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Chia-Ling Chang (Associate Researcher, Research Division VI, TIER)
Crowdfunding: A Major Hit in Taiwan in 2018 - More than 500 Successful Projects and Nearly NT$600 Million Raised
Rewards-based crowdfunding first began in Taiwan in 2012. ZecZec and flyingV, currently the two largest crowdfunding platforms in Taiwan, both begun in 2012. WeBackers and DIT Startup joined the crowdfunding race in 2014 and 2015 respectively, both neither could change ZecZec and flyingV's dominance. In addition, due to impacts from the XPEC Entertainment incident, DIT Startup ended its rewards-based crowdfunding business in 2017. If ZecZec, flyingV and WeBackers were used as the basis to measure Taiwan's crowdfunding market, it can be see that crowdfunding experienced an enormous growth in Taiwan between 2012 to 2015. The number of Taiwan-based crowdfunding projects exceeded 700 projects in 2015 for the first time, while the number of projects slightly dropped by around 50 proposals in 2016 and 2017. Nevertheless, ZecZec and flyingV both performed remarkably well in 2018, with the number of crowdfunding projects exceeding 900 throughout Taiwan in 2018.
Note: 1. Annual statistical data uses project deadline as the basis for cut-off.
2. Crowdfunding platforms include ZecZec, flyingV and WeBackers.
Source: FINDIT (2018) and data compiled from Taiwan Institute of Economic Research (TIER).
Image 1. Number of Projects on Taiwanese Crowdfunding Platforms from 2012-2018
In terms of successfully funded projects, there have been 2,016 successful projects in Taiwan since 2012. Except for a slight decline to 341 proposals in 2016, the number of successful projects grew throughout the years, with the number of successfully funded projects breaking historical records in 2018 at 535 projects, showing a 35.8% annual growth. Cumulative successfully crowdfunding volume has exceeded NT$1.7 billion since 2018, with the successful funds from 2018 accounting for over 1/3. Total funds from 2018 reached NT$592.8 billion, representing 100.5% growth over that of 2017.
Note: 1. Annual statistical data uses project deadline as the basis for cut-off.
2. Crowdfunding platforms include ZecZec, flyingV and WeBackers.
Source: FINDIT (2018) and data compiled from Taiwan Institute of Economic Research (TIER).
Image 2. Number of Project Proposals on Taiwanese Crowdfunding Platforms from 2012-2018
Understanding the Seven Major Product Trends on Crowdfunding in Taiwan from NT$1 Million Projects in 2018
A total of 128 projects received over NT$1 million in funding from crowdfunding websites in 2018. This paper will attempt to observe and classify the development trends of popular crowdfunding projects in 2018 based on projects that received over NT$1 million:
1. Increasingly severe air pollution problem has prompted million-dollar large-scale projects to collectively create over NT$1 billion-worth of business opportunities in crowdfunding platforms
In recent years, the public is increasingly aware of the dangers of air pollution hazards, promoting positive sales performance from various air purifier products on crowdfunding platforms. In 2018, million-dollar air purifier and related projects have obtained over NT$120 million from crowdfunding, making them the best-performing crowdfunding projects in that year. Nevertheless, air purifier projects listed on flyingV and ZecZec were slightly different, with those marketed on flyingV emphasizing high-performance and low resource consumption, while the ones marketed on ZecZec tended to focus more on design.
The air purifier that received the most funds in Taiwan in 2018 was the 'POIEMA' from Singapore, which advertised for being consumable-free and high-performance. Moreover, since the group buying price was less than NT$10,000 per air purifier, the project has raised a miraculous, record-breaking NT$69.18 million in funds from 3,337 backers on flyingV.
Source: flyingV.
Image 3. POIEMA Air Purifier, which raised over NT$10 million
2. Bags and Clothing Remain Popular on Crowdfunding Even After 3 Years
Many young people create and realize their creativity on crowdfunding websites. It is easy to source for funds and target customers for designer type products such as backpacks, clothing and accessories on crowdfunding platforms, and in particular, bags have become very popular on Taiwan-based crowdfunding platforms for the past three years. SuperDouble is a team of two females whose ideas were inspired from child care. Realizing how difficult it is to find anything in traditional baby bags, the team created a new line of bags that are much more user-friendly. These bags received NT$15.1 million from 3,000 backers on ZecZec in 2018.
Source: ZecZec
Image 4. Fashionable Baby Bags - Super Double Backpack
Some crowdfunding projects that received over NT$1 million in funds were products that effectively leveraged strengths from the traditional textile industry. The SUSTAIN heat-insulation jackets in 2018 was the most successful of these projects. Its active heat insulation, windproof and rainproof functions can adapt to different environments to flexibly counter various unpredictable weather conditions. This project has received over NT$12 million from over 1,000 backers on ZecZec.
3. Smart Home Appliances Fairly Popular on Crowdfunding Market
Integrating technology and creativity, smart home appliances are often the most attractive products at first glance on crowdfunding platforms. In 2018, the best performing smart home appliances were robot vacuum cleaners, baby monitors, and smart coffee makers. The most popular of which was the 'Xiaowa' robot vacuum cleaner on ZecZec, which raised over NT$36 million from 3,875 backers within one month.
