Shoppers’ Paradise

At nine o’clock in the morning, the department stores in Tai­pei’s toney east end have yet to open for business, but at some distance away from downtown, a big department store in ­Neihu District is packing the customers in like there’s no tomorrow.

Tour buses pull up one after another to disgorge shoppers in natty business suits and fashionable dresses, who swarm into the ritzy shopping establishment.

The shoppers in this case are from mainland China, and they’re hunting for high-end jewelry and cosmetics. While busy gobbling up the international brand names, they nevertheless make a point of picking up that quintessentially made-in-Taiwan product—a Ta­tung rice cooker. Their final way station is the first floor, where they stock up on lots of goodies for which Taiwan is especially well known, such as pineapple cakes, fine teas, dried fruits, nougat candy, and crispy cakes.

The ultra-upscale Ever Rich store in ­Neihu, which opened just this past February in a building with a footprint well in excess of 3,000 square meters, is a must stop for well-heeled tour groups visiting Taiwan. The company was recently awarded a 2013 DFNI Asia/Pacific Award for Travel-Retail Excellence in the category of “best retailer operating only in their own country in the Asia-Pacific region.” The ­Neihu store has quickly taken over as a key flagship location for Ever Rich, and is one of the biggest urban duty-free stores anywhere in Asia.

For most people in Taiwan, the company’s name fails to ring much of a bell, but anyone who takes an international flight or travels to one of Taiwan’s offshore islands is sure to come across it. Ever Rich stores operate at Tao­yuan International Airport, Tai­pei Song­shan Airport, Tai­chung Airport, and Kao­hsiung International Airport, as well as the harbors in Kee­lung, ­Penghu, Kin­men, and Green Island.

Ever Rich has benefited from a steady growth in the numbers of international arrivals and departures in Taiwan in recent years. Industry observers say its annual operating revenues come to tens of billions of NT dollars.

Despite the company’s solid success, the general public knows little about the people running it because of their preference for keeping a low profile and focusing on business.

Ever Rich Duty Free Shop has built a 12.2-meter-tall “plant wall” with over 3,000 plants in Terminal 2 at Taoyuan International Airport. While showing the world how beautiful Taiwan can be, the highly ­acclaimed plant wall also acts as an air filter.

The key mover and shaker has been Simon ­Chiang, its 62-year-old chairman.

Chiang, born the eldest of numerous siblings in a poor farming family in ­Chiayi County, discontinued his studies after elementary school graduation to help with the family finances. He made his way north to Tai­pei to take up an apprenticeship in a leather goods workshop.

Intelligent and nimble-fingered, ­Chiang soon mastered the skills for making leather bags, and after four years was a full-fledged craftsman, earning a master craftsman’s wage.

At age 18 he decided to start his own company with NT$30,000 scraped together through loans from banks and informal credit groups.

At a time when most consumers couldn’t afford upmarket items, well-made and inexpensive genuine leather bags from Taiwan were huge favorites among Japanese tourists in the 1970s. ­Chiang managed to make his first pot of gold—NT$300,000—before starting his mandatory stint in the military.

But ­Chiang had his sights set on bigger things. After finishing his military service, he discovered that the spending habits of high-end consumers in Taiwan and Japan were changing as Taiwan’s economy began to grow by leaps and bounds. Whereas before they’d gone in big for simple yet sturdy genuine leather bags, now they were showing a preference for international brand name bags that made a statement about the user’s social status. ­Chiang wangled his way into contact with chic Western brands and worked out distributorship arrangements with them. His days as proprietor of a leather bag workshop gradually slipped into the past as he transformed into a distributor of the top names in luxury goods.

There was a time in his heyday when ­Chiang was distributing an extraordinary collection of leading brand names, including GUCCI, Celine, COACH, a.testoni, and Shu Ue­mura. Armed with nothing more than his elementary-school education, he methodically picked up English by listening to tapes, and used it to hammer out one business deal after another. Thanks to his experience as a luxury goods distributor, ­Chiang had an excellent set of contacts and logistics expertise that stood him in good stead when it came time to embark upon the retailing of duty-free goods.

The large, ornate Ever Rich flagship store in Neihu has just about every sort of international luxury good that a shopper could be looking for, plus distinctive local products that make for gifts with an unmistakably Taiwanese character. For many visitors from overseas, this store is a must stop on the itinerary.

As Taiwan’s luxury goods market matured, Western brands one by one terminated their distributorship arrangements in the 1990s and jumped directly into the market themselves to cut out the middleman. ­Chiang had to look for some other business model, and in 1995 founded Ever Rich to sell duty-free goods. Competitors were fewer, but the barriers to market entry were high.

