Costco remains the only warehouse club retailer in Taiwan. The company entered Taiwan in 1997 when it first settled in Kaoshiung.
Consumers are required to become members before they can shop at Costco, and its annual membership fee is TWD1,350. Costco is a large-scale capital-heavy business, leveraging low-cost, large pack-size consumer products to sell to individuals.
Warehouse clubs continued to post solid growth in Taiwan in 2021, despite the local COVID-19 outbreak in the summer. In response to the crisis, Costco maintained a continuous supply of fresh food and groceries and even sourced products by air to meet the robust demand in the short term.
Costco’s most important core competitive advantage is, “committed to creating the greatest value for customers”, which means ensuring customers can purchase the best products at the best prices. Reducing gross profit margins as much as possible to offer attractive retail prices helps to stimulate higher volume sales.
Costco targets the mass market, selling at low prices to achieve large economies of scale. As such, the majority of products are sold in extra-large pack sizes, which is also known as ‘Costco size’.
Costco’s high popularity and success has brought about significant impacts in the retailing landscape in Taiwan. To make the most of their membership, consumers often pay regular visits to Costco and stock up on groceries and other products which are good value due to their bulk format.
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Warehouse clubs are chained outlets that sell a wide variety of merchandise, typically situated in out-of-town locations, with a selling space of over 2,500 sq metres (and invariably over 4,000 sq metres in total size). Customers have to pay an annual membership fee in order to shop. The clubs are able to keep prices low due to the no-frills format of the stores and large volume SKUs. Example brands include Costco, Sam’s Club (Walmart), and Atacadão. Excludes sales attributable to membership fees and business-to-business sales. Also excludes cash & carry and warehouse outlets (which are typically oriented towards businesses, rather than consumers). Note: Local variants, such as atacarejos in Brazil, are included in this channel.
See All of Our DefinitionsThis report originates from Passport, our Warehouse Clubs research and analysis database.
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