Past Issues

More than Just a Station

• Byline:KELLY HER
• Publication Date:02/01/2010

The Breeze Taipei Station, a food court located on the second floor of Taipei Railway Station, features a lively atmosphere and diverse eating and drinking options. (Photo by Chang Su-ching)

Innovative management and design have transformed a rundown, seldom visited sales outlet at Taipei Railway Station into a popular gourmet haven.

Train stations are places of transit; people come and go and oftentimes they do so with feelings of sadness at saying goodbye to loved ones. But are there ways to make a station a cheerful place and encourage passengers to stay longer, for instance, by enticing them to enjoy fine dining, a cup of hot, fragrant coffee and a good chat with friends? Jason Tsai, special assistant to the chairman of the Breeze Group, and his colleagues contemplated this question when an opportunity arose for the group to manage 2,800 pings (about 9,254 square meters) of space on the second floor of Taipei Railway Station.

“We made fact-finding tours to Japan, the United States and Europe to observe the transformation of various train stations in their major cities, and we became convinced that a train station can actually play multiple roles instead of being just a place of transit,” Tsai says. “Plus, Taipei Railway Station is the central station in Taipei, Taiwan’s capital city, so it represents the nation’s image to a certain extent. We decided something should be done to improve the station’s facilities and overall environment.”

From a business perspective, the site had great potential, too, given that Taipei Railway Station is where different types of public transport including the Taipei Mass Rapid Transit (MRT) system, Taiwan High Speed Rail and local and intercity buses converge, Tsai continues. Moreover, it is situated in a busy commercial district with many office buildings, retail shops and cram schools. As such, in addition to commuters, office workers, shoppers and students are all target customer groups.

Based on these considerations, the Breeze Group joined bidding for the rehabilitate-operate-transfer project offered by the Taiwan Railways Administration (TRA) in 2006 for the second floor of Taipei Railway Station and succeeded in winning the bid. “The second floor of the railway station had been quite desolate for a number of years and people had little, if not a bad, impression of it. Plus, the area was up on the second rather than the ground floor. Luring customers upstairs could pose a challenge,” Tsai says.

Business Potential

A corporate tenant had run the space with the idea of forming a department store for the previous 10-odd years. The area had become somewhat shabby and rundown, however, with few people visiting. As a result of poor business, the company eventually closed its doors, defaulting on rent to the TRA. “Still, we believed these negative factors could be overcome and the area’s overall significance and business potential outweighed its disadvantages,” Tsai says.

The Breeze Group also operates the Breeze Center, Taipei’s first indoor Western-style shopping mall, which opened in 2001 and combines shopping with dining and recreation facilities. After taking over the management of the second floor, the group spent about 10 months and NT$500 million (US$15.1 million) on extensive renovations at the Taipei Railway Station site.

The food hall offers a wide range of cuisines from around the world to cater to the tastes of different customers. (Photo by Chang Su-ching)

In its exploration of what kind of business to open, Breeze conducted comprehensive surveys on the types of shops and consumers in the vicinity of the railway station. Given that the area already has a large department store and many retail shops that sell various daily necessities and electronics products, as well as fast food stores and eateries that primarily offer takeout food, the group decided to focus on a single business type—dining—but with a variety of cuisines in order to create a fun atmosphere and diverse mealtime options. Finally, in October 2007, Breeze Taipei Station launched operations.

The second floor now includes a food hall that is divided into four themed areas offering beef noodles; Taiwanese night market delicacies; various kinds of curries from Japan, India and the Middle East; and “exotic foods” from Singapore, Vietnam, South Korea and Italy. The remainder of the space houses a number of bakeries, restaurants and cafés with their own seating areas. Currently, there are a total of 58 vendors.

In the beef noodle section alone, there are eight highly regarded beef noodle vendors standing side by side. Different variations include roasted or braised beef, and noodles stewed in clear broth or flavored with barbecue sauce, tomato, scallions or hot sauce.

