CAPTURING GROWTH IN ASIA'S 6TH LARGEST MARKET - OPPORTUNITIES IN TAIWAN FOR SWEDISH COMPANIES - CONFIDENTIAL - Business Sweden
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CONFIDENTIAL FOR INTERNAL USE WITHIN CLIENT COMPANY ONLY CAPTURING GROWTH IN ASIA’S 6TH LARGEST MARKET – OPPORTUNITIES IN TAIWAN FOR SWEDISH COMPANIES January 2019 Business Sweden Taiwan
AGENDA
Business Sweden in APAC and Taiwan
Taiwan overview
Key business opportunities for Swedish companies
Sweden in Taiwan
28 JANUARY, 2019
FOREWORD
As one of the four Asian Tigers, Taiwan's economy went through a remarkable growth journey between 1960 and the
1990s - making Taiwan one of Asia’s most developed economies, ranking 18th globally in GDP per capita (PPP).
Today, Taiwan has a more modest growth rate compared to some of its Asian peers, with around 2.5% GDP growth
expected for the coming years. An aging population, a complex geopolitical situation, and increased protectionism
and trade war are some of threats to Taiwan's economic growth.
The success story of Taiwan's economy has partly been driven by the specialization within high-technology
electronics manufacturing, and the small island is home to many global tech giants such as Foxconn, TSMC,
MediaTek and Asus. And despite being a relatively small economy, Taiwan and Taiwanese companies play a critical
role in the global electronics supply chain, with 13 of the top 100 global technology leaders originating from Taiwan.
However, Taiwan is not only about high-tech electronics. As a developed and open economy, with a GDP larger than
Nice picture of Sweden's, it also brings many opportunities for innovative and sustainable Swedish solutions and technologies within
101 for instance other industries such as healthcare, transportation, energy as well as retail.
Today, there are over 80 Swedish companies present in Taiwan, and many more active through distributors or
agents. Despite the vast distance between Sweden and Taiwan, our economies sees significant trade, with a steady
increase both on exports and imports. However, we believe there is significant untapped potential for Swedish
companies in Taiwan, and we hope to se increased trade and investment between Sweden and Taiwan in the future.
We hope this study will bring insights that can support Swedish companies that are currently operating in Taiwan as
well as those who are planning to establish themselves here.
Vlad Månsson Håkan Jevrell
Market Manager Taiwan &Director of Trade Representative
Business Sweden Taiwan Business Sweden Taiwan
BUSINESS SWEDEN 28 JANUARY 2019 3
BUSINESS SWEDEN IN APAC
BUSINESS SWEDEN SUPPORT SWEDISH COMPANIES’
REVENUE GROWTH IN APAC
150 locally-anchored growth experts.. ..with a well-spread footprint in APAC.. ..driving growth for Swedish companies
MARKET EXPANSION
15 Offices
Market Entry
Market Growth
Sales Channel
Optimization
M&A and Alliances
20+
Strategic Customer
markets Segmentation
support in
PUBLIC AFFAIRS
150 Growth
experts Market Access Strategy
Stakeholder Analysis and Engagement
Government-to-Government Influencing
500+
Projects
performed
yearly SALES ACCELERATION
Bus. Development Sales & Partner
50% Local
team
& Sales Execution
Partner Search &
Selection
Management
Mega Deals
(Tender Support)
Companies
95 housed in our
facilities
BUSINESS INCUBATION & OPERATIONS
Establishment assessments and incorporation
Recruitment and Operational support
Office Space, Finance and HR Back Office
Companies who work with us perceive us as:
Specialized on revenue Unique in combining analytical Passionate about the success
Local, hands-on and agile
growth in APAC skills with government access of Swedish companies
28 JANUARY, 2019
AGENDA
Business Sweden in APAC and Taiwan
Taiwan overview
Key business opportunities for Swedish companies
Sweden in Taiwan
28 JANUARY, 2019
TAIWAN OVERVIEW
TAIWAN IS ONE OF ASIA’S MOST DEVELOPED
ECONOMIES, WITH SIGNIFICANT SWEDISH PRESENCE
TAIWAN SNAPSHOT SWEDEN & TAIWAN
Top categories:
23 MULTI-PARTY
DEMOCRATIC
4.1 1. Transport &
vehicles (25%**)
SWEDISH B SEK (2017) 2. Machinery and
MILLION REPUBLIC
POLITICAL EXPORTS (+7.8% FROM 2016) equipment (23%)
POPULATION SYSTEM TO TAIWAN 3. Iron & steel (13%)
Top categories:
2.7% $25 K 6.7 1. Machinery and
equipment (42%)
IMPORTS B SEK (2017) 2. Metalworking (26%)
GDP GROWTH GDP PER
FROM TAIWAN (HIGHEST IN HISTORY, 3. Nails, pins, screws,
(2018) CAPITA* TO SWEDEN +8.9 % FROM 2016) bolts (13%)
Largest trading partners:
1. China
2. USA
~ # 85
3. Japan SWEDISH COMPANIES
4. Hong Kong ESTABLISHED IN TAIWAN***
5. EU
6. Korea
…
…
Taiwan is located in the West Pacific, a strategic 39. Sweden
location for both North Asia and South East Asia
* NOMINAL $US PRICES (SWEDEN: $53 220). IN PPP SWEDEN AND TAIWAN ARE SIMILAR
** SHARE OF TOTAL EXPORTS / IMPORTS
*** BASED ON OUR KNOWLEDGE AND DEFINITION OF SWEDISH COMPANY
TAIWAN OVERVIEW
TAIWAN EMERGED AS AN ADVANCED ECONOMY DURING
THE TECH TRANSFORMATION IN THE 90’S
TAIWAN GDP PER CAPITA (NOMINAL)
1955 – 2017, USD PER PERSON & YEAR GDP per capita
exceeds
Transform to USD 20,000 25,534
technology based
GDP per capita
industry, one of Four
exceeds
Asian Tigers
Transform from 10 major projects to USD 10,000
agriculture based boost transport,
to industrial based infrastructure and
export economy heavy industry sector
216
1955 1964 1973 1982 1991 2000 2009 2018
TAIWAN IS A DEVELOPED ECONOMY THAT OFFERS OPPORTUNITIES FOR ADVANCED PRODUCTS AND SOLUTIONS
SOURCE: NATIONAL STATISTICS, TAIWAN
28 JANUARY, 2019TAIWAN OVERVIEW
THE DEVELOPED ECONOMY IS AN ATTRACTIVE MARKET
FOR SWEDISH COMPANIES EXPANDING IN ASIA
WHY TAIWAN
Sizeable domestic Excellent test market One of Asia’s most
market with high or base for further attractive business
purchasing power expansion in Asia environments
JAPAN World’s 21st largest economy Taiwanese companies are large Ease of Doing Business
and the 6th in Asia by GDP investors in China as well as ranking of #15 in the world
CHINA KOREA (Sweden 22nd)* SEA and #4 in Asia
Home to 23M people with the Taiwanese influence in SEA Culture of openness and
3rd highest GDP per capita in expected to further increase acceptance of foreign brands
East Asia after Singapore and with Southbound policies
Hong Kong** Stable democracy and low
TAIWAN corruption
Mature market in need Good infrastructure and easy
Home to large to set up a company
of innovative and
OEM’s/ODM’s with
sophisticated High-quality talents
global footprint
technology (especially engineers) and
loyal labor force
ASEAN Global supply base for high-quality Developed industries with
products within ICT, car parts, automated manufacturing Strong protection of IP
textile, machinery etc. continuously looking for
state-of-the-art technology
Home to many large OEMs/ODMs
like Asus, Acer, Foxconn, TSMC, Industry transformation from
Kymco and Giant with key contract manufacturing to
*IMF NOMINAL GDP RANKING 2018. MIDDLE EAST NOT
decision-making in Taiwan high value and solutions- INCLUDE IN ASIA
based business **GDP PER CAPITA (PPP) EXCLUDING BRUNEI
28 JANUARY, 2019TAIWAN OVERVIEW
THE IMPORTANCE OF TAIWAN IN THE GLOBAL SUPPLY
CHAIN IS OFTEN OVERLOOKED
WHAT YOU DIDN’T KNOW ABOUT TAIWAN..
