Philippines Sector Brief – Retail

I. Quick Facts
• The industry contributed 13% to the country’s GDP, which is expected to rise to 20% in 10 years
• 70% of country’s GDP comes from consumer spending
• UK exports to the Philippines amounted to a total of £374 million in 2013, a 13% increase from the previous year
• Retail sales projected reach P1.61 trillion by 2016 and P1.78 trillion by 2017
• E-commerce worth PHP 3 billion (70 million USD)
• In 2015, developers added approximately 600,000 square meters of new retail space
• Strengths of the sector:
– Growing and consumer-oriented population of 100 million
– Expanding middle class
– Filipinos have a strong appetite for imported brands
– Westernised culture result in the high success rate of international brands & concepts
– Country has 3 out of the 10 largest malls in the world (measured by floor area)
– Wealth is being distributed outside Metro Manila, with malls opening in the provincial              areas
– High demand for retail spaces

II. Business Opportunities
• Affordable lease rates for commercial spaces
• Rise in e-commerce as a new avenue for retailers

III. Key Players
• SM Group – largest retail player with over 50 shopping malls and 240 retail stores
• Ayala Corporation – largest conglomerate
• Robinsons – manages its own brand of malls, supermarkets and department stores
• Rustan’s – leader in high end retail brands, distributing around 70 foreign brands

IV. Challenges
• Power and logistics are considered as two primary concerns of manufacturers and retailers
• Slow infrastructure growth
• Increasing competition between brands
• Issues in payment and cybersecurity in online goods

V. Trends
• The strength of the Philippine retail market and subsequent retail liberalisation will continue to generate investor interest
• Retail landscape is seeing greater competition with the addition of a number of brand options for Filipino consumers
• Mall expansion will continue to extend in rural areas
• Arrival of international retail chains

Sources: Oxford Business Group The Report: Philippines 2015, Inquirer Business, The Philippine Star, GMA Network, Philippine Daily Inquirer, CBRE Philippines, Euromonitor, Manila Standard Today, KMC Mag Group

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Sectors: Wholesale & Retail
Countries: Philippines
Topics: Market Research
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