Moreover, several well-known chain stores like Starbucks, Mister Donut, Movenpick (Swiss ice cream), Genki Sushi and Kofukudo (Japanese confections), Shanghai Dumpling, Ten Ren’s Tea (Taiwanese tea drinks) and Minder Vegetarian (Taiwanese vegetarian buffet) have all set up shop at Breeze Taipei Station.

Tsai says his company has put an emphasis on interior design and décor as well as solicitation of prominent brands to create a fashionable image and, more importantly, offer a wide range of quality food that appeals to customers. To ensure that retailers are meeting the center’s goal of offering popular meal choices prepared under hygienic conditions, Breeze reviews the performance of vendors regularly and eliminates those that fail to meet its standards of cleanliness, service or sales. With the patronage of 20,000–30,000 customers on a daily basis, Breeze Taipei Station raked in NT$900 million (US$27.3 million) in sales in 2008.

Among the businesses operating in the food court, Gong-Fu Hand-Pulled Noodles of Lanzhou stands out with its specialty of steamed oxtail noodle soup, which was the champion of the 2008 Taipei International New Row Mian Festival organized by Taipei City Government to promote the local beef noodle industry. Jeff Liu, special assistant to the chairman of the Gong-Fu noodle shop, says business has fared better than expected, with monthly sales currently reaching NT$2.5 million (US$75,800), compared with the original forecast of NT$1.8 million (US$54,500).

Gong-Fu Hand-Pulled Noodles of Lanzhou offers custom orders for the kind of noodle and different combinations of meat and broth. (Photo by Chang Su-ching)

The biggest advantage of setting up a shop at the railway station, Liu says, is the stable customer base—passengers. That makes it easier for the store to estimate the amount of food it should prepare daily and thereby offer fresh cuisine.

Given that customers might not have much time for dining, Liu says Gong-Fu has developed one kind of noodle that can be boiled in 15 seconds so that the dish is ready within three minutes of receiving an order. What is more, the kitchen is visible through a glass window, allowing customers to watch the whole procedure as chefs prepare the dish. That, Liu adds, is designed to assure customers of Gong-Fu’s food handling standards. He says the shop also offers custom orders based on individual preferences such as thick, thin, chewy or soft noodles and different combinations of meat and broth at an affordable price of NT$90–$170 (US$2.70–$5.10).

Kuo Jun-liang, manager of I Jy Sheng, a Taiwanese bakery chain, says initially his company was worried about setting up a branch at the station, as the site formerly appeared to be a failure in attracting customers. Nevertheless, having trust in Breeze’s management capabilities and philosophy, I Jy Sheng made substantial investments in décor in tandem with Breeze’s overall design layout.

At the same time, the company paid attention to planning for the new shop, taking into account that the railway station sees a lot of tourists. In the last two years, I Jy Sheng has begun an aggressive campaign to develop more than 10 kinds of sweet pastries packaged for tourists to give as gifts such as handmade mochi (made from ground rice), pineapple cakes, green bean pastries and longan cakes.

“Thanks to its good location [inside the train station], together with our development of tasty Taiwanese-style confections, our store has attracted many tourists from Taiwan and abroad. Plus, Breeze has done a good job in creating a nice environment and atmosphere that entices people to walk around and shop after they finish their meals,” Kuo says. The manager says that I Jy Sheng is satisfied with its current sales performance, adding that revenue was expected to have grown by 30 percent by the end of 2009 versus 2008.

Similarly, Chang Qiu-ren, chairman of Sho-Na-Men Dessert World, says he admires Breeze’s management and marketing techniques. He says one of his company’s 13 chain stores is located in the food court of the Breeze Center and it has been doing well, so he was keen to accept Breeze’s invitation to open another one at Taipei Railway Station. Business at the Breeze Taipei Station branch has been good for Sho-Na-Men, with sales amounting to NT$33 million (US$1 million) in 2008 and projected to have hit NT$35 million (US$1.1 million) in the final tallies for 2009.