Taiwan, ”the bicycle kingdom”, remains the key player in the global biking
industry, with over 50% of medium- and high end bicycles globally
manufactured in Taiwan or in Taiwanese-owned factories
Out of the 100 Global Technology Leaders, 13 are from Taiwan
(Taiwan is the 2nd-highest ranked after the US)
Taiwan is well-positioned in the global move towards electric vehicles -
20 Taiwanese companies are key component suppliers to Tesla
Taiwan still plays a key role in the global textile supply chain: 16/32 of the
national teams in the FIFA World Cup have their jerseys made in / by Taiwan
Despite a tense geopolitical climate, Taiwan remains one of the key FDI sources to
China – and out of the top 100 exporters from China to the US, 35 are Taiwanese
SOURCE: IMF, THOMSON REUTER, NEWS, CHINESE INSTITUTE OF ECONOMIC RESEARCH * EXCLUDING MIDDLE EAST AND RUSSIA
28 JANUARY, 2019TAIWAN OVERVIEW
THE TAIWAN ECONOMY IS EXPECTED TO STAY STRONG,
BUT TRADE WAR AND AGING POPULATION A CONCERN
GDP Growth (%) Unemployment rate (%)
Taiwan Advanced economies Taiwan Advanced economies
5 8
4 6
3
4
2
1 2
0 0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Growth around 2% expected mid-term from Taiwan. Forecast for Unemployment rate overall on very low levels. Despite trade war,
2018 and 2019 revised upwards to 2.7 vs 2.4 % - somewhat Taiwan employment rate reached an 18-year low and stood at
higher than global average for advanced economies 3.75% in October 2018.
Purchasing Managers Index Population structure (millions)
Trump tariffs on 0-14 years old 15-64 years old Above 65 years old
57 25
China
20
52
15
47 10
5
42
0
PMI index has been very strong during end of 2017 and early Population rapidly getting older with 14% of the population above
2018, but declining rapidly with the trade war. Taiwan is highly 65 years. Peak of Taiwan's working population is now!
dependent on global trade with export standing for ~50% of GDP
SOURCE: IMF, NIKKEI PMI, NATIONAL STATISTICS TAIWAN, STANDARD CHARTERED BANK * DATA AS OF DECEMBER 2018
BUSINESS SWEDEN 28 JANUARY, 2019 10US-CHINA TRADE WAR IMPACT ON TAIWAN
TAIWAN IS STUCK IN BETWEEN THE US-CHINA TRADE
WAR – WITH MAJOR RISKS, BUT ALSO OPPORTUNITIES
EXPOSURE TO CHINA (% OF GDP) US IMPORTS FROM CHINA & TW SHARE* MEASURES FROM TAIWAN
Government through MOEA/MOST are
Singapore offering tax and R&D subsidies and favorable
Government
4.9% financing for companies moving back to TW
Taiwan
Electrical and
optical For industries with high degree of manual
Vietnam 159 B labor, government is supporting to drive
production towards ASEAN, with consultancy
Malaysia 0.1% help and industrial clusters
South Korea Wholesale
62B
and retail Quanta recently announced an NTD 4.28
Thailand billion investment in Taoyuan, and we also
1.3% see expansion by Inventec and Supermicro
Australia Textile and
footwear 48 B Giant and Merida moving high-value items out
of China to Taiwan (and a trend that low-value
Companies
Japan
item production is shifting to ASEAN)
Indonesia 0.9%
Accton move back 35% China capacity to
Chemicals and 31 B
Philippines minerals
Taiwan, the rest will move directly to the USA.
Universal Microwave Technology to relocate
India production to ASEAN by acquiring a
1.5%
Machinery and
Malaysian company
0 5 10 15 20 25 30 B
equipment
Taiwan still heavily reliant on Increased tariffs on electrical and optical Increased investments likely seen in Taiwan
China with 40% of Taiwan's equipment will have a major impact on by companies heavily affected by the Trade
exports going to China (incl. HK) Taiwan war – shift towards ASEAN also clear
SOURCE: BLOOMBERG, NIKKEI, NATIXIX, STANDARD CHARTERED, BUSINESS SWEDEN ANALYSIS * ON A VALUE-ADD BASIS
BUSINESS SWEDEN 28 JANUARY, 2019 11BUSINESS IN TAIWAN
TAIWAN IS A STABLE INNOVATION HUB CONSISTENTLY
SCORING HIGH IN INTERNATIONAL RANKINGS
A WELCOMING BUSINESS CLIMATE INTERNATIONAL RANKINGS
Welcoming to expats – Taipei placing 1st among #4 globally in Innovation Capability in the World Bank’s Ease of
cities globally in InterNations Expat Insider 2018 Doing Business report, which refers to Taiwan as one of the four
”super innovators” alongside Germany, the US and Switzerland.
