Rethinking Trade Strategies in Taiwan
This video discusses adapting trade strategies in Taiwan to better suit the modern consumer, who is generally well-informed and price-conscious. It challenges traditional trading methods and suggests a new approach centered on transparency and fair pricing.
The Changing Landscape of Trade
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The speaker notes that Taiwanese consumers are increasingly savvy and use tools like VPNs to compare prices internationally.
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Traditional trading strategies, which relied on information asymmetry to inflate prices, are becoming less effective. The old method was keeping customer unawareness of the real prices of products abroad.
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It is important to assume consumers are smart and understand the market.
Adapting to Informed Consumers
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The speaker argues that Taiwanese businesses should assume customers are well-informed and willing to purchase goods if they are priced competitively with international markets.
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He recalls an experience where his Singaporean boss noted Taiwanese customers' tendency to request extra benefits or discounts, suggesting a "totally cheap mentality." However, this mentality can be leveraged if understood correctly.
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He believes businesses should offer competitive prices, even if it means slightly lower profit margins, to gain market share and build customer loyalty.
The "Dark Jungle" vs. Transparency
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The speaker contrasts the "dark jungle" approach of hiding prices with a transparent strategy where customers are explicitly told that prices are lower than abroad.
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He believes that if customers know they are getting a good deal, they will be more likely to make repeat purchases, reducing the need for extensive sales strategies.
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In the modern era, consumers can easily research prices and information, creating a shift from when previous generations conducted business.
The Question of Profitability
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The speaker poses a rhetorical question: if a product sells for $100 in Germany, wouldn't selling it for $90 in Taiwan still be profitable? He argues that it would, even if the profit margin is slightly lower.
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He emphasizes that focusing on volume and market share can compensate for reduced profit margins on individual items. The profit margin can be 20-30%.
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He suggests that Taiwanese businesses have the potential to offer lower prices than even Chinese competitors.
Examples and Comparisons
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The speaker uses the example of buying insurance in Japan, where prices are significantly lower than in Taiwan, highlighting the consumer awareness of international price differences.
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He mentions HTC selling phones in Korea with better specifications and lower prices than in Taiwan, which angered Taiwanese consumers.
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He questions whether sales being lower in the country of production is okay.
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The speaker compares his strategy to KingKo who sells cheaper in Europe than in Taiwan.
The Water Supply and Price Manipulation
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The speaker criticizes the practice of "water supply" in Taiwan's stock market, where general managers inflate prices to maximize profits, leading to market instability.
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He describes a scenario where a general manager artificially raises prices while their sibling imports the same goods at a lower price to fill the market, resulting in excessive profit for the family.
Understanding Taiwanese Consumers
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The speaker states that Taiwanese consumers are driven by a desire for profit and value, not just saving money.
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He suggests businesses can make customers feel valued by being transparent about pricing and offering deals that are slightly better than international prices, even if the profit margin is slightly reduced.
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Giving them a better price tag by selling a product for 95 dollars instead of 100 is fine, especially when your margin is still at 50%.
Time vs. Money
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The speaker shares a personal anecdote about avoiding Starbucks because he values his time more than the cost savings of searching for cheaper alternatives.
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He encourages businesses to understand the value of time for their customers and offer products and services that are both affordable and convenient.
Conclusion: A Call for Smarter Business Practices
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The speaker concludes by urging Taiwanese businesses to adopt smarter, more transparent practices that benefit both the company and the consumer.
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He emphasizes that by offering reasonable prices and encouraging customers to embrace high-quality products, businesses can contribute to a healthier and more sustainable market.
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The speaker reiterates his confidence in conducting ethical business practices and encourages viewers to share their thoughts and experiences.
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