3RD QUARTER, 2017
Local News
Philippine retail
industry booming
The Philippine retail industry is anticipated to
account for a fifth of the country’s overall economic
output in the next decade, according to infrastructure
group KGLI Asia CEO/group investment director
Mark Williams.
Williams said that the positive growth is being driven by a business
process outsourcing (BPO) industry that is expanding at a rate of
least 10% annually, and a middle-class population that is projected
to reach 8.4 million by 2030. While JLL expects 88,000 sqm to be added to the retail space
supply this second quarter. Cumulative retail space is estimated by
JLL to reach 9 million sqm by 2020.
Quoting an AT Kearney report, he added that Asia Pacific has four of
the five top countries in the Global Retail Destination Index (GRDI),
thanks to a combination of large populations and high growth. The
Philippines has the second-highest time pressure score, just after
Vietnam, indicating an urgency to enter the country and capture
growth opportunities. “Undoubtedly, the primary drivers of buying power and household
consumption are the steady flow of remittances from overseas
Filipino workers and the growing BPO industry,” says BMI. Average
monthly remittances were about US$2.2 billion last year, growing
at 11% year-on-year since 2001. More than a third of domestic
consumers receive remittances.
The latest entrants include Canadian F&B brand Tim Hortons,
Singaporean F&B brands Baker & Cook and Plank Sourdough
Pizza, and Hong Kong furniture brand Simply Modular. Separately,
global brands are pitching for franchise opportunities, including
Lawry’s The Prime Rib from the US and China’s Element Fresh. Euromonitor International says the country’s middle-class
consumption is expected to change the retail landscape with the
number of middle-class households in the Philippines set to grow
by 41.8% between 2015 and 2030.
Some major developers, notably Ayala Land and Megaworld,
have aggressively expanded their retail portfolio. According to
Santos Knight Frank, F&B openings — ranging from fast food and
restaurants to coffee shops — account for about 63% of total retail
openings in the first quarter of this year, followed by clothing and
apparel with 26%.
The report added that by next year, the market is projected to have
a retail space supply of 500,000 sqm of gross leasable space.
This forecast growth puts the Philippines among the top 10 nations
with the fastest rates of middle-class expansion for 2015-2030. The
median disposable income is set to reach $11,429 per household
in 2030, representing a 70% real gain from $6710 in 2014.
As millennials surpass the baby boomers as a demographic size,
they are dictating retail spending, says Williams. Many millennials
work in the flourishing BPO industry and have high disposable
incomes. As a result, more retail establishments in NCR and other
emerging growth cities are being developed at a rapid rate.
Inside Retail Asia, 7/19/2017
Philippines set to be Asia’s fifth
largest retail grocery market
The Philippines will soon be
Asia’s fifth largest retail
grocery market, according
to IGD Asia-Pacific program
director Shirley Zhu during the
24th NRCE.
Data-protection experts including
National Privacy Commissioner
Raymund Enriquez Liboro confirmed
that compliance to data-privacy
and data-protection regulations
can
help
give
competitive
advantage in business operations
which include the retail industry.
She said the market will grow by an
average of 9.3% year-on-year between
2016 and 2021.
Grocery retail sales in the Philippines
are set to amount to PHP7.08 trillion
(US$149.99 billion) by 2021 from
PHP4.53 trillion (US$95.98 billion) in
2016, the international grocery research
organization’s data concludes.
Zhu says the growth will be driven by
a growing population, strong domestic
Data-privacy
compliance a
competitive edge
for PH businesses
consumption and a buoyant economy,
lifting it from sixth to fifth, behind China,
India, Japan and Indonesia.
“The Philippines is an exciting market to
watch. Modern trade currently accounts
for about 20% of total grocery retail sales
and is growing rapidly,” said Zhu.
page 6
He added that the Data Privacy Act (DPA) of
2012 promotes international best practices
in data protection comparable to data-
privacy frameworks, such as the European
General Data Protection Regulation (GDPR)
and the Asia-Pacific Economic Cooperation
Privacy Framework.
“With ASEAN integration coming up soon,
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