Local retailers told to apply out-of-the-box game plans

CEBU, Philippines - With the Philippines now being eyed as a fertile ground for expansion, retailers are reminded anew to brace for ‘business not as usual’.

Philippine Retailers Association (PRA) past president Bernie Liu advises local retail players to think of “not as usual” strategies, adopt alternative business models and apply out-of-the-box game plans to survive competition against the global giants.

Liu admitted that the entry of international players to the Philippine retail shores already affected some Filipino developed brands, all the more for local brands to be always on their toes.

Liu said it is imperative for local retail players to spend more on innovation, market analytics, apply best practices, and insist on (product/brand) differentiation, in order stay in the game.      

"You don't have to open a lot of stores," he said explaining that constant market presence and strong connection with the market are just few of the tips that local retailers should apply.

The game may be harder to play now, but those who are willing to spend or employ breakthrough strategies can take advantage of the profitable retail market in the Philippines, including the international marketplace.

Retail sales of Filipino fashion brands have dropped by 50 percent since 2014, as big foreign brands with their unlimited resources dominate the domestic fashion sector.

Retail industry leader Samie Lim earlier said that local fashion retailers have failed to match the resources of the huge foreign brands which now occupy premium locations and big spaces in the country's premier shopping centers.

Earlier, Lim lamented that local retailers have always been at the mercy of their landlords or mall owners making it very difficult for a start-up retail company to open an outlet in a mall.

According to Lim, a mall tenant has to pay six to eight months of rental deposits while others ask for 12 months. They have to post construction bond and payment for common spaces. A simple food cart requires P25,000 monthly rental.

Before a retailer can put up an outlet, he has to shell out almost P2 million in upfront cash.

However, Liu believes that like his own brand Penshoppe, and other Filipino-developed fashion names, local players can certainly thrive, if they have to accept that "business is not as usual" for today's retail industry. (FREEMAN)