Ideal for doing business – little red tape and the
possibility to set up an entity within 4 weeks (rep. #4 in East Asia in the Ease of Doing Business report
office)
Stable salary levels – good access to high-quality
#4 in ASIA in IPRI’s Intellectual Property ranking*
talent at an affordable cost (average salary increase
of 3% last years as opposed to 7% in China)
#4 in APAC in the 2018 Global Competitive Index report
Taiwan is a high-trust society offering strong IP
protection, a high-quality workforce and a vibrant,
innovative business climate
#5 least corrupted country in the APAC region according to
Transparency International*
HIGH-TRUST SOCIETY, DEMOCRATIC VALUES AND FOCUS ON INNOVATION ALIGN WELL WITH SWEDISH CORPORATE VALUES
SOURCES: THE WORLD BANK: DOING BUSINESS 2018; TRANSPARENCY INTERNATIONAL, CORRUPTION INDEX 2017; INTERNATIONAL PROPERTY RIGHTS INDEX 2018:
WORLD ECONOMIC FORUM, THE GLOBAL COMPETITIVENESS REPORT 2018; INTERNATIONS, EXPATS INSIDER 2018;
28 JANUARY, 2019AGENDA
Business Sweden in APAC and Taiwan
Taiwan overview
Key business opportunities for Swedish companies
Sweden in Taiwan
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES
BUSINESS OPPORTUNITIES WITHIN KEY INDUSTRIES
MATCH WELL WITH SWEDEN’S COMPETENCE AREAS
KEY SECTORS FOR
SWEDISH COMPANIES
TRENDS OPPORTUNITIES
World leaders in ICT, machinery, automotive Equipment supply to key industries
parts, high-tech textile manufacturing
HIGH-TECH Software and IOT solution
MANUFACTURING Strong supply chain integration with China and Smart and green production solution
the region with decision-making in Taiwan
Modernization of transport sector with 10,000 Supply chain to electric bus expansion in
electric buses needed by 2030 Taiwan
TRANSPORT The Taoyuan Aerotropolis project is the largest Sustainable vehicles and smart transportation
national urban plan at a value of USD 17 billion
Well-established national insurance and Healthcare solutions for aging societies like
reimbursement system with universal coverage connected healthcare, elderly care equipment
HEALTHCARE One of the fastest-aging societies in the world
and systems and precision medicine that can
reduce costs and increase quality of care
with 20% of population above 65 years old in 2026
Increasing share of renewable energy to 20% Equipment and solutions to offshore wind
by 2025 long term phase out of nuclear power power sector for Taiwan and Asian markets
ENERGY Solutions for nuclear power plant decommissioning
Offshore wind power plan with USD 30 billion
of investment for 5.5 GW by 2025 Smart energy and energy efficiency solutions
High purchase power in Asia and high Organic or functional foods with health
RETAIL AND acceptance of Scandinavian consumer brands benefits
FOOD Swedish food exports to Taiwan increasing Consumer products targeting middle-class
rapidly with annual growth rate by 40% consumers
28 JANUARY, 2019AGENDA
Business Sweden in APAC and Taiwan
Taiwan overview
Key business opportunities for Swedish companies
High-tech manufacturing
Transport
Healthcare
Energy
Retail and food
Sweden in Taiwan
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING
TAIWAN IS A MANUFACTURING POWERHOUSE FOR HIGH
TECH ICT, AUTOMOTIVE, MACHINERY AND TEXTILE
HIGH-TECH MANUFACTURE AREAS OF OPPORTUNITY KEY CONSIDERATIONS
ICT is the biggest manufacturing industry
and export segment in Taiwan
EQUIPMENT &
For machinery, Taiwan is a global player MACHINERY FOR
for shoemaking, machine tools and textile MANUFACTURE UNDERSTAND VALUE
machinery. Taiwan’s machinery industry is CHAIN AND WHO ARE
NEW MATERIAL KEY STAKEHOLDERS
transforming to smart manufacturing TECHNOLOGY WHICH
IMPROVE PRODUCT
Taiwan auto parts, electronics and PERFORMANCE
TARGET KEY
bicycles are globally competitive DECISION-MAKERS IN
SOURCING FROM TAIWAN
TAIWAN
For textiles, Taiwan is competitive for its
functional and sustainable fabrics
SOFTWARE SOLUTION LOCAL SUPPORT IS
TO BE BUNDLED WITH CRITICAL TO SUCCESS
Strong regional integration with major HARDWARE FOR ICT
factories in China and SEA but INDUSTRY
headquarter and decision-making are in
Taiwan
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING
TAIWAN’S MANUFACTURING INDUSTRIES AND
PRODUCTS ARE COMPETITIVE ON THE GLOBAL MARKET
EXPORT & PRODUCTION VALUE, 2017 COMMENTS
Export ICT manufacturing accounts for 33% of total manufacturing and
(USD billion)
51% of total exports, and Taiwanese ICT companies are
110 important OEM/ODM partners to global IT brands such as
35
ICT Apple, HP, Dell, Lenovo etc.
30 In 2018, Microsoft, AWS, IBM and Google announced plans to
invest in AI and big data centers in Taiwan. Taiwan continues to
25 attract the IT giants to invest in Taiwan for its high-quality
Machinery talents, policy support and strong IP protection
20 In the Automotive industry, auto parts is the key segment for
exports, with about 44% of exports going to the US, 6% to Japan
15 and 5% to China. Taiwan is well-positioned in the global move
towards EV with over 20 Taiwanese companies as key
10 Textile components suppliers to Tesla
Automotive and parts Taiwan's machinery industry is seen as a truly global player.
5 Overall, it ranks second in the world for the export of shoe-
making machinery and fourth for the export of machine tools
0 Taiwan is competitive for its functional and sustainable fabrics in
0 10 20 30 40 145 textiles. For instance, Taiwan manufactures over half of the
Production World Cup team jerseys which use fabric made from recycled
(USD billion) plastic bottle fibers
TARGET KEY TAIWANESE MANUFACTURERS TO REACH THE GLOBAL MARKET
SOURCE: MOEA, BUSINESS SWEDEN ANALYSIS
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING
TAIWAN CONTINUES TO PLAY AN IMPORTANT ROLE IN
THE GLOBAL SEMICONDUCTOR INDUSTRY
INDUSTRY DATA COMMENTS
TAIWAN MARKET SHARE AND RANKING OF GLOBAL
The semiconductor industry is very important to the Taiwanese
SEMICONDUCTION INDUSTRY (USD BILLION), 2017
economy with a total value of USD 81 billion (ranked the 3rd
globally) which accounts for 15% of GDP
Taiwan Global 16% With the development of IoT, AI, sensors etc. the demand is high
with projected annual growth rate of 6.6% to 2021 (higher
than GDP growth of 2-3%)
503 Taiwan has a complete IC* value chain from design, manufacture
1.6% to packaging with clusters of companies focusing on different
parts of the value chain, something which is quite unique among
the IC industries around the world
323 Taiwan IC foundry and packaging ranks number one in the world
21% and IC design as number two (after the US)
73% 56% TSMC, the global number 1 IC foundry, invested about USD 17
billion to build the world’s first 5nm fabs (state-of-the-art
98 semiconductor technology) in Taiwan which will be in operation
55 28 by 2020
TSMC has the global market share of 56% and is the key
A: Foundry B: Package C: IC Design D: IDM IC value supplier to Apple and other leading technology companies
(Including chain:
memory) A+B+C+D
OPPORTUNITIES FOR NEW MATERIAL AND PROCESS TECHNOLOGY FOR SEMICONDUCTOR INDUSTRY
SOURCE: MOEA: FORBES * IC: INTEGRATED CIRCUIT
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING
TAIWAN MACHINERY INDUSTRY IS TRANSFORMING TO
SMART MACHINERY TO INCREASE COMPETITIVENESS
INDUSTRY DATA COMMENTS
TAIWAN PRODUCTION AND EXPORT VALUE FOR KEY
The total production of the Taiwan machinery industry is about
MACHINERY AND GLOBAL EXPORT RANKING
USD 37 billion with an export value of roughly USD 25.6
(USD BILLION), 2017
billion (about 60%), Taiwan export value ranks 10th globally
Production Export The main export destinations are China (30%), the US (16%),
Japan (7%), South Korea (4%) and Vietnam (2%)
An investment of roughly USD 2.3 billion has been made in
