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Philippines retail sector remains robust – SM

Iris Gonzales (The Philippine Star) - November 22, 2019 - 12:00am

MANILA, Philippines — The country’s retail industry remains vigorous and upbeat despite the growth of online shopping, the SM Group said.

At the recent Nikkei Business Philippines-Japan Investment Forum in Tokyo, Japan,  SM Supermalls chief operating officer Steven Tan said robust overseas Filipino workers’ remittances and sustained activity in the business process outsourcing industry are fuelling consistent growth in the Philippine economy and driving consumer purchasing power.

These factors make retail still vibrant in the country unlike in other markets, Tan said.

“Unlike how it is in many parts of the world, retail in the Philippines is vibrant, upbeat and full of opportunity,” Tan said in his address before a gathering of 500 chief executive officers and business leaders in Japan.

The growth of the Philippine economy, supported by the government’s massive infrastructure push is directly impacting consumer sentiment in the Philippines, he said.

As of the end of September this year, consumer confidence in the Philippines was the second highest in the world, a shade behind India.

“Optimism to spend among Filipinos is more than just a sentiment. We see it translating into actual consumer behavior, especially retail,” Tan said.

With robust consumer sentiment and activity, total retail sales in the Philippines grew six percent last year.

“It is interesting to note how brick-and-mortar retail continues to dominate and how it will continue to grow alongside the growth of internet retailing in the Philippines. The Philippine environment is conducive to all kinds of retail, both digital and brick-and-mortar as we look at opportunities in both channels,” Tan said.

In the past five years, there has been a growing number of foreign brands entering the market particularly in food and beverage as well as clothing and apparel.

The attractiveness of the Philippine market to foreign retailers is further enhanced by an average rental rate that is highly competitive when compared with other ASEAN countries such as Vietnam and Indonesia.

During the forum, Tan encouraged Japanese retailers to consider three immediate opportunities in the Philippines: food, beauty, and health and well-being.

He said there is growing interest in Japanese brands in the malls.

SM GROUP STEVEN TAN
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