Retail sector a bright spot in PH, says Oxford
The country’s retail sector can become one of the new bright spots for foreign investors looking to take advantage of robust consumer demand that is driven by rising income levels across the archipelago, according to the Oxford Business Group.
In particular, clothing brands such as Forever 21 and Uniqlo and international supermarket chains should look at second-tier cities that are still dominated by mom-and-pops and sari-sari stores due to the neglect of big local firms.
“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,” Oxford Business Group said in a statement this week.
The statement cited a recent forecast by the Philippine Retailers Association (PRA), which said the consumer sector would likely grow at a double-digit rate this year to match last year’s 10-percent expansion.
According to Paul Santos, national vice president of the PRA, the sector will be worth $40 billion by 2016, up from $30 billion in 2011.
Officials from international retailers have also highlighted the benefits of operating in the Philippines, Oxford Business Group said.
The firm cited statements made last July by Ian Wade, executive advisor to Sainsbury’s, the UK’s second-largest supermarket chain, emphasizing the opportunities in the local retail sector.
“The retail sector needs to market itself more to international brands… the Philippines as offering many advantages compared to its nearby markets,” the statement read.
“The Philippines offers better value for money than neighbors like Hong Kong,” it added.
Among the biggest opportunities for new investors are cities outside major urban centers like Metro Manila, Cebu and Davao.
Oxford Business Group noted that some of the biggest malls in the world were all in one city.
This is good news for the host of international retailers hoping to make waves in the Philippine market.
In March 2013, fashion chain H&M announced it was in the final stages of entering the country, joining other top brands including Forever 21 and Japan’s Uniqlo, which plans to open at least 50 stores in the country by 2015. Paolo G. Montecillo