- Category: Economy
17 Aug 2013
- Written by Bianca Cuaresma
The country’s retail industry is poised to become a “hot spot” for local and international retail investments with the current boom in consumer spending and economic growth, a global investment consultancy group said.
Oxford Business Group (OBG), in its economic update last week, said the Philippines represents “an important new market” in retail sales and investment as they expect the growth in the economy and the Filipinos’ purchasing power to continue in the next few years.
“Strong economic growth is boosting consumer purchasing power in the Philippines, driving retail sales and creating opportunities for investment by both local and international chains,” OBG said.
The report, titled “Retail in the Philippines set to soar and spread,” noted the Philippine Retailers Association’s (PRA) expectation of a double-digit growth in the retail industry to kick in this year, following the 10-percent growth in 2012.
Paul Santos, national vice president of the PRA, told OBG the country’s retail sector would be worth P1.61 trillion by 2016, up from P1.43 trillion in 2011.
OBG also said officials from international retailers have seen the benefits of investing in the Philippines.
“In July 2013 Ian Wade, executive advisor to Sainsbury’s, the UK’s second-largest supermarket chain, said the retail sector needs to market itself more to international brands, praising the Philippines as offering many advantages, compared to its nearby markets.” OBG said in its report.
According to OBG, Wade said the Philippines offers better value for money than its peer countries like Hong Kong.
“It has a greater variety of stores than most countries; some of the biggest malls in the world are all in one city. From a retail point of view, the Philippines has a lot to offer,” Wade said.
OBG also noted that international retailers expressed their interest in the Philippine market. Earlier this year, the fashion chain H&M said it was in the final stages of penetrating the Philippine market to join other international clothing lines that already launched their brands in the country such as Forever 21 and Uniqlo. In domestic investments, OBG also cited the growth of one of the growing supermarket chains in the country, where the store openings exceeded the administrations’ expectations.
“We were supposed to have 200 stores across the country by the end of 2015, but now we’re predicting that for the end of this year,” Leonardo Dayao, Puregold supermarket chain president, told OBG.
The Philippines, however, has yet to improve on online shopping as about only 3 percent of Filipinos use e-commerce.
OBG said the challenge for online sellers is to find the right payment mechanism for the country.
“Growth in online shopping is just one important change in a rapidly changing retail market, as consumers continue their shift their purchases from informal outlets to chain stores, both local and international,” OBG said.