Sustainable Supply Chain

In line with the goal of “Partnership Matters”, momo is implementing the Sustainable Living Blueprint. This includes collaborating with supplier partners to provide consumers with diverse, high-quality, and cost-effective products and services that are also environmentally friendly and socially responsible. Our priority is to convince society and suppliers that momo is the best supplier for “every matter” and this forms a key component in our push towards sustainability. To this end, we are firmly committed to maintaining a sound corporate structure, comprehensive information security, and a rigorous supplier selection process. In addition to requiring suppliers to provide high-quality products and after-sales service, momo also provides professional mentoring, consulting and open channels of communication on each operational aspect so as to build a complete supply chain. We will continue to maximize the value we create for shareholders, consumers, and supplier partners through exceptional business performance and long-term investment in order to become a sustainable brand.

Supplier Overview

We have three types of suppliers - “Product Sales”, “Logistics”, and “General Administration.” The bulk of our suppliers are involved with product sales through TV shopping, online shopping, mail-order catalogs, and mobile shopping. Once the consumer places an order with momo, the goods are picked up, sorted, and packaged at the supplier or momo’s warehouse then passed to the logistics vendor for swift and secure delivery into the consumer’s hands.

Logistic suppliers cover the distribution for each product type, including general goods, frozen and refrigerated goods, appliances, and large furniture, and are focused on improving delivery quality and efficiency. General administration suppliers are mainly responsible for all the civil engineering, civil construction, mechanical-electrical engineering, fire safety, air conditioning, cleaning, insurance and other repair & maintenance services essential to momo operations. They work behind the scenes to support our overall operations.

With the growth of revenue and the expansion of logistics and warehousing, the number of suppliers is on the rise. By 2022, the number of suppliers had surpassed 10,100, covering consumer electronics, daily necessities, household appliances, home furnishings, fashionable goods, beauty, health care, leisure, food and overseas own operators. The fashionable goods sector took up the largest share of 16.1%, followed by leisure books, home furnishings, food and daily necessities at more than 10%, and all types of sectors ranging from 5.4% to 16.1%, with an overall growth in the industries on average. New suppliers have joined the line-up to increase the variety and completeness of products so that momo shopping can reach more consumers.

Supplier ESG Management

As an e-commerce platform, we are committed to enhancing the sustainability philosophy of suppliers and we hope that all of the suppliers we work with can make a contribution to CSR. The “Sustainable Development Principles for Suppliers/Contractors” we issued covered the following four areas: labor and human rights, health and safety, environment, and ethical guidelines. Suppliers must agree to adhere to these principles before their products can be listed for sale and they must sign the “Ethical Business Management Statement.” In 2022, there were more than 11,000 suppliers and a 100% signing rate. An online announcement is made every year for effective management and regulation.

Regular Assessments of Current Suppliers

momo monitors the operating status of suppliers through our regular business contacts with them. If there are any concerns over product quality or violations of the law, then sales are temporarily suspended. Depending on the scope and severity of the situation, dedicated personnel may be assigned to provide counseling or assistance, or the business relationship may be terminated altogether.

A supplier health exam is conducted every month or up to every six months for suppliers with a lower level of activity, based on the scale of their business and account transaction. This is done to determine whether to continue developing future business opportunities.

momo is committed to protecting brand reputation and eliminating counterfeit goods:

• Before products can be sold, a written review is conducted in Phase One to examine information such as the supplier’s profile, sales platform, and market rating. An on-site quality management inspection is conducted in Phase Two to assess sourcing, warehouse management, operating status and other items.
• For cosmetics and health food products, manufacturer certification must be examined first to decide whether a manufacturer audit is required. The audit process includes checking the environment, production process, as well as the quality controls for raw materials and products.
• Domestic food and cosmetics factories must hold either a GMP, TQF, cGMP, ISO 22716, HAACP, ISO 22000 or ISO 9001 certification to ensure that their products comply with government regulations and satisfy momo’s management requirements during manufacturing. An on-site inspection must be conducted for non-compliant factories to verify the documentation for production processes from stock-in to end product, production and inspection equipment, environmental hygiene and waste management, and protective measures for production personnel. This is to ensure full compliance with regulations governing food and cosmetics factories. Audits must be conducted every three years or when their certification has expired.

momo enforces strict safeguards on product quality and safety. Products may only be sold once we confirm that the factory is compliant or satisfies the relevant government regulations. As of 2022, 558 suppliers have completed the certification or factory audit process, and 3 out of 51 suppliers audited in 2022 haven’t passed.

momo considers suppliers to be key partners in corporate sustainability and shares the experience gained in this field with them. We also assist and mentor suppliers on strengthening their risk management in order to build a more robust supply chain. We leverage our advanced digital technology to provide consumers with a highly-accessible platform and multi-dimensional sales information so that suppliers can become more closely integrated and grow together with us.