7.7 smart manufacturing by the industry in 2017
Smart Machinery is a key industry in the government’s major
industry initiative: “5+2 innovative industries”. To transform the
industry, the strategy is to:
3.4
Assist the industry in integrating technologies like IoT and AI
1.4 in order to develop smart machinery products
1.2 1.1
0.63 Develop the system integration industry to offer turn-key
1.0 1.2
1.0 solutions for smart manufacturing
0.6
Implement smart manufacturing to improve the manufacturing
Machine tools Textile Plastics & Shoemaking Woodworking
process and to target the domestic manufacturers followed by
machinery Rubber machinery
machinery exporting the service
SIGNIFICANT OPPORTUNITIES FOR COMPONENTS AND SERVICES FOR SMART MACHINERY
SOURCE: MOEA: TAIWAN ASSOCIATION OF MACHINERY INDUSTRY
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING
TAIWAN AUTO PARTS, ELECTRONICS AND BICYCLES
ARE GLOBALLY COMPETITIVE
INDUSTRY DATA COMMENTS
PRODUCTION VALUE OF AUTOMOTIVE INDUSTRY,
Taiwan finished vehicle production is mainly for the domestic
(USD BILLION), 2016-17
market. Car companies like Ford, Toyota, Honda, Mitsubishi
have joint ventures in Taiwan for production
2016 2017 Taiwanese local brand automaker Luxgen was founded in
2009 and is focused on the domestic market
+4% Auto parts industry consists mainly of SMEs and is globally
+14% competitive with wide diversity and high flexibility, sales are
-3% 7.3
7.0 6.9 primarily exports to global car makers. About 44% export to
6.4 6.2 US market, 6% to Japan and 5% to China
6.1
Strong growth for automotive electronics industry in 2017
+8% because of global move towards EV. Over 20 Taiwanese
3.7 companies are key components suppliers to Tesla
3.4
-8% The yearly number of scooter production is about 1.2 million with
1.7 1.6 70% for domestic sales and 30% for export. Taiwan has a couple
of own brands. The scooter industry is also moving toward
electrification. Gogoro is a well-known brand for E-scooters
Taiwan is home to well-known bicycle brands like Giant and
Finished Auto parts Automotive Scooter and Bicycle Merida. Taiwan produces high-end bicycles with average export
vehicle electronics parts value of USD 560 per bicycle in 2017
TAIWAN’S MIX OF KNOWLEDGE IN ICT AND AUTOMOTIVE BENEFITS FROM THE GLOBAL TOWARDS ELECTRIC VEHICLES
SOURCE: MOEA: TAIWAN TRANSPORTATION VEHICLE MANUFACTURERS ASSOCIATION
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING
TAIWAN IS A FRONTRUNNER FOR ECO- AND
FUNCTIONAL TEXTILES
INDUSTRY DATA COMMENTS
EXPORT VALUE OF TEXTILE INDUSTRY
Total production value of textile industry is USD 12.6 billion with
(USD BILLION), 2016-17
an export value of USD 10 billion (about 80%)
Fabrics accounts for 70% of total export. The fabrics are
exported to factories for final textile products
2016 2017
The biggest export markets are Vietnam (22%), China (19%), US
(7%), Hong Kong (6.4%) and Indonesia (5.4%). The top 5
+1.1% countries accounts for about 60% of exports
6.70 6.80 Taiwan is a frontrunner in terms of eco- and multifunctional
textiles. About 70% of global functional textile comes from
synthetic fiber from Taiwan
In the value chain, fabrics companies are the innovative
“converters” integrating the up- and downstream supply chain for
international brand names allowing development of new products
+6% and quality control
-5.5% 1.40 1.50 -3.7%
0.82 0.78 Taiwanese suppliers have strong ties with global brands like
0.57 0.55 Nike and Adidas, which have high ambitions on their green
roadmap and high requirements on the CSR standards of
Fiber Yarn Fabrics Clothes suppliers
TAIWAN OFFERS A GLOBALLY HIGHLY COMPETITIVE AND SUSTAINABLE TEXTILE INDUSTRY
SOURCE: TAIWAN TEXTILE FEDERATION; BUSINESS SWEDEN INTERVIEW
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING
ATLAS COPCO’S SUCCESS IS DRIVEN BY LONG-TERM
COMMITMENT AND STRONG CLIENT RELATIONS
THE COMPANY KEY SUCCESS FACTORS
DIRECT AND HANDS-ON SUPPORT TO KEY CLIENTS
Atlas Copco can provide direct support to high-tech clients thanks
to their high technology knowledge and hands-on service
Clients are involved throughout the whole process; from planning
Atlas Copco is the world leader for innovative compressors, and construction to installation and after-sales service
vacuum solutions and air treatment systems, construction
equipment, power tools and assembly systems SOLID BUSINESS AND BRAND
High-tech clients cannot afford losses from production
suspension, thus it is important to be a trustworthy company to
the client
THE CASE
BE THE TECHNOLOGY AND SUSTAINABILITY LEADER
Atlas Copco has been in Taiwan since 1959 through an Atlas Copco is the technology leader continuously developing
agent and with their own presence since 1980 better products which allow for additional energy savings of 5%
every 5 years. This helps clients look long-term and to consider
Atlas Copco focuses on key technology offerings like oil- the cost-saving throughout the whole product life cycle
free compressors and high-quality air dryers to meet the
high quality demand from high-tech industries
“To work with the high-tech market, your companies need to have
Atlas Copco is the number one supplier of compressors long-term core values like innovation, sustainability and
and vacuum equipment for the semiconductor industry in commitment.”
Taiwan
John Demers, General Manager, Atlas Copco Taiwan
SOURCE. INTERVIEW
BUSINESS SWEDEN 28 JANUARY 2019 22AGENDA
Business Sweden in APAC and Taiwan
Taiwan overview
Key business opportunities for Swedish companies
High-tech manufacturing
Transport
Healthcare
Energy
Retail and food
Sweden in Taiwan
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – TRANSPORT
BUSINESS OPPORTUNITIES ARE IDENTIFIED FOR
SUSTAINABLE VEHICLES, RAILWAY AND AIRPORT CITY
TRANSPORT AREAS OF OPPORTUNITY KEY CONSIDERATIONS
Taiwan government has announced policy EQUIPMENT AND FOLLOW
goals to replace all city buses with CONTROL SYSTEM DEVELOPMENT OF
electric buses by 2030 FOR RAILWAY GOVERNMENT PLAN
CONSTRUCTION AND TENDER
Major investment is planned in Taiwan for MAP THE
railway upgrades and metro construction ELECTRIC VEHICLES
STAKEHOLDERS AND
is ongoing AND SUB-SYSTEMS
SUPPLY CHAIN
The Taoyuan Aerotropolis project is the RIGHT VEHICLE TO
largest national urban plan covering an SUSTAINABLE BUSES APPROACH KEY
area of ha 4,565 and total investment of AND TRUCKS GOVERNMENT
over USD 16 billion. The goal is to STAKHOLDERS
transform the Taoyuan airport city into a
trade hub in Asia
SOLUTION FOR PORTS USE TAIWAN AS A
AND AIRPORT CITY LOGISTICS HUB TO
ASIA
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – TRANSPORT
LARGE EXPANSION OF ELECTRIC BUSES WITH 10,000
UNITS EXPECTED BY 2030
INDUSTRY DATA COMMENTS
NUMBER OF EV BUSES IN TAIWAN, 2013-2030 To deal with air pollution from vehicles, Taiwan government is
scraping out Phase I & II trucks and expects to implement
Euro 6 equal standard from Sept. of 2019
Taiwan government announced “Air Pollution Control Action
9K BUSES TO BE PURCHASED TO 2030
10 000 Plan” in end of 2017 and one of the policy goals is to replace
all city buses to EV buses by 2030
Among the 10,000 city buses, there are currently about 400
EV buses in Taiwan
The government has a plan to develop local EV bus industry and
set a requirement of local contents of 50% to get the
government subsidy for EV buses
There are five Taiwanese EV bus vehicle assembly
companies, four have technology cooperation with Chinese
companies (like BYD, Golden Dragon etc.). RAC Electric
84 135 168 249 313 400 Vehicle is the one with own design and manufacturing
capabilities
2013 2014 2015 2016 2017 2018 2030
For key components, Taiwan can supply power, battery, battery
(f)
management system, transmission controller, telematics…etc.
