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- Monopoly in the Making: The Hidden Costs of Taiwan's Two-Player Retail Game
Monopoly in the Making: The Hidden Costs of Taiwan's Two-Player Retail Game
As two retail giants battle for dominance, suppliers and consumers face increasing pressure - exclusive analysis inside
Peter Park
March 09, 2025
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Hello ,
The very nature of capitalism is that it's exploitative. When you have two big fish in a small pond, the little fish don't stand a chance.
Sorry for the one-week break, I’ve been settling into my new job at WPIC helping Australian consumer brands break into Asia. A lot of my current focus is on China Cross-Border E-Commerce, but I’m hoping to get into Korea, Japan and Southeast Asia. More on this later.
To make up for the miss, I’m coming back with even more jam-packed topics. There are still three insights I will cover but they are nothing like you’ve heard or seen before.
The Asia journey for many western brands, small and big, may still be in the distant future, but it has to start with lots of curiosity, some knowledge and, at minimum, a willingness to understand. By this, I mean not just see each other as a 'convenient trade partner’ but as an essential partner to build a common future.
With that, I’m starting light with a look into the olive oil consumption in Asia. There’s been lots of talk about this for the last couple of years as the global price shot up to the historical high this time last year before the price started to come down late last year off the back of better production and weather forecast.
What about the whisky market in Korea? Well, it’s certainly not as ‘hot’ as it was in 2022 and don’t expect the increasingly sophisticated and picky young Korean consumers to choose a ‘new-world’ whisky. But that’s precisely why value-range and highball RTDs are on the rise.
Last but not least, we get to the crux of this edition - the undeniable retail duopoly in Taiwan. Does this remind you of something for our Australian readers? I will save my words here.
Let’s take away and see what we can unpack in Asian Retail this week. Have a good weekend everyone.
Yours Truly,
Peter Park / 박규형
Asian Olive Oil
"just a little bit more olive oil" (Marco Pierre, YouTube)
Analysis of 🫒Extra Virgin Olive Oil 🫒Import Market in Asia
Market Growth vs COVID Period:
🇯🇵 Japan and 🇭🇰 Hong Kong: Significant increase of +3%
🇸🇬 Singapore: Substantial growth of +18%
🇰🇷 Korea and 🇹🇼 Taiwan: Maintained previous levels
🇨🇳 China: Decreased by -17%
Recent Market Conditions:
📈In the past 2 years, European production dramatically decreased due to drought and poor cultivation conditions
📈Prices increased 4-5x on average, reaching up to $10,000 per ton
📈Since November, harvest yields have been higher than expected (minimum +30% compared to last year)
📈Prices are steadily declining, currently around $8,000 per ton
📈Prices are expected to gradually decrease until mid-next year
Market Outlook:
✅Asian demand is expected to increase as prices stabilize
✅Particular interest in the Chinese market growth, especially given recent oil scandals
✅Steady demand expected for cooking ingredients like olive oil due to:
✅Rising dining-out costs
✅Health consciousness
✅Growing trend of home cooking among single/two-person households
Olive Oil makes up a mere 1.26% of the global oil consumption. Over 50% of us are drinking palm oil (29%) and soybean oil (22%)! This will be a space to watch in Health & Wellness in the years to come. Right now, the price is still coming off the historical highs and the production is normalising after 3 years of drought.
Korean Whisky Landscape
What are these young Koreans doing outside a random 7-Eleven?
Soju is less relevant for young Koreans these days.
The above photo shows the explosive rise, and an equally noticeable fall, of the Korean whisky industry. This was the scene in 2023 when whisky releases would often go out of stock in as little as 30 minutes. Little did the market know what would happen next…
🥃Whisky Landscape in Korea is rapidly changing as the prices dropped up to 40% in 2024. The same level of discount was shown during the recent Lunar New Year sales. Stock clearance is ongoing in a market where the culture is moving towards selective, premium drinking.
The overall trend is the normalisation of consumption from the COVID peak, suppressed retail spending, and more young people consuming less alcohol and not drinking strong alcohol.
Monthly import volume compare to the previous year, 2023. Korean Statistics Agency
This is already reinforced by the proliferation of low-alcohol whisky highballs in CVS and food service, as well as a more recent presence of cheap bulk whisky. I know this because the exact requests came from a major Korean buyer.
A few bar owners also observed that there is a fundamental shift in the alcohol-drinking culture in Korea, with fewer social and business drinking occasions. Another interesting observation is an increase in female whisky drinkers.
What that tells me is a consumer segment who is willing to make an educated purchase and consume over a longer time as occasional entertainment.
Last but not least, GBP x KRW have gone up 12% this year so this will basically wipe out any margins importers/distributors had.
“I reckon the current price is still 40% above the historical average. I would be okay with a 10-20% premium.”
“You think this is a big price drop? Wait until more bubbles burst…”
“It’s not just the retailer margin. If you understand the ridiculous Korean excise system, you understand why the price is so high.”
Taiwan Retail Duopoly: Who’s the winner?
I talked about Taiwan’s fledging convenience store sector back in January. Outside this sector, you also have Carrefour (hypermarket), PX Mart (local supermarket), Costco (World's most profitable store in Taichung, Taiwan) and Jason's Marketplace (premium supermarket owned by Carrefour).
Despite the sector diversification and sophistication, I’m afraid there is no winner, but Taiwanese consumers are losing out long term as the two large retail conglomerates fight out the share of the 23-million consumer market pie.
Just look at the retail share of the two enterprises wielding a whopping 80% of the retail market between them. Taiwan is known for its SME-based economy and retail is a huge employment sector in any country. So having this much power and influence concentrated is not good for consumers. Much of this still remains the same since Uni-President became the first retailer in Taiwan in 2022 to cover all retail formats (convenience stores, supermarkets, hypermarkets).
I extracted key AI insights from the Tian Xing magazine’s 2022 article:
Uni-President's recent NT$29.1 billion acquisition of Carrefour Taiwan has made President Chain Store the first retailer in Taiwan to cover all retail formats (convenience stores, supermarkets, hypermarkets).
PX Mart, led by Chairman Lin Ming-hsiung, expanded through aggressive acquisitions, recently purchasing RT-Mart to challenge Uni-President's dominance.
The duopoly represents a clash of management philosophies - PX Mart's entrepreneur Lin (bold investments, willing to risk temporary losses) versus PCSC's professional manager Lo (emphasizes profitability, shareholder returns).
Suppliers are increasingly vulnerable to pricing pressure from both giants, with one supplier noting PX Mart demands "the lowest market price" with "lost profits shouldered by the manufacturer."
PX Mart uses a consignment system where suppliers only receive payment after goods are sold, creating financial pressure on manufacturers.
Both retail giants are investing heavily in logistics infrastructure - PX Mart has spent over NT$30 billion on logistics centers, while PCSC has invested more than NT$10 billion.
Fresh produce capabilities have become a key battleground, with Carrefour's expertise being a critical missing piece for PCSC's retail strategy.
Regulators have expressed concern about market concentration, with PX Mart's acquisition of RT-Mart barely passing regulatory approval (4-3 vote).
Industry insiders worry the duopoly will lead to increased private-label products, reduced product diversity, and potential price wars that could harm both consumers and suppliers.
Focus Taiwan, 2022
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