With the Philippines’ growing population of nearly 100 million and expanding middle class, and consumer-driven market, it presents significant opportunities for retailing of products and services. The Philippines is also one of the world’s largest English speaking markets, heightening the ease of marketing and doing business. Its Westernised culture makes the market open to imported brands and concepts.
Retail Market overview
The retail industry is driven by a large and young consumer market base and an expanding middle-class with relatively high disposable income who are receptive to Western concepts and fascinated by global brands. The volume of overseas workers’ remittances that hit a total of over USD20 billion in 2012 (up 7% from 2011) and the strong services sector (particularly in BPO) drive disposable income and spending.
Commercial space expansion has been an ongoing trend and “malling” is a favourite national pastime. The Philippines boasts three of the world’s largest malls based on floor area: SM North Edsa, SM Mall of Asia and SM Megamall. All of these are World Class Malls. The country’s retail sector is identified as one of the fastest-growing industries today.
Four major groups – SM Group, Ayala Corporation, Robinsons and Rustans, dominate the Philippine retail industry. The SM Group owns over 40 malls nation-wide, and is aggressively expanding not only their shopping malls but also their supermarket chains. Ayala Corporation continues to develop mixed-use developments, combining commercial, residential and retail space. Robinsons reports continued growth in rental revenues, showing increased uptake of retail space. Rustans, the Philippines’ largest luxury retailer, currently handles more than 70 foreign brands and are still expanding their portfolio.
Some of the UK brands now in the Philippines are Marks & Spencer, Debenhams, Burberry, Unilever, Arcadia Group (Topshop, Topman, Dorothy Perkins), Warehouse, Clarks, Paul Smith, Mothercare, Body Shop, Speedo, Hackett and Lush. Range Rover, Jaguar and Mini Cooper are also in the Philippines and have posted steady growth in sales.
In terms of key opportunities, a number of Philippine retailers are looking for foreign brands that are already operating successfully in other Asian markets (especially in ASEAN region), but are not yet in the Philippines. In the fashion sector, major retailers continue to look for additional brands to bring in, catering to the Philippines’ top and mid-market segments, as well as to tourists. The growing hotel & tourism industry also offers a lucrative market, both for related products and services.
There are only a few UK household goods, giftware, and cosmetic products in the local market and consumers are looking for more. Food and drink items as well as dining concepts would also be in demand.
Getting into the market
- Doing business in the Philippines is highly relational. Formal and personal introductions would be a preferred way to enter the market, as would partnerships with established local companies for franchise or distribution.
- Appointments are required and should be made at least two weeks in advance.
- English is the language of business in the Philippines; and pricing is a key consideration.
- Experience of doing business in the region or in markets with similar demographics.
- The Philippine government encourages inbound foreign investment, designating economic zones and offering a wide range of incentives.
The PBBC has its very own sector specialist in Manny Silverman, who is well known throughout the higher echelons of the UK retail sector. Manny has forged relationships with very senior people in the Philippines retail sector.
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local UKTI international trade team.
- Joyce Guzon Tolentino, British Embassy Manila.