Before the appearance of bright orange-colored Easy Shops specializing in a range of self-branded ladies' undergarments in 2001, shoppers only had two options when buying underwear: department stores or roadside stands. Now with 200 directly operated shops islandwide and 47 overseas, the Easy Shop chain, owned by the Sing Hwa Group, claims to have garnered an 11-percent share of the domestic female underwear market through complete vertical integration from manufacturing to retailing, marketing of its Audrey brand, provision of fitting rooms and training of professional staff offering high levels of advice and service.
"It was a bold decision from being a manufacturer to being a brand owner and a retailer, which eventually and fortunately proved correct," said Sing Hwa PR Manager Angel Huang.
A major incentive behind Sing Hwa's adoption of this strategy was the huge potential of the underwear sector: worth around US$757.6 million each year, it represents about one-third of Taiwan's entire domestic garment sector, according to a Nov. 23 report in the Chinese-language Commercial Times.
With such revenue potential, it was not surprising that foreign companies long ago targeted Taiwan's market. They also realized the importance of managing their own brands earlier than Taiwanese companies, which focused on fulfilling OEM or ODM contracts for international firms.
"By entering the local market earlier, foreign brands of women's underwear had advantages of advanced technology in manufacturing and better connections among retailers, particularly department stores," said Yeung Wai-hon, lecturer of the textile and clothing department in Fu Jen Catholic University.
According to the Commercial Times report, the two biggest foreign brands are Taiwan Wacoal Co. Ltd. and Triumph International, which control 25 percent and 17 percent of the domestic market, respectively. According to Taiwan Wacoal's Web site, the company was established in 1970 by Taiwanese entrepreneur Chen Jhao-yuan in conjunction with the Japan-based parent company Wacoal Corp., with each holding a 50 percent stake. Over the past 36 years, the company developed 12 sub-brands selling women's underclothes, pajamas and swimming suits, as well as children's garments and men's casual clothing. Triumph International, which was founded in Germany in 1886, launched operations on the island three years before Wacoal.
"The local market for ladies' undergarments falls into two different categories," explained associate professor Tony Lee, also of Fu Jen's textile and clothing department, identifying them as "high-end products, usually with recognizable foreign or local brand names, and low-end products, such as those sold cheaply in night markets."
High-end products now account for 64 percent of the entire female underwear market on the island and low-end products for 36 percent, the Commercial Times article claimed. Yeung explained that, in confronting foreign brands' long-term influence and larger market share on the island, domestic underwear companies had switched their corporate strategy from simply manufacturing to promoting their own brands. In addition to Sing Hwa, other key players included Esoniee International Co. Ltd. and Sophir International Co. Ltd., which launched the Mode Marie and Swear brands to take a larger share of the lucrative ladies' lingerie pie. Recent trends are not just about fashions, he added, but also focus on adjustable underwear that fit the wearer's stature, firm up the fat of the body, support the spine and correct the posture.
"We are not targeting the 36 percent of the underwear market taken by low-quality underwear from Asian countries; rather, we are attempting to compete with foreign brands," said Huang. The prime impetus for launching the Audrey brand and Easy Shop chain, she said, was the withering returns from sales in department stores.
Huang claimed that the company had become the No. 1 local brand through creative marketing strategies, such as issuing VIP cards to repeat customers, having promotional discounts, and its policy of allowing customers to return products within a certain period if dissatisfied.
Although the top domestic companies still lag behind top foreign companies in terms of market share, Yeung said their future looked good. For one thing, the local companies' second-generation managers were more open to the latest design and management trends. Second, women's social status and earning capacity have dramatically improved. As a result, they started paying more attention to fashions, even for clothing only seen by their family or intimate friends.