentiation strategy, TSMC focuses on five major markets: smartphones, high-efficiency operation, Internet of Things, vehicle-used electronics, and consumer electronics products.
In 2022, the annual revenue exceeded USD 75.8 billion, a record high for 13 consecutive years, and net profit after tax exceeded USD 34 billion, an increase of 33.5%. As of April 2023, the company’s market capitalization is approximately USD 438.9 billion, a cumulative increase of nearly 300 times since its listing.
History and experience of TSMC's international business development
In 1988, after obtaining its first patent, TSMC established its North American subsidiary TSMC North America in San Jose, California, USA, followed by its European subsidiary TSMC Europe the next year, and then its Japanese subsidiary TSMC Japan KK. After receiving its first quality recognition as an international-level semiconductor company, TSMC began to establish global factories on a large scale in places including the United States, China, Singapore, and Japan. The corporate staff composition exhibits a notable degree of internationalization and a high level of educational attainment. The total number of employees worldwide is about 56,831, and most of the board of directors, managers and other executives have international education background or overseas working experience.
Recently, TSMC announced internally (March 31, 2023) the new establishment of an Overseas Operations Office (OOO) to support the company’s global expansion and accelerate the effectiveness of its overseas operations organization. The new OOO is in charge of overseeing and managing the wafer factories of TSMC built in Arizona, the United States and Kumamoto Prefecture, Japan. Since the construction of overseas factories involves many complex processes, the establishment of the new OOO will help provide human capital, facilitate industry chain support, and implement negotiation processes.
Taiwan Milk Tea Brands
Ruofan Pan, an entrepreneur based in Taiwan, was interviewed by EqualOcean. He believes that milk tea is one of the most successful industries in Taiwan in the process of going abroad. Brands such as Coco, Yifang, Happy Lemon, Chatime, and Chun Shui Tang have spread across the global market. Ruofan shared with us that most of the equipment and products used in milk tea stores in international markets are imported from Taiwan, regardless of whether or not the founder or the team is from Taiwan.
In 2012, Taiwan's milk tea brand Chatime opened its first offline store in the South of Horton (SOHO), London, UK. As of 2020, Chatime has 26 stores in the UK, making it the milk tea brand with the largest number of stores in the UK. In July 2018, Chatime entered the Louvre Square in Paris, France, becoming the third restaurant brand to enter the Louvre after Starbucks and McDonald's.
Happy Lemon and CoCo have also made the UK their first stop in Europe. In 2014, Happy Lemon opened its first store in London and now has eight stores in major cities in the U.K. In 2017, CoCo entered London and now has expanded its European stores to Paris in France and Barcelona and Madrid in Spain.
The reason why many tea brands choose London as their first stop in Europe has to do with the long history of milk tea drinking in the UK. In the year I studied in the UK, I saw many milk tea brands from Taiwan in the UK. These milk tea stores are not just opened in Chinatown, but are slowly getting out of Chinatown and opening in the commercial sections of the city center. In addition, there are many foreign consumers, and not just Chinese people buying them.
The reasons for the global popularity of Taiwan milk tea brands can be broadly categorized as the following. First of all, bubble tea originated in Taiwan. When you think of "bubble tea", they will naturally relate it to Taiwan. Secondly, the plastic sealing machine was first invented in Taiwan, which made it possible for consumers to take away their milk tea; consequently, the chain stores also developed and gradually spread around the world. Another key factor for the success of Taiwan milk tea brands going abroad is their early overseas establishment and very oriental store decoration style. Overseas consumers, especially in Europe and America, are generally interested in oriental culture, while Asia, especially Japan, has a similar culture to China and a long history of tea culture, which also provides opportunities for the global expansion of Taiwanese milk tea brands.
Din Tai Fung
Din Tai Fung, the world-renowned Chinese food brand, was founded in 1972 in Taiwan, China, and its main product is Xiao Long Bao. The brand has been selected as one of the “World's Top 10 Gourmet Restaurants” by the New York Times. As of March 2023, the official website shows that Din Tai Fung has 15 branches in China and over 160 branches worldwide, covering many countries and regions such as Japan, the United States, Singapore, South Korea, Malaysia and Thailand. Jackie Chan, Gong Li, Rie Miyazawa, Maggie Cheung, Stephen Chow and so on have all been its customers.
