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Taiwan Business

Hidden champions of the island

Most of the successful companies on the island are small or medium-sized enterprises and the authorities are keen to develop them further

Hidden champions can be defined as small companies that are little known by the rest of the world but go on to be successful.

The term was coined by Hermann Simon, a German author and businessman, who first used it to describe the small, highly specialised German businesses that went on to dominate the global market. According to Simon, a hidden champion should fulfil three criteria: it should “[be] one of the top three in its market or number one in its continent, [have] a revenue of less than US$ 5 billion and not [be] well known [by the] general public”.1

There are about 2,700 extremely successful companies around the world that are referred to as “hidden champions” and roughly half of them are German.2 Unlike large, publicly listed companies, which are often the subject of news reports, hidden champions, as their name would suggest, are rarely in the public eye. Their modest reputations, however, do not equal complete anonymity, as they are usually known, admired or even feared within their own industries. But for companies with global market shares of over 50 per cent,3 hidden champions are relatively unknown.  

Hidden champion values

Most of the island’s most successful companies are small or medium-sized enterprises (SMEs). In 2017 SMEs had up to a 97.7 per cent market share based on number of enterprises, and up to 14.2 per cent based on export sales value.4 SMEs play an important role in the island’s economy. Owing to the special status of SMEs on the island, many hidden champions have flourished.

In 2017 Hermann Simon attended the Gurus Forum on the island and gave a keynote speech about the secrets of hidden champions’ growth in the world. Based on years of observation, he highlighted some company values that hidden champions usually share. These included extremely ambitious goals, a company mission combined with exceptional products and knowledge, strategies for globalisation, a strong research and development team and capable employees and leaders.

Support from the authorities

The authorities on the island recognise that it has the potential to develop SMEs into hidden champions. A number of manufacturers of bicycles, textiles, sporting goods and ceramic products have performed so well that they are close to being defined as hidden champions.

At the same time, efforts are being made to further bolster the development of SMEs by identifying role models to learn from and helping them recruit talent and raise funds.

Because of the island’s success and experience in developing SMEs, the Industrial Development Bureau published a book entitled Hidden Champions of Taiwan in January 2019 to reveal the success stories of hidden champions. According to the book, the island has many areas of industry that have cultivated hidden champions all over the world.

In 2017 SMEs had up to a 97.7% market share based on number of enterprises, and up to 14.2 based on export sales value.

Leading industries

According to the news platform Taiwan Today: “The island’s manufacturing output increased by 5.85 per cent year on year to NT$ 13.34 trillion (US$ 456.75 billion) in 2017 […]. The three leading contributors — accounting for more than 70 per cent of the total gain — were basic metals […] chemical materials […] and electronics components and parts.”5

However, several other subsectors, especially those dominated by SMEs, are manufacturing unique, internationally competitive products. These products include sporting goods, cosmetics and skincare.6

The island’s manufacturing output increased by 5.85% year on year to NT$13.34 trillion (US$456.75 billion) in 2017


Statistics from the authorities show that many of the island’s companies have introduced their own cosmetics brands overseas in recent years and have increased shipments from the island to meet growing demand.

According to news outlet Taiwan Trade, “China remained the largest overseas buyer of [the island’s] cosmetics in 2017, accounting for 56.7 per cent of total exports. The United States of America had the second-highest share… at 10.9 per cent, followed by the Association of Southeast Asian Nations at 8.9 per cent and Japan at 4.2 per cent.”7

In the same article, the Ministry of Economic Affairs attributed the success of cosmetics brands to two factors: “upgrades to their products to meet the requirements of foreign markets and more effective market strategies that have given them greater visibility overseas”.8

In 2018 the export value of beauty products from the island reached US$ 832 million, with major export countries including China, Hong Kong, Japan, the United Kingdom and the United States. Dr. Morita and MIRAE are examples of popular and successful skincare and beauty brands.


The island’s textiles industry has also spawned several strong exporters worldwide and there is no better place to showcase the success of its sportswear than at the world’s most watched sporting event: the FIFA World Cup.

At least 15 of the 32 teams competing at the 2018 World Cup, including Belgium, Brazil, England, Egypt, Germany, Japan, Sweden and Saudi Arabia, were equipped with kits made of innovative fabrics from the island, according to the island’s Industrial Development Bureau.

According to news platform Focus Taiwan, “In recent decades, the [clothing] industry has relocated most downstream production overseas and gradually also moved upstream and midstream manufacturing operations abroad, while focusing on research and development at home.”9

Upstream producer Shinkong Synthetic Fibers, midstream suppliers Fu Hsun Fiber and Men-Chuen Fibre and downstream producers Eclat Textile Company and New Wide Enterprise were also involved in manufacturing the 2018 World Cup jerseys.10

Alongside sportswear, several makers of footwear, such as Pou Chen Corp, Feng Tay Enterprises and the Ching Luh Group, which are long-term suppliers of Nike, Adidas and other major brands, manufactured studs for football players at the World Cup in 2018.

China remained the largest overseas buyer of [the island’s] cosmetics in 2017, accounting for 56.7% of total exports.

Hidden champions programme

In May 2019 the EBRD’s Local Currency and Capital Market Development team organised a knowledge-sharing workshop and invited experts from the island’s Stock Exchange (TWSE) to Skopje to share their experience in promoting its hidden champions.

The six-hour workshop gave the experts a chance to show how TWSE supports listed companies in disclosing information and in strengthening their corporate governance in order to improve investors’ confidence and attract international investment.

The workshop was a great success. Almost 40 participants from six countries attended and an enthusiastic discussion ensued.

The workshop was a great success. Almost 40 participants from six countries attended and an enthusiastic discussion ensued.