A Sincere Partner in Governance
ESG
Business Performance and Risk Management
Business Performance
In 2023, PChome focused on fundamentally adjusting its operating structure, reshaping its brand image, optimizing the shopping experience, improving operational efficiency, and opening the PChome Linkou A7 Intelligent Logistics Park, becoming the first e-commerce company in Taiwan to introduce AI technology and fully automated warehousing equipment at the highest density to improve shipping efficiency. Adhering to the core concept of “customers first, becoming a part of daily life”, we are committed to letting consumers feel a “perceivable change” in PChome. After epidemic prevention measures were lifted in the first half of 2023, consumers returned to normal consumption in physical channels and increased spending on leisure and travel activities. In addition, the demand for consumer
electronics products such as 3C home appliances were saturated after the pandemic, which affected the growth momentum of the overall e-commerce industry and caused PChome’s revenue to show a relatively steep decline in the first half of the year. Overall consumer demand gradually recovered in the second half of the year. As new models and products of major 3C home appliance brands were launched one after another, it slightly increased sales during the traditional peak season. In addition, the demand for travel-related products, such as e-tickets, outdoor travel, and beauty products grew significantly, and gradually made up for the decline in revenue, which is expected to get back on track to grow in 2024. Aside from our e-commerce business, PChome is also actively integrating resources
of subsidiaries to utilize the group’s synergies. The FinTech business, trading market department, and cross-border e-commerce services in Japan all continue to stably contribute to the group’s profits. PChome’s consolidated revenue was NT$41.286 billion, and consolidated net loss after tax was NT$0.528 billion in 2023. Details on the financial data can be found in our Annual Report (please see the Investor section of PChome’s official website for details).
Tax Governance
Tax Commitment Policy（GRI207-1）
PChome upholds the principles of transparency and responsibility in tax governance and creates a tax governance culture in line with local tax regulations as well as global anti-tax avoidance efforts. We implement regular transaction principles, refrain from aggressive tax planning, and disclose tax information to stakeholders in financial reports in an effort to enhance overall information transparency.
Tax Governance（GRI207-2, GRI207-3）
The Company has a tax management unit. Routine tax administration and management are carried out by the accounting supervisor. Professional and experienced tax specialists assist the accounting supervisor in fulfilling the Company’s tax obligations. The CFO is the person with the ultimate responsibility for tax management. At the end of each year, the Company submits the country-bycountry report for the previous year in accordance with regulations, and at the same time makes a sub-filing of the country-by-country report in Hong Kong for use by tax collection authorities in countries other than Taiwan.
Country-by-Country Report（GRI207-4）
PChome submits required business information in its audited consolidated financial statements to the Country-by-Country Report System according to the agreement signed between the R.O.C. government and OECD. The information is only preserved by the tax authorities.
Robust Operational Risk Management
The Company has analyzed and responded to high probability and high impact risk events related to business goals, the accuracy of financial reporting, and fraud prevention, in order to strengthen corporate governance and establish sound risk management. While maintaining normal business development and maximizing shareholders’ interests, the Company also set up a Customer Service Department and regularly reviews customer opinions to pay attention to consumer rights. At the same time, in order to protect the rights and interests of consumers, the Company obtained “HiTRUST certification as a Global Trust website,” “Excellent Electronic Store,” and “Network Consumer Association Shopping Compensation” to make consumers feel more at ease when shopping.
Internal Audits（GRI 2-24）
The Audit Office is responsible for PChome’s internal audits, and is an independent unit subordinate to the board of directors. It carries out supervision and review and identifies the risk of potential deficiencies, recommends improvements, and communicates with management based on inspection results, in order to ensure the effective operation of the internal control system. The internal audit supervisor effectively fulfills the functions of the Audit Committee and must regularly report the implementation status of audits to the Audit Committee and Board of Directors based on the annual audit plan.
(1) General audits: To understand and report the actual status of all business tasks in the audited department. The auditee is subjected to at least one general audit per year
(2) Special audits and investigations: To understand and report the status of the audited department in handling a particular business task or general task. A special investigation is conducted immediately when necessary
(3) Follow-up audits: To supervise the audited department in redressing the drawbacks highlighted in the two previous audits. Followup audits are conducted from time to time
With regard to the implementation of internal audits in 2023, 56 internal audit plans were submitted to the board of directors and approved. Audit results are periodically reported to the board of directors and management, and improvements to deficiencies and abnormalities in the internal control system are reported to the competent authority in accordance with regulations.