Sho-Na-Men Dessert World offers more than 60 items including fried dumplings, braised pork and rice, and tofu pudding to appeal to domestic and international customers. (Photo by Chang Su-ching)

Like Jeff Liu from Gong-Fu Hand-Pulled Noodles of Lanzhou, Chang says being located inside the railway station ensures a steady flow of customers. In considering the needs of the eatery’s main customer groups, train passengers and office workers, he has modified the menu to maximize efficiency, but still maintains variety with more than 60 items including steamed or fried dumplings, braised pork and rice, millet congee, beef or pork puff pastries, tofu pudding and green onion savory pastries.

Frank Fan, director-general of the TRA, says the key factors in Breeze winning the bid to manage the second floor of the station were the group’s good track record of operating the Breeze Center shopping mall and the well-rounded investment plans that it proposed.

Fan says he is glad to see that Breeze followed the Japanese model of railway station management by integrating other shops and services at the site, and used modern design and facilities to covert a dull, stagnant place into an aesthetically pleasing, lively food hall. Plus, based on his understanding, Breeze made a thorough market survey and analysis of its target consumer groups before formulating its business plan. That is why it has succeeded in luring not only the commuters and tourists that use the station, but also people that study or work in the neighborhood to enjoy tasty, inexpensive dishes.

As well, the successful operation of Breeze Taipei Station benefits the TRA a great deal financially. Besides receiving a franchise fee of NT$60 million (US$1.8 million) for the 12-year-long investment contract and annual operational payments of NT$50 million (US$1.5 million) from the group, TRA is entitled to 2 percent of any sales above NT$500 million (US$15.1 million) annually.

“Apart from contributing to our revenue, the well-managed Breeze Taipei Station has helped boost the overall image of Taipei Railway Station, which has a long history, and gives it a fresh, new look, and that’s the most significant impact,” Fan says. “Plus, the management efficiency of the Breeze Group has been an inspiration to us, a state-run enterprise, and has propelled us to reengineer our operations.”

Fan continues that, as a major transport hub for traditional and high-speed rail, the MRT system and city and intercity buses, Taipei Railway Station sees around 400,000 passengers daily. Looking forward, the planned launch of the Taiwan Taoyuan International Airport Access MRT System by 2014 will create an even larger cluster effect and consequently greater business needs and opportunities, while raising the status of Taipei’s main station as it will be the first point of entry to the capital city for most international tourists.

I Jy Sheng has developed more than 10 kinds of delicacies packaged for tourists to give as gifts such as handmade mochi, pineapple cakes and longan cakes. (Photo by Chang Su-ching)

In addition, Breeze has also obtained the right to manage the ground and the first basement floors of Taipei Railway Station starting from this year. The group plans to team up with other enterprises to include a bank, a bookstore, a convenience store, a coffee shop, a bakery and a supermarket, together with several stores that sell daily necessities, souvenirs, food and local specialty goods to cater to various needs of passengers and ordinary consumers.

Big Plans

Fan adds it is an international trend for train stations to diversify their operations. While the core business of Japan Railways Group, for example, is transportation, this makes up only 41 percent of its overall revenue, with other businesses it is engaged in accounting for the remaining 59 percent. As for the TRA, transportation still occupies the lion’s share of its overall revenue, or some 82 percent of the total. There is thus much room for the administration to venture into other service- and travel-related businesses.

Accordingly, to make the best utilization of its assets, the TRA intends to relocate all the ticket offices, presently situated in the middle of the railway station’s concourse, to its western side to make room for holding different events like exhibitions, concerts and arts and cultural performances. It also plans to consolidate its own offices, which currently occupy the third to the sixth floors of the seven-floor station building, to make more space available for commercial use such as a conference venue, hotel, gym, theater or apartments for rent.

“Our new ideal is to revitalize the whole train station via multiple uses, enabling it to play an important part in people’s everyday life,” Fan says. “Our partnership with Breeze has yielded very good results. We also intend to copy such a business model at other train stations like Banqiao, Nangang and Songshan to bring in private sector investment and creativity to make the railway station a welcoming urban space while better serving members of the general public.”

Write to Kelly Her at kelly@mail.gio.gov.tw