Before Ever Rich hit the scene, the duty-free market in Taiwan was pretty much locked up by DFS Taiwan, which had strong political connections. Getting into the market was a dauntingly difficult proposition.

But the upstart Ever Rich managed to get a toe in the door. In 1997, with Kaohsiung International Airport preparing to re-award its duty-free concession, a decision had already been made in favor of DFS Taiwan, but the DFS bid was invalidated due to botched paperwork. The contract went to the second-place bidder, Ever Rich, thus opening a new chapter in the history of duty-free shopping in Taiwan.

But success for Ever Rich was anything but assured in the early days after the jump into duty-free retailing. Administrative vice president Kevin C.T. ­Chiang, the company founder’s 30-year-old son who is now being groomed to eventually take over the reins, recalls that Ever Rich, as a newcomer to the sector, needed to raise its credibility, and so worked through its network of contacts to land an equity investment from the Evergreen Group, which was interested in duty-free retailing.

With the prestigious backing of the Evergreen Group, Ever Rich gradually began establishing steady relationships with suppliers. Soon it branched out to Terminal 1 at Tao­yuan International Airport, and then set up a duty-free shop on Min­quan East Road in Tai­pei.

The large, ornate Ever Rich flagship store in Neihu has just about every sort of international luxury good that a shopper could be looking for, plus distinctive local products that make for gifts with an unmistakably Taiwanese character. For many visitors from overseas, this store is a must stop on the itinerary.

Prior to the year 2000, Taiwan only took in about 2.3 million international arrivals per year, less than a third of the 7.3 million coming in more recently. Moreover, airport shopping facilities at that time were not particularly comfortable or service-oriented. Even travelers from Taiwan strongly preferred to patronize more attractive duty-free shops overseas.

Such poor conditions made it extremely tough for Ever Rich to grow its business in those early years. Things went so poorly, in fact, that the Evergreen Group actually sold off its stake in the company.

But Simon ­Chiang was confident about the prospects for Taiwan’s tourism industry, and wouldn’t give up easily. To entice customers into his duty-free shops, he decided to run them the same way other luxury goods retailers are run. He started spending big to renovate shops that had been criticized for looking like low-end “dollar stores.” ­Chiang redesigned them to achieve a spacious, airy, and decidedly upmarket look. The sales staff, provided with beautifully tailored uniforms every bit as attractive as those worn by flight attendants, were trained to handle nettlesome customers with a smile. Suddenly, duty-free shopping became one of the nicer things about international travel.

On top of that, Ever Rich went in big for rigorous professional training. All store employees were required to regularly attend a prescribed number of hours of sales courses and to pass tough tests in order to continue in frontline sales positions.

Kevin ­Chiang points out that members of the Ever Rich sales staff are expected to have an encyclopedic understanding of the legal and regulatory requirements of airports in different countries around the world. In some countries, for example, travelers are not allowed to carry liquor onto a plane, so store employees have to avoid selling liquor to anyone traveling either directly or via connection to such a country. It would be a shame if someone spent big on a fine wine only to have it confiscated at the airport.

Kevin ­Chiang notes with pride: “A lot of service-sector firms like to hire people who’ve worked for Ever Rich because anyone who’s been through our training regime is sure to be well qualified to handle all sorts of challenges.”

The large, ornate Ever Rich flagship store in Neihu has just about every sort of international luxury good that a shopper could be looking for, plus distinctive local products that make for gifts with an unmistakably Taiwanese character. For many visitors from overseas, this store is a must stop on the itinerary.

Most people assume that duty-free shops have high profit margins. But precisely because they enjoy exclusive concessions, their costs are different from those of other retailers. For example, in Taiwan an airport duty-free shop has to fork over a concession fee (20% of gross sales) to the National Treasury, while store space also rents for a very pretty penny. And an in-town duty-free shop must pay a commission to tour group operators to get them to take their group members in.

To increase its gross margin, Ever Rich has opted to carry its own inventory rather than sell on consignment.

Carrying its own inventory affords the advantage of greater control over pricing and potentially higher profits, but the downside is that the company must take a hit on anything that fails to sell. Making good purchasing decisions is thus a key determinant of profitability.

Its long years of experience as a luxury goods distributor has been Ever Rich’s biggest asset. The company has a 100-person purchasing team that includes Simon ­Chiang’s daughter. The team scours the globe for the luxury goods most likely to please customers.

