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Showing posts from April, 2018

PH; CONSUMER SPENDING OF YOUNG AND GROWING DEMOGRAPHICS

The  Philippines'  young demographics remain as a key driver of domestic consumption. The Philippine Statistics Authority (PSA) census tallied the total population of the country in 2017 at 104.92 million. This figure translated to an annual average population growth of 1.55%.  The Philippines has one of the youngest populations within the APAC region with a median age of 24 years old. Majority of the population are also of working age (between 15-64 years old) which accounts for 64% of the country’s total population and is expected to grow by 16.8% between 2017 and 2026, outpacing all major markets in the region over the same period.

DRIVERS OF PHILIPPINE RETAIL LANDSCAPE GROWTH

The young demographics of the country, the rising disposable income of its young population, remain as key drivers of domestic consumption. There are other factors that drive the retail industry to grow such as: Increased consumer spending due to reduced unemployment rate brought by the BPO and the overseas work.  This increase in income of the households is boosting retail sales. Easy Bank Loans: Bank is offering credit with easy terms to the retail companies and financing up to 60% of capital.  There is a high availability of financing channels. Increase in Demand is leading to the growth of Organized Retail:   Entry of foreign brands and consumers desire to try new brands is driving retail industry; this increases the availability of product options. Omni Channel , the rise in a multi-channel sales approach that provides the customer with an integrated customer experience. The customer can be shopping online from a desktop or mobile device, or by telephone, ...

PHILIPPINE AS THE NEXT RETAIL DESTINATION

The Philippines remains at the forefront of the Asia Pacific (APAC) growth, underpinned by solid macro fundamentals that are driving sustained positive economic expansion. The country posted a 6.7% Gross Domestic Product (GDP) growth at the end of 2017.  Strong investment in infrastructure and construction, and solid household consumption, stimulated by low inflation and interest rates, boosted the economic growth of the country.  Beyond these indicators, the potential gains from the demographic dividend combined with the large volume of mall space and competitive occupancy costs remain as its two distinct advantages, overall, which should help the country become one of the attractive retailer destinations in APAC.

E-COMMERCE PENETRATION IN THE PHILIPPINES

Although many prefer online shopping, it only amounts to 39% e-commerce penetration, as of end of 2017. According to We are Social and Hootsuite, e-commerce shoppers in the Philippines spent an average of $37 (Php 1,900)  in 2017. 

THE RETAIL INDUSTRY IN THE PHILIPPINES: PSYCHOGRAPHICS

What does the Philippine Retail Industry looks like? It is composed of diverse players, tapping on what appeals to the market considering the psychographics of Filipino consumers: Awareness of Global brands among Filipinos. With the advent of smartphones, access to internet and information, Filipinos are now more knowledgeable about the products available in the market. Changing Global Retail Landscape. More foreign brands want to invest in the Philippine Market.  In the 2017 report of Cushman & Wakefield: How Global Brands are Shaping the Metro Manila Retailer Landscape,  foreign brands view Philippines to be one of the key focus markets within the Asia Pacific region due to the rising disposable income of its young population and increasing demand for household consumption. Increasing preference for online shopping. With the convenience and product options e-commerce has to offer, more and more shoppers are now going online. Franchising of Brands. Franchising...

PHILIPPINE RETAIL LANDSCAPE

What does it looks like? The Philippines with its solid macroeconomic fundamentals; young working population, rising disposable income of its young population, is an attractive destination for global brands. Economic activities that are a driving sustained positive economic expansion. Rising disposable income triggering the demand move in upward slope. This rising disposable income and increase in demand for a variety of commodities attracts foreign brands to enter the Philippine retail landscape. In a research conducted by the Business Insider in United States, 8,053 retail outlet closures were announced in 2017, and more than 3,800 will close in 2018. These figures are driven by the increasing preference for online shopping. While many retail stores in the United States and elsewhere in the world have been affected over the last few years, rendered obsolete by the consumer’s growing preference for online shopping among other factors, the Philippines meanwhile h...

ASIA-PACIFIC RETAIL AND ECOMMERCE SALES

Retail ecommerce sales in Asia-Pacific grew 31.1% in 2017 to $1.349 trillion. Gains were fueled by retailer competition, falling prices and mobile shopping uptake among consumers. Nearly 83% of sales came from China alone—the biggest e-commerce market in the world. Total retail sales in Asia-Pacific increased 7.7% in 2017, matching to $9.268 trillion. Several markets experienced higher consumer spending and e-commerce activity, as well as improving export business. 

DIGITAL GLOBAL REPORT

This year’s growth in internet users has been driven by more affordable smartphones and mobile data plans. More than 200 million people got their first mobile device in 2017, and two-thirds of the world’s 7.6 billion inhabitants now have a mobile phone. Social media use continues to grow rapidly, and the number of people using the top platform in each country has increased by almost 1 million new users every day during the past 12 months. More than 3 billion people around the world now use social media each month, with 9 in 10 of those users accessing their chosen platforms via mobile devices. The 2018 Digital Report shows a detailed analysis of the headlines for digital economy. The number of internet users in 2018 is 4.021 billion, up 7 percent year-on-year. The number of social media users in 2018 is 3.196 billion, up 13 percent year-on-year. The number of mobile phone users in 2018 is 5.135 billion, up 4 percent year-on-year.

THE GLOBAL RETAIL LANDSCAPE

It is a transformative time in retail. The shopper is clearly in the driver’s seat, enabled by technology to remain constantly connected and more empowered than ever before to drive changes in shopping behavior. “Everywhere commerce” has taken root, allowing consumers to shop however, wherever, and whenever they want—whether in stores, online, by mobile, voice activation or click-and-collect. Total retail sales worldwide from 2015 to 2020. Total global retail sales in 2020 are projected to amount to 27.73 trillion U.S. dollars. E-Commerce Share of Total Global Retail Sales from 2015-2021 (Statistica): •  Retail e-commerce sales as a percent of global retail sales from 2015 to 2021. •  In 2017, e-retail sales accounted for 10.2 percent of all retail sales  worldwide. This figure is expected to reach 17.5 percent in 2021. Roughly 45 percent of all internet users now use e-commerce sites, but penetration varies considerably between countries.