Hard times force consumers to ‘sachet-fy’

When times are hard, people not only simplify but are also forced to "sachet-fy" — purchasing anything from shampoo to cooking oil in handy sachets and keep the delicate balance of a hand-to-mouth existence.

Sen. Manuel Roxas II noted that consumers have learned to adapt to economic hardships by deciding to buy products in smaller quantities rather than pay for volume which may be cheaper in the long run.

"The ‘tingi’ economy or what they call ‘sachet-fy’ is one way the average Filipino consumer has been able to cope with high prices and low incomes. Both the public and private sectors need to recognize this and find a way to meet the needs of our people," Roxas said.

Roxas made this assessment during his speech before the National Conference of the Philippine Retailers’ Association, where he asserted that there was "a seeming disconnect between economic statistics that we follow and the reality that we see in our shop floors, the anecdotal references that we also need to pay close attention to."

Roxas has called on local retailers to innovate and adapt to the change in consumer behavior under a "sachet economy" so that both consumers and retailers can help each other survive.

He cited as an example a pilot testing of a cable TV service in Cebu where customers can opt to pay every week or even each weekend for cable service that normally requires a monthly subscription.

Roxas attributed the stable currency to the increasing and steady flow of remittances from overseas Filipino workers, which is helping the country cope with the threat of oil price increases due to conflicts in the Middle East.

"The financial market is strong. Most economic indicators seem to depict a rosy, buoyant picture. However, the most often described or used adjective among local retailers and even, our market vendors is the word ‘matumal’ meaning, slow, ‘so-so’, flat," he said.

Roxas, former trade secretary and current chair of the Senate committees on trade and commerce and economic affairs, offered the Philippine Retail Association three strategies for innovation:

• Re-think existing business models; offer consumer satisfaction through value added; and pursuing e-commerce as a new form of retailing.

"Your association defines you as retailers, but an alternative business model would be for you to be like real estate developers with stalls, shelves, and strategic locations to offer potential partners, investors and customers," Roxas said.

• Consider international consolidation — Local retailers may need to make bold decisions to do cross border transactions. "Go ASEAN, then Asia, then go global by taking advantage of opportunities as prescribed under international, regional and bilateral trade agreements."

• Recognize and accept economies of scale. "Mas mahal ang tingi kesa sa (Retail is more expensive than) wholesale and yet you find that there is no money in the pocket of Juan dela Cruz that is why he is forced to ‘sachet-fy.’"

Under the second strategy, Roxas said manufacturers and retailers need to respect the sacrifices that ordinary consumers are forced to make on a daily basis. "Consumers have made a distinction between ‘mura’ (cheap) and ‘sulit’ (value for money)."