COMPANIES NEED TO BE AWARE OF THE TIMELINE AND POLICY OF THE GOVERNMENT PLAN
SOURCE: ARTC; EXECUTIVE YUAN , MOTC
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – TRANSPORT
SIGNIFICANT OPPORTUNITIES IN SECTORS RELATED TO
METRO AND RAILWAY CONSTRUCTION AND UPGRADES
INDUSTRY DATA COMMENTS
BUDGET FOR RAILWAY CONSTRUCTION AND UPGRADE, Total budget for the railway construction in the Forward-looking
TOTAL BUDGET = USD 1.4 BILLION, 2019-2020 Infrastructure Development Program, Phase II (2019-2020) is
USD 1.4 billion. The program consists of 5 sub-projects.
3% 2% The biggest of the 5 sub-projects, “Upgrade and improve
conventional rail services in Eastern Taiwan”, covers
electrification of the round-the-island railway system, dual
tracks for the eastern part and smart ticket and control
25% systems
48% In addition, the Taiwan Railway Administration will procure
1,300+ trains, including 127 locomotives and 60 special bio-
diesel/energy storage trains which create opportunities for
board equipment and control systems
22%
Major plans in the “Promote urban mass rapid transit” sub-
project include the new Sanying Metro Line in New Taipei City
and Aerotropolis City in Taoyuan
Upgrade and improve conventional rail services in Eastern Taiwan
Move rail tracks above or underground, speed up commuter services Major plans for sub-project “Move rail tracks above or
underground, speed up commuter services” include the cities of
Promote urban mass rapid transit
Taichung, Taoyuan, Tainan and Chiayi
Link highspeed and conventional rail into an integrated network
Build tourism-oriented rail systems for central and southern Taiwan
KEY TO PARTNER WITH LOCAL ENGINEERING COMPANIES FOR INFRASTRUCTURE PROJECTS
SOURCE: NEWS; EXECUTIVE YUAN
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – TRANSPORT
AEROTROPOLIS PROJECT TO UPGRADE THE AIRPORT
CITY TO A TRADE AND LOGISTICS HUB IN ASIA
INDUSTRY DATA COMMENTS
Taiwan is geographically located at the center of the Asia-
Total Area: ha 4,565 Pacific, connecting Northeast and Southeast Asia. The
Total Investment estimation: USD 16 billion average fly time from Taipei to the six major cities Tokyo, Seoul,
Beijing, Shanghai, Hong Kong and Singapore is 3 hours
The Taoyuan Aerotropolis project is the largest national urban
development plan. It covers an area of ha 4,565 and total
investments of over USD 16 billion
The project aims to transform the stand-alone airport and its
surrounding area into an integrated Aerotropolis connecting
business, manufacturing, meetings/exhibitions, residence and
leisure/entertainment, thus turning the airport city into a trade
hub in Asia
The land resumption process is undergoing and the project is
planned to be completed by 2023
Taiwan has 7 Free Trade Zones (FTZ) of 6 harbours and 1
airport that allow companies to do simple value-added
service at FTZ before exporting
IKEA Food uses Kaohsiung FTZ as its logistic hub in Asia
for its geographical location and cost competitiveness
SOURCE: TAOYUAN AEROTROPOLIS; TIPC
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – TRANSPORT
SUPERIOR SERVICE AND STRONG BRAND RECOGNITION
KEY TO BUILDING SCANIA’S SUCCESS
THE COMPANY KEY SUCCESS FACTORS
LONG-TERM AND STRATEGIC COOPERATION WITH
PARTNERS
Scania works long-term and closely with local bodybuilder
partners
EXTENSIVE AFTER-SALES SERVICE NETWORK
Scania is a world-leading provider of sustainable transport
solutions for trucks and buses Scania has the most extensive service network among
European brands with 11 workshops in four different
regions in Taiwan to serve their customers
VALUE ADDED SERVICES TO CUSTOMERS
Scania provides driver services like training and coaching
THE CASE courses and financing credit service
Griffin Automotive has been a 100% owned subsidiary of STRONG BRAND IN TAIWAN
Scania in Taiwan since December 23rd, 2005 Scania has a long history in Taiwan since the distributor
time and has built a strong brand name
On the Taiwan market, Scania imports chassis and work
with Taiwanese bodybuilder partners
The company does not only sell new Scania trucks and “It is important to follow the government’s policy direction. The
buses but also provides maintenance and repair services government’s incentives to scrap old trucks for air pollution drives
and support our market growth for 2017.“
Scania has a leading position in trucks and coach buses
markets with 15-20% of market share in Taiwan
Chen Fang Lee, Sustainability, Scania Taiwan
SOURCE. INTERVIEW
BUSINESS SWEDEN 28 JANUARY 2019 28AGENDA
Business Sweden in APAC and Taiwan
Taiwan overview
Key business opportunities for Swedish companies
High-tech manufacturing
Transport
Healthcare
Energy
Retail and food
Sweden in Taiwan
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HEALTHCARE
TAIWAN HAS AN ATTRACTIVE HEALTHCARE MARKET
BUT WITH CERTAIN CHALLENGES
HEALTHCARE AREAS OF OPPORTUNITY KEY CONSIDERATIONS
Taiwan has a well-developed healthcare
system with universal health insurance
coverage for its whole population of 23M PHARMACEUTICALS UNDERSTAND THE
Taiwan has a high-quality healthcare LOCAL REGULATION
system which is in continuous need of FOR REGISTRATION,
niche and high-quality healthcare ASSISTIVE DEVICES/ REIMBURSEMENT
solutions IMPLANTS AND SALES
The rapidly aging population is becoming a
great financial burden on the healthcare
CONTROL PRODUCT
system INFECTION CONTROL LICENSES TO REDUCE
Increased costs within the total fixed budget RISKS
finance model is the biggest challenge for
Taiwan’s healthcare system. Use of digital CONNECTED
technology is the trend to reduce cost and HEALTHCARE CAREFULLY SELECT A
to increase quality of care
SUITABLE PARTNER
The great financial burden on the WITH THE RIGHT
healthcare system has led to slow DENTAL AND MEDICAL CHANNELS IN TAIWAN
reimbursement processes and lower COSMETICS
reimbursement amounts for innovative
medical devices and medicine
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HEALTHCARE
ONE OF THE MOST DEVELOPED HEALTHCARE SYSTEMS
IN ASIA WITH UNIVERSAL INSURANCE COVERAGE
INDUSTRY DATA COMMENTS
NO. OF HOSPITALS RANKING WORLD TOP 200, 2015 Taiwan’s National Health Insurance (NHI) is a government-
based single-payer system with coverage for its entire 23M
93 population
Medical expenditure hovers around 6% of national GDP
20
10 9 9 8 4 4 4 (compare to Japan 11%, Sweden 11% and South Korea 7%)
Despite a low total budget, Taiwan still provides a high quality of
US
Canada
Taiwan
China
Japan
France
Germany
Switzerland
Sweden
healthcare, which is evident from Taiwan’s ranking as world
number 4th and Asia number one for number of hospitals
ranked among the world top 200
DEMOGRAPHIC DATA BY YEAR AND AGE GROUP (million)
Keeping a sustainable system despite increases in cost and a
25 fixed budget model is the biggest challenge Taiwan’s healthcare
system is facing
20
15 Taiwan is one of the fastest aging societies in the world which
10
causes rapid increases in healthcare costs. In 2017, 14% of
elderly people amounted to about 40% of the total NHI cost
5
0 ICT technologies like Cloud and Big Data are used to reduce
cost and to increase quality of care. For example, NHIA
1965
1980
1995
2030
2045
1950
1955
1960
1970
1975
1985
1990
2000
2005
2010
2015
2020
2025
2035
2040
2050
implemented a Medical Cloud system for prescription, diagnosis
0-14 years old 15-64 years old Above 65 years old and images data sharing to reduce repeated medication and
diagnosis
THE TAIWANESE MARKET IS WELL DEVELOPED AND IN NEED OF NICHE AND HIGH-END MEDICAL PRODUCTS
SOURCE: RANKING WEB OF HOSPITALS; MINISTRY OF HEALTH AND WELFARE
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HEALTHCARE
TAIWAN RELIES ON IMPORT FOR HIGH-TECH MEDICAL
DEVICES AND MEDICINE
INDUSTRY DATA COMMENTS
IMPORT OF MEDICAL DEVICE BY CATEGORIES, 2014-17 Taiwan relies on import of high-end medical devices
like imaging implants, orthopedics and new drugs
1,000 The local biomedical industries focus on low- to middle-
CAGR end devices like blood pressure meters, contact lenses,
Patient Aids +5.3% powered wheel chairs and generic drugs etc.
