Updated: Jan 2
While a large number of entrepreneurs in Taiwan are in the technology or education industries, there are many who’ve converted a passion for making things into a way to make good money. At All Hands’ recent Retail Details event, entrepreneurs who make and sell their own products in Taiwan shared their journeys into retail.
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Alex Denner of Empress Hot Sauce explained how he ended up getting out of his 9-to-5 gig and into building his own hot sauce company with his girlfriend (and now business partner), Jane. “We were both working in New York City, me as an accountant and Jane as a product manager. One day we’d both gotten promoted at our respective jobs. We came home and talked about our day, and we felt very excited for each other, but not for ourselves. That was the moment we both decided that we needed a change,” said Alex. “Jane’s from Taiwan, and she was thinking of coming back to start her own international brand consultancy. I didn’t know what I wanted to do, but I knew I wanted it to be in food. When I arrived, I started out making chia seed ice cream, and hot sauces were just a side project. But every day I was making ice cream, I was thinking about what flavors I could combine together to make interesting hot sauces. Eventually I had so many people asking for the hot sauce I was giving away for free that I decided to switch things up and sell it. Now we sell on Pinkoi, DCard and at pop-ups around Taiwan.”
Josh Roberts and his wife Mandy of gabi+skin have a similar story of creating their own company after finding out their friends liked their products. “Mandy was searching for coffee scrub and could only find it overseas. The shipping costs would be more than the cost of the goods themselves, and it seemed simple enough to make, so we decided to try making it ourselves. We bought the ingredients, made a huge tub of it, and Mandy tried it out; it was so good, she screamed! We had so much left over that we decided to give some away to friends. Everyone we gave it to loved it, so we thought, well, let’s try selling it, and now we’ve been selling different skincare products in pop-up shops and online for the past 2 years.”
Melody Hsu of ViaSweat, much like Alex, was successful in her own career before trying her hand at something new. Originally from Taipei, Melody went to college in America and started her career in advertising there before coming back to Taiwan. Melody wanted to do her own thing, and spent a good amount of time thinking about what that could be. “Cupcakes were all the rage in the USA when I first got back to Taiwan. So I originally thought of opening my own cupcake bakery here, but then my husband gently reminded me that I don’t know anything about baking,” Melody laughed.
“But I also had an idea about how to make a better sports bra. I’m into exercise and always hated the experience of taking off a sweaty, wet sports bra after working out. I wanted to add a zipper to make that process easier. Thankfully, Taiwan is a great place to source functional fabrics: Taiwan makes and sources these materials for large sports brands like Under Armor, so finding suitable fabrics wasn’t a problem. I started out selling my designs online on Taiwan-based E-Commerce sites like Pinkoi, Shopee, Yahoo, and Zalora. Eventually, we began getting lots of orders – my house began to fill up with boxes of product, and then my husband joined the company full-time. He helps with packaging and shipping, and since he’s an accountant, he also manages our books. We’ve been going strong for 6 years now, and now we ship internationally as well. We’ve also done pop-up shops, and had our own retail store for a while.”
Distributing Your Products Online
Alex, Melody, and Josh were all happy to share their experiences with different distribution channels. “In Taiwan, you really need to build brand awareness,” Josh opined. “It doesn’t matter how good your products look; if Taiwanese haven’t heard of your brand before, they will not buy your products. And they are less likely to buy your products from your own website than from other online retailers – They want to see it being sold on Shopee, PCHome, or Pinkoi. Therefore it’s really important to get your brand out there via different distribution methods.”
The Importance of Physical Retail
“Our recent popup shop at Eslite is one of the ways we get our brand out there,” Josh continued. “It was very interesting running a popup shop inside of a department store – people thought we were store employees and would give us trash to throw out! But the store was great to us: we pushed and asked for lots of things, and they usually said yes. We asked to put advertising near the elevators and near the front of the store. We also asked to include a short audio ad in the store’s music/advertising loop. They agreed to everything, and for free, but we just had to ask for it. So remember to treat the store you do a popup in as a partner, and remember to ask them for help.”