Kevin ­Chiang explains that purchasing requires highly developed professional expertise. You’ve got to anticipate what’s going to be in fashion over the next couple of seasons, and you’ve also got to make purchases targeted to the tastes of different market segments.

Ever Rich’s ­Neihu District and Min­quan East Road shops in Tai­pei, for example, are frequented by very different clientele. The ­Neihu shop is popular with mainland Chinese tour groups, while independent travelers from Japan constitute the mainstay at the Min­quan East shop, so the two shops have to display their luxury goods in very different ways.

“Customers from the mainland like the watches, T-shirts, and bags they buy to have big, conspicuous logos that people will notice. But Japanese customers are just the opposite. They prefer elegant designs and understated logos.”

Ever Rich once received a national award in recognition of its ­dedication to community service. In the photo at left, we see ­company founder Simon Chiang at an orphanage in Taoyuan County making dumplings with the children. The photo below shows company vice president Kevin Chiang on a 2011 trip to Aceh Province in Indonesia to help build a local school.

But there’s another entire aspect to the Ever Rich approach. Beyond making money, the company is very concerned about “sharing the wealth” and giving back to society. And it is an active participant in efforts to improve the overall environment for tourism in Taiwan.

Since 2006, Ever Rich has taken part in “operate, transfer” (OT) and “reconstruct, operate, transfer” (ROT) renovation projects at the international airports in Tao­yuan and Kao­hsiung. People have been especially impressed by the project at Terminal 1 in Tao­yuan, where the stodgy old departure lounges have emerged with innovative theme-based designs that showcase the unique culture and beauty of Taiwan.

Ever Rich is conservatively estimated to have spent at least NT$1.2 billion on the Terminal 1 renovation project. Throw in operating and maintenance costs, and it is clear that the firm’s total outlay has far exceeded the contractually stipulated NT$1 billion.

From senior officials at the Civil Aeronautics Administration to top executives at Tao­yuan International Airport Corporation, pretty much everyone agrees on one point: “Ever Rich is the airport’s best tenant ever!”

Ever Rich, which stresses the importance of products with local character, has created all sorts of opportunities for international travelers to get to know some of Taiwan’s best domestically made products. The company dispatches employees to search high and low for delicious yet reasonably priced snack items, for example. It then approaches the makers, who lack the resources for expensive marketing, and works with them to repackage their goods into distinctive gift items that go over big with consumers.

A major force in the promotion of tourism in Taiwan, Ever Rich has been one of the main sponsors of the immensely popular Taiwan International Balloon Fiesta in Luye Township, Taitung County.

Ever Rich has won high praise for its efforts over many years to spruce up Taiwan’s international gateways, develop its outlying islands, and support tourism. This past February, company founder Simon ­Chiang received an award from President Ma Ying-jeou in recognition of his outstanding contributions to tourism in Taiwan.

But ­Chiang doesn’t enjoy the spotlight. You’re much more likely to find him taking part in a community service activity somewhere. Dressed in yellow vests featuring the company’s red logo on the chest, Simon and Austin ­Chiang frequently lead company employees on weekend expeditions to make the world a better place by, for example, picking up trash on beaches, visiting orphanages, or providing assistance to distressed families.

Ever Rich has earned more than more profits in recent years. Thanks to the generosity of the Chiangs and their employees, the company has built up a reputation that no amount of money could buy.

The large, ornate Ever Rich flagship store in Neihu has just about every sort of international luxury good that a shopper could be looking for, plus distinctive local products that make for gifts with an unmistakably Taiwanese character. For many visitors from overseas, this store is a must stop on the itinerary.

The large, ornate Ever Rich flagship store in Neihu has just about every sort of international luxury good that a shopper could be looking for, plus distinctive local products that make for gifts with an unmistakably Taiwanese character. For many visitors from overseas, this store is a must stop on the itinerary.

The large, ornate Ever Rich flagship store in Neihu has just about every sort of international luxury good that a shopper could be looking for, plus distinctive local products that make for gifts with an unmistakably Taiwanese character. For many visitors from overseas, this store is a must stop on the itinerary.

The large, ornate Ever Rich flagship store in Neihu has just about every sort of international luxury good that a shopper could be looking for, plus distinctive local products that make for gifts with an unmistakably Taiwanese character. For many visitors from overseas, this store is a must stop on the itinerary.

In the departure lounge at Kaohsiung International Airport, the eye is naturally drawn to chairs modeled after ocean waves, and to a piece of installation art featuring glowing blue dolphins. The design plays strongly on Kaohsiung’s identity as a seaside metropolis.