800
Foreign companies need to have a local entity or an
Orthopaedics &
assigned local agent to register products with the
+4.8%
Prosthetics Taiwan FDA
600
Taiwan has a risk-based medical device registration
Dental products +3.8%
system with three classes
400
After the registration is done, the companies can
Diagnostic +4.4% apply for reimbursement with NHIA
Imaging
200 The great financial burden on the healthcare system
Consumables +3.8% has led to slow reimbursement processes and lower
reimbursements for innovative medical devices and
0
2014 2015 2016 2017
drugs
SOURCE: FITCHSOLUTION; MINISTRY OF HEALTH AND WELFARE
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – HEALTHCARE
ASTRAZENECA SUCCEEDS IN TAIWAN THROUGH CLOSE
COLLABORATION WITH LEADING LOCAL PARTNERS
THE COMPANY KEY SUCCESS FACTORS
STRONG R&D COLLABORATION WITH PARTNERS
Collaboration with 75+ Taiwan medical societies and 37 research
partners in Taiwan
AstraZeneca is a global, science-led biopharmaceutical
company that focuses on the discovery, development and USD 45M+ clinical trial investment in Taiwan between 2013-18,
commercialization of prescription medicines, primarily for the number one in lung cancer clinical trials in Taiwan
treatment of diseases in three therapy areas – 1. Oncology, PURSUE TAIWANESE MEDICAL EXCELLENCE
2. Cardiovascular, Renal & Metabolism and 3. Respiratory
AstraZeneca collaborates with leading local partners to:
AstraZeneca established its first Taiwan office in 1948 Raise the standard of asthma care by supporting the launch of
500 Asthma Centres of Excellence in 2018
THE CASE Increase the rate of early diagnosis and treatment for diabetes
SUPPORT TAIWANESE BIOMEDICAL INNOVATION
Taiwan is the fourth biggest market for AstraZeneca in Asia
thanks to Taiwan’s national health insurance (NHI) system with Connect leading Taiwanese research with AstraZeneca’s strategic
universal coverage, where each patient has access to a broad R&D processes
range of healthcare solutions. This creates a big market for Support government’s flagship biomedical innovation efforts
medical companies in Taiwan
”Taiwan has a developed healthcare system and a great
Taiwan’s key challenge is making new medicine available for biomedical R&D environment. By working with the very best local
patients, particularly in the oncology field, due to the NHI being doctors, hospitals, researchers and government departments, we
limited by a fixed budget. The great financial burden makes it succeed in bringing life-changing medicines to Taiwanese
difficult to reimburse new medical solutions. This is also the patients.”
biggest challenge facing most medical companies on the
Taiwanese market Simon Manners, Company President, AstraZeneca Taiwan
SOURCE. INTERVIEW
BUSINESS SWEDEN 28 JANUARY 2019 33AGENDA
Business Sweden in APAC and Taiwan
Taiwan overview
Key business opportunities for Swedish companies
High-tech manufacturing
Transport
Healthcare
Energy
Retail and food
Sweden in Taiwan
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES - ENERGY
TAIWAN INVESTS IN GREEN ENERGY TRANSFORMATION
WITH KEY FOCUS ON WIND AND SOLAR
ENERGY AREAS OF OPPORTUNITY KEY CONSIDERATIONS
Taiwan has the long term goal to phase
out nuclear energy and an ambition move SOLUTIONS AND MAP THE
toward 20% renewable energy by 2025 CONSULTING SERVICE STAKEHOLDERS AND
FOR NUCLEAR POWER UNDERSTAND THE
The total budget for the decommissioning
PLANT DECOMISSION VALUE CHAIN
of nuclear power plants amounts to USD
2.3 billion and covers 6 reactors* OFFSHORE WIND TARGET THE KEY
The renewable energy is mainly solar POWER SUBSYSTEM, DECISION-MAKERS BY
power and offshore wind power CONSULTING OWN PRESENCE OR
ENGINEERING, O&M THROUGH PARTNERS
5.5 GW of offshore wind power capacity
has been awarded and is to be completed
OTHER RENEWABLE
by 2025 FOLLOW
ENERGY, OCEAN
The offshore wind power market has ENERGY, BIOGAS, DEVELOPMENT OF
attracted international developers like WASTE TO ENERGY GOVERNMENT PLAN
Orsted, WPD, CIP and NPI to develop
Taiwan’s offshore wind power market and
position Taiwan as a hub for Asian ENERGY-SAVING IMPORTANT TO
offshore wind development EQUIPMENT AND APPORACH
SOLUTIONS THE MARKET NOW!
* DUE TO THE REFERENDUM IN NOVEMBER 2018, IT IS UNLIKELY THAT POWER PLANT 3 WILL BE DECOMMISSIONED BY 2025.