“I also realized that there’s lots of psychology involved in retail,” Josh continued. “As a designer, I want all of the shelves looking beautiful and well stocked, but when the shelves look empty, that’s when people come to buy – the scarcity mindset comes into play. Something else important to remember is that retail shops are at the mercy of luck – our popup shop opened right before Taipei experienced a full month of rain, and then as soon as the rain stopped, the Taoyuan COVID cluster happened, which means almost no one came out to shop at all. So while our online sales remained stable, our popup experienced very rapid changes in revenue. But, it was still good for brand awareness.”
Melody also shared her considerable experience in setting up popup shops: “Product turnover in Taiwanese department stores is really high, so they’re always looking for new products to showcase and keep customers coming back. If you approach any of the big stores like Far Eastern or Eslite, they’re likely to say yes,” she said. “However, they’ll also try to sell you things that you probably won’t need, and that you don’t need to pay for, as part of the package. So make sure to say no to store marketing and packaging if you don’t need it. In addition, the store will charge you a ‘consignment percentage’ to sell your products in their store. The rates differ by industry, but the percentage can definitely be negotiated down. If you can bring it down by even just 1% or 0.5%, that’s a significant savings. So ask for it!”
Alex also agreed that popups and physical retail is important, especially for food products. “With food, getting people to try it is the first hurdle, and for brand awareness in Taiwan, nothing beats a crowd or a line. It can be hard to get people to try your product, but 60% of people who try our hot sauce then go on to buy at least one bottle. You also get instant validation of whether the people like it or not — you can see it on their faces pretty clearly.”
Getting Your Product Noticed
Alex then moved on to discuss another way of spreading brand awareness – online influencers. “Our products are unique in Taiwan: they’re very different from traditional Taiwanese hot sauces, and they’re brightly colored with distinctive packaging to boot. That makes it good fodder for influencers. They’ll share our product on their instagram and dare their friends to try it in videos – It’s great for us to see how they use the product. We can also turn around and share their content on our own social media.”
Melody mentioned that ViaSweat will distribute its products for free to influencers so that they will show them off on Instagram and other media channels. “Our sportswear costs dearly to produce, so unfortunately we can’t give it away to everyone. We have to be picky about which female sports influencers and KOLs we provide free products to, and so we have to know if they appeal to our audience: female sports enthusiasts. In order to tell if an influencer will be a good match for us, we watch who’s leaving comments on a KOL’s photos and videos. If it’s mostly men commenting, we tend to stay away. If its women commenting, it’s a great sign for us.”
During the Q & A portion of the event, the crowd had lots of questions for the panel of entrepreneurs.
EC Platforms for Taiwan Retail Newbies
When asked which online platform is best to get started with, Josh praised Shopee. “Shopee has 12 million users in Taiwan – that’s half the population! In addition, Shopee doesn’t take much money from you. There’s no platform fees, and we also see better returns than on PCHome. However, Pinkoi is also really good for us – it’s a lot like etsy in the USA, so it’s more craft and local focused. That means it’s easy to have really a strong following on Pinkoi.”
When another attendee asked about logistics and shipping, Josh was happy to explain his process: “For planning, we use Notion for logistics planning, process planning and working on factory issues. For sales, we mostly use Shopify – while it’s not the best for Taiwan, we don’t only sell in Taiwan, and Shopify is the best for distributing in most other countries. Also, as a professional branding and web designer, I’ve set up our own Webflow website to help with sending automated email and SMS messages, as well as syncing our website with our FB and Google ads. So our process works great for us.”
Consider Free Shipping
Finally, when asked whether or not it’s worth it to offer free shipping, all three retailers responded with a definite yes. “We’ve done tests to see which nets us more orders, and offered coupons specifically for free shipping, or coupons that reduce the price to a point that also pays for the shipping,” one retailer explained. “It turns out the free shipping coupon brings in more orders. Taiwanese love that.”