Dicey cross-straits relations keeps Taiwan's market on tenterhooks.

Taiwan’s glory days as one of the four Asian Tigers has been a thing of the past as its economy stagnates and becomes more dependent on China in recent years.

Its neighbour across the straits has far surpassed it by becoming a global economic behemoth and a leader in the in tech and digital space. The scenario can be best represented by homegrown brand HTC, once the poster child of Taiwan’s tech innovation. HTC continued its downward fall from the 129 to 193 this year in the country rankings. Contrast that with Xiaomi which rose from 490 to 148, as well as Huawei which had a dramatical lift from 697 to 340 over these two years. Maggie Tang, managing director, UM Taiwan, said HTC’s downfall was more related to its product quality rather than branding issues. “But we also see Chinese brands such as Oppo increasing its ad spend. It is obvious that Chinese brands are very interested in courting the Taiwanese consumers,” said Tang.

Meanwhile, for the top ten brands, Apple overtook Sony to claim the top spot while Samsung moved up to eighth from the 11th place last year. Chanel retained its stronghold at third place, while the luxury brand had been second from 2013 to 2015. Among the luxury brands, Gucci was its closest competitor at 20, followed by Armani at 27 while Christian Dior trailed behind at 64.

To explain the enduring appeal of Chanel among Taiwanese consumers, Barbie Lin, managing director, ADK Taiwan, said the brand has concentrated its strategy on marking its OOH space at the most premium spots around Taipei such as Taipei 101, Jilin Road, Xinyi Road and Zhongxiao Road. “Chanel definitely enjoys a premium position in the eyes of the consumers but overall, it has been well-rounded in its approach. It has also yet to abandon traditional media like TV and magazines,” said Li.

However, Tang from UM Taiwan pointed out that luxury brands operating in Taiwan will inevitably suffer from the reduced number of mainland tourists due to restrictions placed by the Chinese government after the pro-indenpendence Democratic Progressive Party came to power. "What I have observed recently is that spending on OOH at tourist spots such as Taipei 101 have been considerably cut down by luxury brands," said Tang.

In the consumer electronics sector, the battle is heating up as Panasonic (4) displaced Hitachi (5) compared to their previous positions at seventh and fourth respectively in 2016. Another Japanese consumer electronics brand, Sharp, moved 25 spots to 26 this year following its acquisition by Taiwanese conglomerate Foxconn. For the new entrants, Uber was the highest place at 25 despite facing legal challenges. Likewise, Airbnb which was in similar legal conundrum moved higher to 272 compared to 374 in the previous year. Nevertheless, the tourism outlook in Taiwan is less than rosy following China’s move to cut down the number of mainland visitors to Taiwan.