Almost 70 percent of department store customers in Taiwan use credit cards to pay for their purchases, a survey conducted by the Ministry of Economic Affairs (MOEA) showed on Saturday.
Citing the survey, the MOEA said that department store operators tend to work with credit card issuing banks, particularly for such events as store anniversaries and Mother's Day, when special discounts are available to customers who pay with credit cards.
In addition, the ministry said consumers who makes large purchases pay with credit cards because of the convenience.
As a result, 66.1 percent of department store customers paid by credit card, followed by 26.1 percent who paid in cash and 5 percent who used store-issued vouchers, the MOEA said.
However, the survey also found that cash remains the most popular method of payment in supermarkets, convenience stores, restaurants/ beverage stores and even with tobacco vendors, accounting for more than 70 percent of payments for generally smaller purchases.
For virtual retailers, the survey showed, credit card payments accounted for 71.1 percent of total payments. The MOEA said that online retailers tend to work closely with banks to allow consumers to pay in installments, which reduces the financial burden of purchases.
According to the survey, when consumers make big-item purchases such as cars or motorcycles, the down payment is generally paid in cash, with a credit card or debit card, while the balance is paid by check or bank remittance.
In the retail business as a whole, 48.1 percent of consumers in Taiwan prefer to make purchases with cash, while 35.6 percent pay with credit cards.
Meanwhile, the MOEA said that revenue generated by the local retail business hit a record high of NT$4.02 trillion (US$128 billion) in 2015, up 0.3 percent from a year earlier despite a slowdown in the local economy.
The ministry said that due to an increase in shipments and lower operating costs, net profit rose 13.8 percent in the local retail sector in 2015 year-on-year to NT$251.6 billion, with the operating margin rising 0.7 percentage points from the previous year to 6.3 percent.
The MOEA said the local food/beverage business made a net profit of NT$59.2 billion in 2015, up 20.7 percent from a year earlier, partly due to cost cutting efforts which resulted in an operating margin of 14 percent, up 2.1 percentage points. The relatively low comparison base in the previous year also contributed to the significant increase in net profit.
However, sales in the local wholesale sector fell 3.9 percent year-on-year in 2015 to NT$9.73 trillion in the wake of weaker global demand for commodities and energy, the MOEA said.
The ministry added that the decline in sales in the wholesale sector was also caused by an increase in the sale of cheap foreign made steel products on the local market.
Source: Focus Taiwan News Channel