By John Liu, The China Post
Online shopping site Chunghwa Benefit One, a subsidiary of Chunghwa Telecom (CHT, ���عq�H), introduced the nation’s first paid membership program yesterday, which will supposedly sell merchandise for 15 percent less than other online retailers.
Consumers will have to pay a NT$960 annul fee in order to join the program. Chunghwa Benefit One said it is operating under the slogan ��zero gross profit,�� and all listed merchandise will be sold at cost. With the new venture, Chunghwa is eyeing becoming the bellwether in the e-commerce industry. Chunghwa Benefit One’s General Manager Simon Yeh (���_��) said his company considers Internet portal PChome a ��target,�� and Benefit One is aiming to recruit 100,000 paid members this year. The goal is to gross NT$700 million to NT$1 billion over the next three years, and NT$10 billion over five years. In addition, Chunghwa Benefit One will provide services that are exclusive on its website such as travel booking, home cleaning, parenting and education, etc. The company believes today’s consumer demands have become increasingly diversified. Joint Ventures with
Other Retailers Chunghwa Benefit One, which was launched in February last year, is a joint venture between Chunghwa Telecom, Itochu Corp. and Benefit One Asia of Japan. It is modeled after a Japanese operation that provides discounts to corporate employees. �@ The e-commerce platform currently has 170 business members, including Taiwan Semiconductor Manufacturing Company (TSMC, �x�n�q), CPC (���o), First Bank (�Ĥ@��) and Chunghwa Post. About 600,000 employees are enrolled, with TSMC employees making the largest number of purchases last year.�@ Chunghwa Benefit One has about 30,000 items that are developed in-house, and it aims to make more in the future. It has set the goal of developing 200,000 items by the third quarter, which the company believes is the optimal size. Nevertheless, Chunghwa Benefit One has formed a partnership with ET Mall, whose 400,000 products can be purchased through Benefit One at 4-percent off. Chunghwa is also in talks with retailer books.com.tw for potential joint ventures. Modeled on Costco In yesterday’s press conference, Chunghwa Benefit One demonstrated how it can save consumers money. A Tokuyo slow-motion treadmill listed on the website is priced at nearly NT$4,000 less than with other online retailers. The Microsoft Surface Pro 3 with a keyboard is priced at NT$40,624 for members, lower than the NT$44,448 price at Amazon. ��If a website is able to save you thousands of dollars, I can’t think of a reason that consumers don’t want to join,�� said general manager Yeh. Taiwanese shoppers are known for their sensitivity to prices. Google’s statistics for last year show that up to 70 percent of the local population compares prices before making a purchase.�@ Chunghwa Benefit One’s business model deviates from the traditional model adopted by other online retailers, who mostly draw their revenues from transaction fees and consequently are more interested in driving up the amount of trading on their sites. Nevertheless, Yeh believes his new paid membership model can work too, given the success Costco has had in Taiwan.