Globalization has made competitiveness of paramount significance to the success of almost any business. In today’s global marketplace, the hurdle sounds high especially for previously closed economies that are now opening up their markets. The Philippine’s retail sector is no exception.
When the Retail Trade Liberalization was signed into law last March 7, 2000, it also opened the gates wider for foreign retailers who may now own 100 percent of retail ventures in the country, provided the paid-in capital is above the specified threshold. Most of them penetrated the local market through joint venture agreements or franchising, which have also become the norm across continents.
Eduardo N. Roa, managing director of ACNielsen Philippines, adds that initiatives from the World Trade Organization (WTO) and the Asia Pacific Economic Council (APEC) also indicate the opening up of the RP market.
The good news for local retailers is that consumers – however price sensitive they may be – continue to troop to the malls and shopping centers despite the slowdown in the economy. Consequently, mall developers and retailers who crave for space have also been coming on stream in anticipation of rising incomes and optimistic growth.
The country’s largest retailer SM Prime Holdings, Inc., for instance, have recently disclosed its plans of coming up with two malls every year after realizing a 10.69 percent growth in its net income during the first three months of this year to P901 million from only P814 million in the same period last year.
Prospects for the new entrants in the country with the right marketing combination and who can leverage their global brands have never been brighter as well. “Filipino consumers will readily accept global consumer products,” Roa declares as he refers to the volume measures taken from ACNielsen’s Retail Audit (i.e., biscuits, chocolates, and canned fruit) which indicate the Filipino’s predisposition toward imported products. Roa went on to explain that such high level of awareness can also be traced back to the Philippine’s historical roots as well as the heavy dosage of advertising that accompany global brands.
Indeed, the current free market scenario is both a threat and an opportunity particularly for local retailers, adding to already critical factors like the status of consumer spending, oil prices, rising interest rates, and the fluctuating stock market.
In the globalization challenge that will test the limits of retailing, we bring you six retail stalwarts who set off from the Philippines to the frontiers of Asia, and most of them have already began luring the rest of the globe with all the right moves. Take Josie Cruz Natori who found her niche in intimate apparel in the United States, in Asia and in other continents in Europe where it used to be a sleepy industry in the Philippines. Our variation of samplings also include myAyala.com, a premiere online shopping site that reaches the Pinoy market in Asia and abroad with the advent of electronic commerce, 7-Eleven Philippines after having found its formidable ties with Taiwan’s President Chain Store Corporation, and Toby’s Sports, the accidental emporium that revolutionized the country’s sports retailing. We also shopped for retailing must-haves from Anton Huang, the retailing specialist who brings the world’s best brands to Philippine shores and Fort Bonifacio’s Global City, an emerging new retail and entertainment district that promises to provide a lucrative shopping destination like never before.
We dug deep into what’s common among the key people behind these successful stores, and we find that they all have what GE’s Jack Welch calls the globalization of the mind – a very essential tool for our featured Star Retailers who have found their glitter shining much brighter throughout the Asian region, and arguably the rest of the globe. * * * *
HIGHLIGHT: The current free market scenario is both a threat and an opportunity.
On the Cover
In the globalization challenge that will test the limits of retailing, Launch Asia’s Business Editor Denice Christine Garcia brings you six retail stalwarts who possesses what GE’s Jack Welch calls the ