IN a decade or so, Metro Manila will no longer be the only megacity in the Philippines, according to a report released by market research group Nielsen.
In the report, titled “The Age of Asean Cities: From Migrant Consumers to Megacities,” Nielsen said Cebu City in Southern Philippines will be the next consumer hot spot in the country.
Nielsen added that cities like Johor Bahru and Kota Kinabalu in Malaysia are also examples of regional cities with burgeoning potential.
“New consumption hot spots are emerging across Southeast Asia, such as clusters of industrial estates where manufacturers are leveraging cheaper land and labor,” Nielsen Southeast Asia, North Asia and Pacific Regional Director, Client Services Regan Leggett said.
“This, in turn, is having a knock-on effect of attracting migrants and stimulating local economies,” Leggett added.
In order for investors and other businesses to take advantage of this, Leggett said investors must start planning to expand their operations or locate their businesses in areas outside of Metro Manila.
Leggett said brands must focus on product innovations which cater to the challenges, lifestyles and requirements of rural and small city consumers.
He added that they must also consider using e-commerce, distribution hubs and partnering with third parties to reach consumers in these regions. Leggett said efforts must also be exerted to adjust operations to address issues like time and space constraints, pollution health and congestion common in high-density environments.
Nielsen data showed that close to two-thirds of the region’s urban population, or 62.6 percent, forecast to reside in Asean cities and urban centers of under 500,000 by 2025.
“While many consumers will continue to gravitate to mega and super cities [32-percent growth in the next 10 years], the biggest population growth will occur in cities with populations between 1 million and 5 million,” Nielsen said.
Across Asean, the combined population of these cities will increase by 51 percent between now and 2025, from 34.9 million to 52.6 million people.
The population in large towns and small cities of less than 500,000 will increase by 18 percent to 231.8 million which, when combined with the estimated 324.3 million rural population, will account for around 80 percent of the Asean population.
The report examined the influences that will shape development in the Asean region over the coming decade and identified increasing business activity, cross-border trading and demographic shifts.
With the population growth in Asean’s smaller cities, emerging towns and rural areas are considered the “sleeping giants” of the next decade.