Source: ZecZec
Image 5. Xiaowa Robot Vacuum Cleaner
4. Environmental Awareness Leads to Popularity of Relevant Products
With the increased awareness for environmental protection in Taiwan in recent years, 9 eco-friendly product projects have collectively raised over NT$74 million in 2018. Four projects have received over NT$10 million in funds each. In particular, the Hiding cup yielded the best results. Having observed the popularity of tea shops in Taiwan, the Hiding cup team has designed a double-layered stainless steel cup that keeps drinks cool for 12 hours and insulates for 8 hours, on top of the first easy-to-clean Tritan straw throughout Asia. The team has raised NT$23.54 million from 19,593 backers in 2018.
Source: ZecZec
Image 6. Hiding cup with Tritan straw
5. Audiovisual Media Products to Stress Relief and Satisfy Entertainment Needs
With the popularity of cell phones in recent year, various innovative products have surfaced, while many Bluetooth earphones and speakers have also been launched. In 2018, media entertainment products have collectively raised over NT$70 million, while 13 of which have received over NT$1 million. The unique, patented surround sound algorithm technology proposed by XROUND Audio on flyingV allowed consumers to enjoy VR-grade 3D surround sound whether watching movies, listening to music, or gaming at home. This project received NT$16 million from over 4,500 backers, breaking the historical record for the highest funds for audio type products in Taiwan.
Source: flyingV.
Image 7. VR-grade 3D Surround Sound from XPUMP Premium
6. The Need for Good Sleeping Quality Led to Sales of Related Products
With insomnia plaguing many Taiwanese citizens, various crowdfunding teams have seized people's needs for a good night's sleep in their stress-filled daily lives. This targeted marketing strategy for bedding products have seen a significant growth in popularity of bedding and furniture products in 2018. A total of 9 bedding and furniture projects have each raised over NT$1 million, and collectively obtained over NT$46 million. The best performing was 'Sleepy Tofu,' a handmade mattress in Taiwan, whose slogan was 'The mattress you wouldn't want to get up the moment you lie down.' It was the first mattress-type crowdfunding project that performed exceptionally well in Taiwan, and has received an astonishing NT$19.34 million from 1,098 backers on ZecZec.
Source: ZecZec
Image 8. Sleepy Tofu Acquired Nearly NT$20 million
7. Taiwanese Games are Educational and Informative
There were 9 game-related crowdfunding projects in Taiwan that sourced over NT$1 million each on platforms including ZecZec and flyingV in 2018. Collectively, these projects received over NT$20 million. The 'Pieces of the Galaxy' launched by Hello Fish Creative in 2018 was an acrylic planet-themed puzzle that helped users to learn about planets while putting the pieces together. A hidden image will also be revealed after the puzzle is finished. In addition, users can link the puzzles together with a cog to create a miniature solar system. This project sourced NT$12.63 million from 1,678 backers in 2018. It is the only educational game project to have obtained over NT$10 million.
Source: ZecZec
Image 9. Jigsaw Puzzle that Acquired Over NT$10 million in 2018.
Outlook for 2019
This paper shows that in spite of the slight decline in the number of crowdfunding projects in 2016 and 2017, in terms of the amount of funds raised, crowdfunding continues to grow in each year. This is particularly true for 2018, which showed significant growth both in terms of the number of projects and the amount of funds obtained. The two major crowdfunding websites in Taiwan, ZecZec and flyingV, have been fairly active in their strategic planning in 2018. ZecZec was commissioned by the public sector to assist regionally-based creators to start crowdfunding campaigns, and a 'Regional Creation' section was also started on its website. On the other hand, flyingV coordinated with Agile Media Network (AMN), a Japanese listed company, to announce a new project in Taiwan, in which a crowdfunding contest will be held and the winner of which will have opportunities to enter the Japanese market. The winning project will either be sold on a Japanese partner's retail channel or online platform as the first step of penetrating Japanese market. In terms of popular crowdfunding projects, air purifier products, media, gaming, environmental protection, and backpacks remain on trend. A noteworthy point is that crowdfunding has opened up new, emerging retail channels for sleep and smart home appliances markets, which have both achieved remarkable results in 2018. To crowdfunding in Taiwan, 2018 marked a new milestone, and new, exciting changes can be expected for crowdfunding in Taiwan in the year ahead.
References
1. 'FINDIT Early-stage Funds Observations Monthly Report from February to November,' FINDIT, https://findit.org.tw/indexV2.aspx.
2. 'Taiwanese Crowdfunding Product to Enter Japanese Market! flyingV Collaborates with Japan-based AMN in Crowdfunding Contest,' INSIDE, http://t.cn/EtIGn1o, 2019/1/10.
3. 'Give me a reason not to move to the north: ZecZec x Crowdfunding to Launch 'Regional Creation' Project,' Crowd Watch, https://goo.gl/uzaBRS, 2018/10/27.
4. 'Solution to Your Insomnia! Biomedical Industry Creates Blue Ocean by Using Technology to Achieve A Good Night's Sleep,' MEET Bnext, https://meet.bnext.com.tw/articles/view/42436, 2018/3/5.