Pineapple became a critical component of Taiwan's economy during the Japanese era, during which Japanese industrialists imported a wide variety of pineapple cultivars and established numerous processing plants. By the late 1930s, Taiwan had become the third-largest exporter of pineapples in the world. However, when pineapple production in Taiwan shifted toward domestic sales and use of fresh pineapple, local bakeries sought to use this surplus in pastries. While pineapple cakes had historically been produced as a ceremonial food, a combination of governmental promotion and globalization popularized the pineapple cake. Pineapple cakes have become one of the top-selling souvenirs in Taiwan.

Since 2005, the Taipei City Government has run an annual Taipei Pineapple Cake Cultural Festival to foster the growth the local tourism industry and promote sales of the pineapple cake. In 2013, the revenue from Taiwan's pineapple cake bakeries totaled NT$40 billion (US$1.2 billion), and sales of pineapple cakes have also bolstered agricultural economies in rural parts of the country.