Internal Audit Process
Legal Compliance（GRI 2-27, GRI 418-1, GRI 416-2, GRI 417-2, GRI 417-3）
The Legal Office handles all affairs pertaining to PChome’s legal compliance mechanisms and legal risk management. It also assists the senior management and other business departments in understanding statutory revisions and regulatory assessments while organizing and formulating relevant legal training to enhance legal compliance within the organization and execute ethical and transparent corporate governance measures. PChome added announcements and graphics to the back-end to ensure that vendors comply with regulations. The BSMI label is also directly adjusted through the system. PChome immediately takes necessary improvement measures when it is notified of any violations. If it is related to suppliers, we immediately forward the notice and recall products or make corrections to contents that were found in violation.
The following is an overview of the aforementioned social and economic violations in 2023:
| Type of Violation | Number of Cases | Type of Penalty | Subsequent Corrective Actions |
| Violation of regulations regarding the health and safety of products and services | 53 | All warnings | Remove products |
| Violations of regulations regarding the information labeling of products and services | 18 | All warnings | Remove products |
| Violations of regulations regarding marketing communication 38 | 38 | 30 warnings 8 fines (All amounts are less than NT$100,000) | Remove products |
| Violation of the Labor Standards Act | 0 | No | No |
| Violation of the Occupational Safety and Health Act | 1 | Administrative penalty ( NT$30,000) | Supplement information |
| Violation of the Personal Data Protection Act | 0 | No | No |
*A major violation of labor laws is an incident that resulted in a fine of over NT$1 million.
In Service Training Programs on Legal Affairs（GRI 2-24, GRI 205-2）
To improve our employees’ general knowledge about law and implement ethical and transparent governance mechanisms, PChome irregularly organizes internal lectures and courses on knowledge and practice in various fields of law. By doing so, we ensure that our services and overall operations are deemed reliable by the market and meet industry standards. New employees of the E-Commerce Business Department are all required to take legal training courses, which cover the Copyright Act, Trademark Act, and Fair Trade Act. Fines that the Company received are immediately communicated to remind employees of the regulations involved.
There were 8 two-hour courses held in 2023 for new employees of the Company’s E-Commerce Department, and covered the Copyright Act, the Trademark Act, and the Commodity Labeling Act. The employees took a test and participated in review after the courses, which give employees basic legal concepts when performing routine tasks, preventing infringement on the rights and interests of others and lowering the Company’s operational risks.
Intellectual Property Management
PChome has been deeply involved in the e-commerce industry for a long time, providing excellent e-commerce, FinTech, and warehousing and logistics services. PChome officially introduced the Taiwan Intellectual Property Management System (TIPS) in 2020 and received the Level A certificate from the Industrial Development Bureau in the Ministry of Economic Affairs on January 24, 2022., PChome passed the certification at the end of the year and received a TIPS Level A certificate, also once again passed the inspection at the end of 2023. This reflects the high level of importance we attach great importance to intellectual property management and corporate governance. PChome strengthens its business performance and risk management through big data, and combines AI and automated warehousing with an incentives policy for patents, in order to link intellectual property goals to its business strategies..
Intellectual Property Management and Protection Measures
PChome continues to strengthen its market position and consolidate hard-won emerging R&D achievements through the Company’s business goals and an intellectual property strategy that combines R&D resources, and builds a set of intellectual property rights utilization mechanisms that build company value to maintain company operations and management, protect intellectual property, and control operational risks. It can also enhance the Company’s competitiveness, help enterprises create profits, and achieve business strategies.
Intellectual Property Risks and Responsive Measures
PChome uses the following strategies to strengthen its intellectual property management system, increase employees’ intellectual property knowledge, improve confidential information management, and build positive and innovative business goals and culture:
☆ Reinforcing employees’ intellectual property knowledge and confidentiality awareness
☆ Revising confidentiality management measures based on recommendations of intellectual property audit
☆ Continuing to evaluate the possibility of filing patent applications for technologies that are used in services
☆ Organizing training on the intellectual property and information security
☆ Procuring software and equipment to improve information security capabilities
Intellectual Property Management Outcomes
PChome is focusing on service innovation and continues to increase its intellectual property capabilities and output. PChome obtained 2 invention patents, 6 utility model patents, and 2 trademarks in 2023. As of the end of 2023, PChome has obtained a total of 15 patents, including 8 invention patents, 7 utility model patents , and 550 trademarks. Main efforts in recent years include:
In-service Training Programs on Intellectual Property and Patents
