Country Profile: Franchising Remains Strong in Taiwan
29 Apr 2021 - Location: Located in eastern Asia, Taiwan borders the East China Sea, Philippine Sea, Taiwan Strait, and the South China Sea just east of China. The island is about the size of Maryland and Delaware combined.
Language: Mandarin Chinese, Taiwanese, plus indigenous languages
Total Population: 23.6 million
Government: Semi-presidential republic
Religion: Mixture of Buddhist and Taoist
Economy: With a capitalist economy largely driven by industrial exports, Taiwan must manage fluctuations in global demand, which in recent years have surged thanks to a need for the technology components it produces. Its GDP grew by 2.7 percent in 2019 and nearly 3 percent in 2020 as the island effectively limited the spread of COVID-19. The U.S. is Taiwan’s second largest trading partner, with 13.2 percent of total trade and 12.2 percent of Taiwan imports. President Tsai Ing-wen has sought to promote greater economic integration with South and Southeast Asia through the New Southbound Policy initiative. Political differences with mainland China, which views the island as part of its territory, continue to pose economic challenges, such as China’s recent ban on Taiwanese pineapple imports.
News note: Taiwan is still officially the Republic of China, and while ruled separately since 1949, tensions remain and the U.S. and Taiwan don’t have formal diplomatic relations. President Joe Biden’s administration, though, has indicated increasing support for Taiwan, especially as U.S. military officials warn China could invade Taiwan in the next few years.
GDP (official exchange rate): $611.4 billion
Currency: Taiwan Dollar (conversion rate at press time: 1 TWD equals .035 USD)
Franchising in Taiwan: Dining, retail, beauty and health, real estate, technology and education are some of the well-represented franchise industries in Taiwan, with U.S. brands having a heavy presence. McDonald’s has more than 400 restaurants on the island, and Pizza Hut more than 250, according to the Taiwan Chain Stores and Franchise Association, and the restaurant segment is highly saturated. Local competition is increasing, as are capital investment costs, and U.S. concepts looking to enter Taiwan must demonstrate clear differentiators, both to consumers and potential investors.