By Sonia Su
Questions
In what ways has the arrival of supermarkets and hypermarkets influenced Kaohsiung (i.e., the consumption habits of Kaohsiung residents and traditional “wet” markets”)? What explains the survival of traditional markets?
Discussion
Taiwan is known as one of the four Asian Tiger economies that experienced unprecedented rapid industrialization and growth rates from the 1960s to the 1990s. Researchers in the 1990s were already finding that not only had increasing incomes influenced the demand for food, but urban lifestyles, more advanced marketing systems, and occupational changes were all also significant factors (Bouis and Huang 2001).
Going further back in time, elements from various cultures shape Taiwan today. Prior to the Japanese invasion of Taiwan in 1895 and the establishment of the Republic of China (Taiwan) in 1912, Taiwan had been occupied by Dutch and Spanish settlers. Japanese colonial rule lasted until the end of World War II in 1945, following decades of infrastructure development and Japanese attempts at assimilating the local population. In the 1930s, Japan’s Southward Policy helped to set Kaohsiung to become an industrial center, forming a north-south regional economic corridor from Taipei to Kaohsiung (Lin 2019). As the ROC government took over, millions of people crossed the strait from China to Taiwan. Taiwan thus shares many cultural similarities with Japan and China, particularly in food.
Traditional “wet” markets have served the majority of populations in Asia, and Taiwan’s southern metropolis of Kaohsiung is no exception. Nowadays, Kaohsiung’s 2.7 million residents face many choices when shopping for groceries, but for generations, the primary source of meat, fish, and produce was wet markets. These traditional markets are Taiwan’s oldest food distribution channels and retail outlets, along with roadside stalls and stores, all congregating near temples and central, high-traffic streets and neighborhoods (Lin 2009). Organized by independent vendors, both public and private wet markets generally operate in the mornings, due to the lack of refrigeration and storage, as well as limited quantities of fresh grocery items. Another feature includes bargaining over prices, which contributes to a sense of amity between customers and local vendors (Lin 2009).
However, the arrival of Western-style supermarkets in the late 1980s and 1990s presented wet markets with fierce competition, although it did not make them obsolete. These competitors offered “cleaner environments, better food safety, and one-stop shopping for customers who want to make their purchases in a more efficient manner” (Chen, et al. 2015). Interviews with locals in Taipei point to common factors that persuade them to visit supermarkets. These include discounts—which tend not to be found in traditional markets without haggling–wide availability of imported commodities; car parks, especially useful for rainy days; longer operating hours; and the pleasure of being able to walk around a more spacious, comfortable environment (Lin 2009). Ultimately, residents have specific purposes for frequenting both traditional and more modern markets.
Especially in light of the latest coronavirus outbreak, renewed attention has been called to wet markets selling wild animals, although the controversy is less apparent in Taiwan. By the end of February 2020, in an effort to curb the spread of the virus, China officially announced a ban on the trade and consumption of wild animals, which is “a multibillion dollar industry that employs millions of people” (Xie 2020).
As of 2018, Taiwan has about 10,000 convenience stores, 2,000 supermarkets, and a growing number of hypermarkets—or “superstores” that combine supermarkets and department stores (Su 2018). In 1989, the leader in hypermarkets, Carrefour, opened its first store in Asia in Kaohsiung. Due to the success of its Taiwan operation, the French retailer gradually expanded throughout the country and Asia. Jean-Luc Chéreau, the general manager in Taiwan from 1993 to 1999, used a newfound understanding of Chinese culture and ways of doing business with Chinese customers to lead Carrefour’s China expansion starting in 1999. Carrefour has been adapting to local tastes and budgets in Taiwan and China, while working with Chinese partners to expand hypermarkets from China’s megacities along the coast to the vast hinterland (Child 2006). As of writing, Carrefour has opened 137 hypermarkets and supermarkets in Taiwan, spread about evenly between the two formats (“A year of action”).
Several case studies have highlighted the “remarkable” growth of Carrefour in Taiwan, suggesting that Carrefour’s retail localization model is worth studying (Chung and Yahagi 2002). The term “glocalization,” the intersection of globalization and localization, is used to describe Carrefour’s specific attention to certain key strategies, while paying close attention to conditions such as local competition and government policy (Chinomona and Sibanda 2013). Taking into consideration local culture, language, and competition, as well as government retail policies, these key strategies focused on “glocalizing” entry, expansion, positioning, sourcing, promotion, and human resource development (Chinomona and Sibanda 2013). Moreover, structural changes helped contribute to the success of Carrefour’s expansion, as the retailer became the key shopping center and Westernization of society help stabilize its operations (Chung and Yahagi 2002). Case studies such as these aimed to provide practical guidance for global retail managers looking to enter Asian markets.
Indeed, more than four decades after the introduction of “Westernized” supermarkets, Taiwan’s traditional wet markets and mom-and-pop stores have faced intense competition. And yet, they remain “one of the most popular retail formats for many Asian families when they purchase daily food items and basic household goods” (Chen, et al. 2015). As such, what explains the persistence of wet markets? Key factors such as food quality (i.e., freshness) and social ties trump physical appearances:
“…food quality and relational benefit positively affect consumers’ satisfaction, and the effects of these increase with time; employee service has a positive effect on consumers’ satisfaction, but the effect decreases with time; and the ambience does affect consumer satisfaction, but the store design does not.” (Chen, et al. 2015)
In the end, service matters, and interestingly enough, retailers and local governments in both China and Taiwan recognize this (Zhenzhong, et al. 2016). University of Waterloo’s Zhenzhong Si, co-author of the book Organic Food And Farming In China: Top-Down And Bottom-Up Ecological Initiatives, told NPR:
“…many Chinese municipal governments are actually supporting the development of new wet markets in the city because it’s such an important source of fresh produce and meats for the majority of urban residents. It’s also a part of the urban lifestyle. Some people argue that it provides a space for socialization, you know, for people to talk to others. And a lot of people enjoy shopping at wet markets compared to supermarkets.” (Chang 2020)
Similarly, traditional markets remain a common sight throughout Kaohsiung and Taiwan. Shoppers believe in their better food quality and prefer the personal relationships with longtime vendors. Perhaps more importantly, local governments are working on renovating and modernizing markets, in hopes of maintaining traditions while promoting development (Lin 2019). So far, such renovation projects remain limited, with the Kaohsiung City Economic Development Bureau working with vendors to update signage and to improve sanitation and safety (Ke 2019).
Nevertheless, as part of a five-year revitalization plan from 2016 through 2020, the Taiwan Ministry of Economic Affairs has implemented a star-rating system for traditional market vendors, in an effort to “reverse the stereotypical image” of such markets, as well as improve market management efforts (“Trash Market Transformed”). In fact, traditional markets’ output value has fallen from NT$96.5 billion in 1999 to NT$69.8 billion in 2013, a decline of $1 to $2 billion each year (Ke 2019). The rating system gives markets one to four stars, with four being an “excellent” rating. However, the impact of revitalization efforts on wet market performance remains to be seen. A report summarizing the results of the government’s revitalization plan is likely to be published upon the five-year plan’s conclusion (“Improve management of traditional markets”).