momo invites suppliers to collaborate on innovative operations, leveraging the resources of tripartite logistics and warehousing to run the “node removal” initiative. In line with the demand for goods from momo's northern, central and southern warehouses, goods will be carried to the nearest momo warehouse after arriving at ports in Taiwan, shortening the distance of delivery and the nodes of warehousing to the supplier or momo warehouse, reducing the carbon footprint of vehicle transportation, which not only lowers logistics costs and increases intangible storage space, but also boosts teamwork between the three parties. Meanwhile, we pioneered the use of circular boxes for suppliers’ incoming shipments to reduce packaging consumables and subsequent disposal of consumables.

Supplier Education and Training

Supplier education and training is conducted online or offline. Online education and training consist of video tutorials on systems operation, lecture notes on operational processes, and FAQs. Offline education and training include assigning vendor service representatives to each supplier for providing one-to-one consulting and troubleshooting. We also regularly conduct group classes and computer demonstrations with professional instructors in northern, central and southern Taiwan and host workshops on SCM operation, after-sales service, marketing promotions, accounts and legal affairs.

In 2022, we uploaded 25 videos on training courses via SCM Academy, with 6 new videos, for an aggregate of 48,575 views, up 8.5% from a year earlier. We integrated various online learning resources and design different learning topics in phases according to the supply chain of different industries, ranging from product presentation, regulations, advertising and marketing, sales analysis, stocking and warehousing, transportation and distribution, customer service, etc. throughout the operations. We also regularly add and update contents based on frequently asked questions from suppliers to suit their online learning needs, so that they can learn more quickly and efficiently and improve their operational management and technological capabilities at the same time. In addition to training for external suppliers, because every employee is part of the service provider, momo has also set up 24 training sessions for internal business units on contracting and warehousing, as well as 9 training sessions for frontline service personnel to implement professional supplier service management.

Supply Chain Information Security Management

momo is certified with ISO 27001 and ISO 27701 standards for information security management systems, and regularly disseminates information security-related information and protection policies to raise the awareness of existing suppliers about information security. In 2022, we arranged telephone interviews with 12 suppliers who needed to bolster their information security protection. We also launched a self-evaluation mechanism for suppliers' personal data protection, and provided recommendations on protection mechanisms based on the six major topics covered by the "Information Security Management Regulations", including "personal data regulation", "external operating platform", "order processing process", "personal data security during distribution", "internal computer security", and "personnel and physical security”. From 2021 onwards, all new suppliers have been introduced to the personal data protection self-evaluation mechanism, and suppliers are required to complete an online self-evaluation before they can work with momo. By the end of 2022, over 3,200 suppliers had completed the “Supplier Personal Data Protection Self-Evaluation” questionnaire. In addition, momo also stepped up checks and management of information security on the supplier side to enforce immediate risk control. If there is a security breach concern, momo will immediately inspect the relevant vendors, activate the vendor backend system suspension mechanism, and arrange on-site visits to or telephone interviews with suppliers in question to strictly investigate them with security concerns, and set out the extent of the security breach and the conditions for reinstatement. Moreover, in terms of preventive information security risk control, we have also strengthened password and data protection operations for suppliers' backend systems to enhance data security and reduce the risk of data leakage from backend systems.

In collaboration with Taiwan Mobile Group, momo has introduced the first secure communication platform in Taiwan's e-commerce industry, turning personal phone numbers on home delivery orders into codes that can be used by logistics staff to make phone calls, allowing home delivery orders to be completed smoothly without displaying personal information. By the end of 2022, momo had more than 9,100 cooperating vendors, and had guided over 90% of commodity suppliers and logistics distributors to introduce the momo secure communication platform system to significantly reduce the risk of personal data leakage during distribution.

Supplier Chain Management System

The Supply Chain Management (SCM) digital platform serves as the medium for online communication between momo and suppliers. It pushes out material on information security, government directives, regulatory changes, and CSR best practice principles to suppliers on a regular basis. “Online Consent Forms” outlining changes to collaboration guidelines are issued on an ad hoc basis to suppliers to sign online. The SCM platform provides content such as online and offline supplier conference courses, SCM video tutorials, and handbooks. At the end of 2022, multimedia teaching materials for SCM Classroom were viewed more than 48,000 times. A total of 79 learning handbooks, 25 learning videos and 148 FAQs were uploaded as well. Consolidation of the SCM Classroom increased the use of multimedia teaching by 8.5% year-on-year. We are consolidating our online one-stop service to support our partnership model with business clients, distributors and suppliers. We plan to integrate the supplier service area with B2B recruitment in the future. An online contract review mechanism will be launched through the service area to create an online real-time digital supply chain service platform.