One of the important reasons for Din Tai Fung's reputation in the global market is its nearly rigorous standardized process. It has developed an almost industrial-like production process for Chinese restaurants, which was originally considered difficult to quantify and stabilize, so that consumers can have consistent and uniform quality food in different places. In 2000, Din Tai Fung set up a central kitchen and adopted a set of SOP standards to break down the production process of its signature Xiao Long Bao. In terms of raw materials, Ding Tai Feng has opened a special flour factory in Chinese Mainland, specializing in the production of its flour – medium gluten powder – to ensure the quality and safety of the production. In the production process, each XiaoLongBao working table completes the four processes of preparation, making small pieces of dough, rolling out the skin, digging the filling and wrapping the Xiaolongbao, and sets the standard of 5g of small pieces, 6.5 cm of the diameter of rolling, 16g of filling and 18 folds of the golden ratio. The team members can also work in turns to avoid repeating the same action for a long time. In terms of seasoning matching, the chicken soup should be heated to 85 degrees Celsius with a thermometer, and the ratio of sauce and vinegar to dip should be 1:3, etc. Some media have commented that rather than being a food service industry, Din Tai Fung is more of a precision manufacturing industry.
In addition to the refined attention to detail in food and production processes, the emphasis on people is also one of the core aspects of Din Tai Fung’s business management. On the one hand, run a restaurant, and keep the guests. Ding Tai Feng's Autobiography, Perfection with Temperature, recorded the service details of Ding Tai Feng's staff, “When the waiter walks around, they should observe the angle of the guests drinking tea. If the cup is raised more than 45 degrees, which means the tea is almost finished, they should take the initiative to add the tea. If the guests' chopsticks drop, do not wait for the guest to speak, a new pair should be immediately offered.” On the other hand, run a business, and retain the employees. Din Compared to the industry average of 25% to 35%, Din Tai Fung’s personnel costs are more than 50% in Taiwan, China and the lowest is about 30% elsewhere. At the end of 2013, Din Tai Fung said that senior employees at and above the store manager level could receive a year-end bonus of up to 20 months. With sufficient employee benefits, Din Tai Fung has a turnover rate of only 2%, with many employees having been on the job for more than 20 years.
Want Want
Want Want China Holdings Ltd. (hereinafter referred to as "Want Want"), is a Taiwan-funded enterprise, founded in 1962 and headquartered in Shanghai. Formerly known as Yilan Food Industry, it established the Want Want brand in 1983. According to its financial report, Want Want has four business segments, namely rice and fruit products, dairy products and beverages, snack foods and other products (mainly alcohol and other food product), Want Want’s foodprint covers 63 countries and regions in Asia, Africa, North America, Central and South America, Oceania and Europe.
In overseas markets, Want Want continued to improve its overseas supply chain. Want Want’s overseas business achieved double-digit growth year-on-year in the first half of 2022, with the overseas business, which accounted for approximately 20% of the revenue of the rich and fruit revenue, achieving double-digit growth compared to the same period last year. Meanwhile, Want Want achieved resilient growth in the Americas, Asia Pacific, Southeast Asia and Oceania. The Vietnam plant, which is officially put into operation in the first half of the year, will give full play to its cost and geographical advantages and initially become the main production base for overseas business.
In terms of market insight, Want Want always continues to launch high-quality new products in a timely manner according to market dynamics to meet the changing and differentiated needs of consumers. In addition to well-known snack products such as Want Want Senbei, Lonely God and Crushed Ice, Want Want has also been involved in various fields such as healthcare, elderly care, real estate and news media.
Due to three consecutive years of revenue decline from 2014 to 2016, Want Want has changed its previous strategy of focusing on large single products since 2017 and has focused on the continuous launch of new products and the development and marketing of brand IP. It has launched hundreds of new products in order to cover consumers of different age groups and different demands. For example, Want Want launched the young innovative beverage brand “Bond Coffee” and the personalized brand “Mr. Hot” for spicy lovers in 2018, the "Fix XBody" series of calorie-controlled snacks for white-collar workers in offices in 2019, and the new brand “BabyMumMum” in 2020, etc.
According to Cao Yongmei, the General Director of the Production and R&D Group at Want Want, the longevity of a brand is contingent upon its ability to consistently innovate its brand image, diversify its product offerings, and establish a contemporary marketing model that generates high brand value that aligns with the demands of the contemporary consumer era.