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES - ENERGY
TAIWAN HAS AMBITIOUS PLANS TO INCREASE
RENEWABLES TO 20% BY 2025
INDUSTRY DATA COMMENTS
ENERGY STRUCTURE CHANGE FOR ELECTRICITY, 98% of energy is imported in Taiwan. Heavy reliance on
2016 & 2025 SET BY BOE 2016, % * energy imports threatens Taiwan’s energy security and
increases risks
2016 2025
Increasing local production of renewable energy is a
way to strengthen Taiwan’s energy security
46%50%
36% The renewable energy is to be increased to 20% in
28% 2025, mainly by solar and offshore wind power
20%
12% The government has the ambition to phase out nuclear
1% 5% 1% 1%
energy. Currently, Taiwan has 3 operating nuclear
Gas Coal & Oil Nuclear Renewables Hydro power plants with 6 reactors, which account for 12% of
the total power production
INITIALPLAN FOR DECOMMISSION OF NUCLEAR POWER The plan for phasing out or decommissioning nuclear
PLANTS*
power will be clarified during first half of 2019
2 reactors per plant, the total budget is about 2.3 USD billion for The total decommission budget amounts to USD 2.3
6 reactors
Plant #1 Plant #2 Plant #3
billion for the 6 reactors
Also to control air pollution, Taiwan will reduce coal-
2018-19 2021-23 2024-25 based power plants and increase the use of natural gas
to 50%
ENERGY TRANSFORMATION CREATES OPPORTUNITIES IN NUCLEAR DECOMMISSIONING AND RENEWABLE ENERGY
* DUE TO THE REFERENDUM IN NOVEMBER 2018, IT IS UNLIKELY THAT POWER PLANT 3 WILL BE DECOMMISSIONED BY 2025. THERE
SOURCE: BUREAU OF ENERGY ARE CURRENT DISCUSSION TO PROLONG THE LIFETIME OF BOTH REACTORS, WHICH WILL INFLUENCE THE ABOVE TIMELINE
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES - ENERGY
INTERNATIONAL DEVELOPERS VIEW TAIWAN AS A HUB
FOR ASIAN OFFSHORE WIND DEVELOPMENT
INDUSTRY DATA COMMENTS
OFFSHORE WIND ACCUMULATETD DEVELOPMENT The goal is to increase the percentage of renewable energy
CAPACITY AND CONSTRUCTION PERIOD from 5% to 20% by 2025, mainly through solar (20 GW) and
offshore wind power (5.5 GW)
Taiwan has a Renewable Energy Act in place and works with a
PHASE III
Feed-in-Tariff system to promote renewable energy development
Deeper
PHASE IIB water zonal 5.5 GW of offshore wind power development capacity has been
Zonal application awarded to 7 developers through 14 projects in 2018. The
PHASE IIA TBA
application by investment amount is estimated to be about USD 35 billion
Zonal auction
PHASE I application by The offshore wind power market has attracted international
selection developers like Orsted, WPD, CIP and NPI to develop the
Demo
Taiwan offshore wind power market and position Taiwan as
5.7 GW a hub for Asian offshore wind development
Local content is required by the Phase IIA – Zonal Application by
Selection process, meaning that developers are required to use
4 GW local suppliers for part of its supply chain
0.36 GW
The guidance for the Phase III deeper water offshore wind
development is to be announced in 2019
2015-20 2018-25 2018-25 ?
IMPORTANT TO MAP OUT THE VALUE CHAIN IN ORDER TO IDENTIFY KEY STAKEHOLDERS TO APPROACH
SOURCE: BUREAU OF ENERGY
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – ENERGY
MINESTO INTENDS TO USE TAIWAN AS A BASE FOR
THEIR EAST ASIA EXPANSION
THE COMPANY KEY SUCCESS STRATEGIES APPLIED
LEVERAGE ON THE LOCAL R&D COMPETENCE AND FACILITY
TO FURTHER DEVELOP THE TECHNOLOGY
Established research cooperation with National Taiwan Ocean
Minesto is a world-leading marine energy technology developer University for local technology demonstration at test sites in
Their award-winning patented product, a subsea kite technology Keelung and ocean current sites in the Kuroshio current
called Deep Green, is applicable in areas where no other known Potential sites for commercial scale installation of the Deep Green
technology can operate cost-efficiently technology will be further developed
LEVERAGE ON LOCAL MANUFACTURE CAPABILITY FOR
PRODUCT DEVELOPMENT AND EXPORT MARKET
THE CASE
Taiwanese suppliers are capable of supplying components like
Taiwan is one of the few markets that has potential to harvest foundations and cables to the system
power from the Kuroshio current, a north-flowing ocean Engage with potential component partners for product
current on the west side of the North Pacific Ocean, a low- development and long-term cooperation for export markets
flow current
Minesto decided to set up a subsidiary in Taiwan in 2018 as “It is clear that ocean energy is needed to form a sustainable
their first location outside Europe to develop the Deep Green future energy mix in Taiwan. Our ambition is to be highly involved
technology in Taiwan by establishing research cooperation both in building substantial capacity for a predictable, clean energy
with a local university supply in Taiwan – and in shaping the country’s long-term energy
policy agenda.“
Minesto’s ambition is to use Taiwan as a base for their East
Asia business and the commercial roll-out of the company’s
technology in Asia Martin Edlund, CEO, Minesto AB
SOURCE. INTERVIEW
BUSINESS SWEDEN 28 JANUARY 2019 38AGENDA
Business Sweden in APAC and Taiwan
Taiwan overview
Key business opportunities for Swedish companies
High-tech manufacturing
Transport
Healthcare
Energy
Retail and food
Sweden in Taiwan
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – RETAIL AND FOOD
STEADY GROWTH OF HOUSEHOLD DISPOSABLE INCOME
IN TAIWAN WITH AVERAGE AMOUNT OF USD 34K
INDUSTRY DATA COMMENTS
ANNUAL HOUSEHOLD DISPOSABLE INCOME
BY FIVE DIVISIONS, 2017 (USD), TOTAL HOUSEHOLDS = 8.5 M
The average annual disposable household income in
Taiwan is about USD 34K with a CAGR of 2% between
A: 70K
2012-2017
B:40K The highest 20% of households has about USD 70K
in disposable income with a CAGR of 2.2% between
C:30K
2012-2017
D:20K
Taipei, Hsinchu, Taoyuan and Taichung are the four
E:10K cities ranked as having the highest household income
and expenditure
HOUSEHOLD EXPENDITURE BY CATEGORIES Solid economic growth is anticipated to drive wage and
25% 24% 2010 2017 consumer income growth. On the negative side, an
aging population and potential headwinds in global
17%16%
14%15% trade, upon which Taiwan is heavily reliant, might
13%13% 12%
11% constrain discretionary spending growth
10% 10%
3% 3% 3% 3%
Food Clothing Housing Furniture Health T&C RecreationRestaurant
THE HIGH PURCHASING POWER OF TAIWANESE CONSUMERS BRINGS OPPORTUNITIES FOR SWEDISH B2C COMPANIES
SOURCE: DIRECTOR GENERAL OF BUDGE, ACCOUNTING AND STATISTICS; IKEA WEBSITE
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – RETAIL AND FOOD
TAIWANESE CONSUMERS’ ACCEPTANCE OF FOREIGN
BRANDS IS HIGH
INDUSTRY DATA COMMENTS
POPULAR SWEDISH BRANDS IN TAIWAN Household expenditure on healthcare, restaurants, transport and
communication, furniture has increased between 2010 and 2017.
The expenditure on restaurants has seen the highest growth
Taiwan has the fourth-highest spending on dining out in the
Asia-Pacific region, trailing only South Korea, Australia and
Singapore, average spending is about USD 240 / month
Consumers’ acceptance of foreign brands is high. IKEA has
been in Taiwan for 20 years with 5 stores (the 6th one to be
opened in 2019) and H&M has opened their Asian flagship
store in Taipei
NUMBER OF IKEA STORES PER 10M PEOPLE Swedish food, home appliance and furniture, outdoor gear,
6 clothing, baby products, consumer electronics etc. are popular
items
5 Strong purchasing power and openness to foreign
brands makes Taiwan great for “middle class” The Swedish food exports to Taiwan grew rapidly in recent years
4 consumer products
with a CAGR of 44%, reaching SEK 195M in 2017. IKEA
3
Taiwan has among the highest percentage of food sales as part
2 of total turnover globally.
1
Taiwan has its own national standard called CNS. Consumer
0 products might require separate testing and certification
Hong Kong Singapore Taiwan Japan Malaysia S. Korea Thailand Indonesia
KEY TO LEVERAGE THE STRONG SWEDISH BRAND IMAGE OF GOOD DESIGN AND QUALITY
SOURCE: DIRECTOR GENERAL OF BUDGE, ACCOUNTING AND STATISTICS *TRANSPORTATION AND COMMUNICAT ION
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – RETAIL AND FOOD
TAIWAN HAS AN BOOMING E-COMMERCE MARKET WITH
HIGH PENETRATION OF SOCIAL MEDIA
INDUSTRY DATA COMMENTS
Taiwan has the world’s third-highest rate of e-commerce
penetration (62%) after the US (66%) and the U.K. (77%)
The e-commerce market has grown at a rapid pace with a
EC Market Value EC PENETRATION market size of USD 37.6 billion in 2016 thanks to its well-
USD 38B 62% established infrastructure of distribution and payment
and high smartphone penetration
High penetration of social media with Facebook (77%),
Average Value Annual EC Order YouTube (75%) and LINE (Messenger app, 71%) which are
per order 1074M used as major digital marketing channels
USD 40
Considering the ready infrastructure and high
penetration of e-commerce, Taiwan is an easier e-
Smartphone Social Media commerce market compared to many less developed Asian
Penetration Penetration
markets
80% Over 70%
Taiwan is top 5 Google Play market by revenue (together
with Japan, US, S. Korea and UK). and Taiwan ranked
second in the Asian region for the percentage of time spent
playing mobile games per week
IMPORT TO CONSIDER OMNI CHANNEL SALES APPROACH WHEN ENTERING THE TAIWANESE B2C MARKET
SOURCE: CIC, TECH NEWS
28 JANUARY, 2019KEY BUSINESS OPPORTUNITIES – RETAIL AND FOOD
IKEA’S SUCCESS IN TAIWAN IS DRIVEN BY STRONG
BRAND, LOCAL ADAPTATION AND CHANNEL STRATEGY
THE COMPANY KEY SUCCESS STRATEGIES APPLIED
STRONG BRAND PERCEPTION AND VALUE FOR MONEY
PROPOSITION
Continuously invested in brand and lowering prices to drive higher
volumes
IKEA is a Swedish-founded multinational group that designs Have been able to maintain a good quality perception
and sells ready-to-assemble furniture, kitchen appliances
and home accessories LOCAL ADAPTATION
IKEA is among the world's largest furniture retailers Products developed specifically to meet Asian needs contribute to
15% of total turnover. Contributed to 75% of total growth 2018
Food menu adapted to local food culture. Highest share of food
sales globally in 2018
THE CASE
INTRODUCING E-COMMERCE AND NEW TOUCH POINT
IKEA has been in Taiwan since 1994 and currently has
national online sales coverage, 5 stores and 1 pick-up and E-commerce national coverage since December 2017. E-
order point in Taiwan commerce now 4% of total revenue
Pick up and order point in Hsinchu opened August 2016
IKEA will open its 6th store in Taipei in 2019
IKEA is the leading home furnishing company in Taiwan
with a market share of around 7% ”IKEA has over the last 24 years actively promoted Sweden and
Swedish design in Taiwan and thanks to a well-implemeted concept
been able to reach the hearts of the many people in Taiwan”.
Hugo Asplund, Deputy General Manager, IKEA Taiwan
SOURCE. INTERVIEW
BUSINESS SWEDEN 28 JANUARY 2019 43AGENDA
Business Sweden in APAC and Taiwan
Taiwan overview
Key business opportunities for Swedish companies
Sweden in Taiwan
28 JANUARY, 2019SWEDEN IN TAIWAN
SWEDEN AND TAIWAN HAVE A STABLE TRADE
RELATIONSHIP WITH STRONG GROWTH SINCE 2013
EXPORT & IMPORT DEVELOPMENT MILLION SEK, SWEDEN & TAIWAN
7000 Largest categories 2017:
Exports from Sweden Imports from Taiwan
1. Machinery and equipment
6000 2. Metalworking
3. Nails, pins, screws, bolts
4. Transport & vehicles
5000 5. Strollers, sporting goods,
toys, games
4000
Largest categories 2017:
3000 1. Transport & vehicles
2. Machinery & equipment
3. Iron & steel
2000 4. Medicine & pharmaceuticals
5. Pulp & paper
1000
0
SOURCE: SCB, KOMMERSKOLLEGIUM
28 JANUARY, 2019SWEDEN IN TAIWAN
SWEDISH COMPANIES REPRESENT DIVERSE SECTORS
AND ARE PRIMARILY PRESENT TO SELL TO TAIWAN*
INDUSTRIES REPRESENTED OPERATIONS RESPONSIBILITY PURPOSE FOR PRESENCE
RESPONDENTS’ OFFICES IN TAIWAN ARE MAIN PURPOSE(S) FOR HAVING OPERATIONS
RESPONSIBLE FOR BUSINESS / OPERATIONS IN TAIWAN:
IN FOLLOWING COUNTRIES / REGIONS:
28% 20%
Industrial Equipment 4% 5%
Retail / Consumer 4% 8%
& Solutions Goods 4%
4%
3%
20% 20% 26%
Business Services 15%
Automotive /
/ Banking Transport
61%
66%
10% 4%
Telecom / Energy
Electronics
Taiwan
Sell to the Taiwanese market
Taiwan + APAC
Taiwan + China, Japan, South Korea Sell to other markets
Taiwan + China, Japan, Vietnam, USA
4% 4% Taiwan + China, Hong Kong Manufacture for other markets
Travel Services Pharma / Medical Taiwan + South Pacific (SEA, AU, NZ)
Technology Manufacture for the Taiwanese market
Taiwan + Scandinavia
SOURCE: * DATA BASED ON SURVEY WITH 28 RESPONDENTS, THE SWEDISH CHAMBER OF COMMERCE TAIPEI’S BUSINESS CLIMATE SURVEY
28 JANUARY, 2019SWEDEN IN TAIWAN
MORE THAN 80 SWEDISH COMPANIES ARE PRESENT IN
TAIWAN IN A RANGE OF SECTORS*
MATERIAL& ENERGY & RETAIL /
TRANSPORT ICT / SECURITY HEALTHCARE
MANUFACTURING ENVIRONMENT CONSUMER
A LARGE NUMBER OF SWEDISH COMPANIES ARE ALSO DOING BUSINESS THROUGH DISTRIBUTORS
SOURCE: BUSINESS SWEDEN * ONLY EXAMPLE OF SWEDISH COMPANIES WITH PRESENCE IN TAIWAN
28 JANUARY, 20192019 Business Sweden
Copyright © Business Sweden
www.business-sweden.se/en/taiwan
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Business Sweden is owned by the Swedish Government and the industry,
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Business Sweden was founded on the first of January, 2013, by a merger
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Contact information
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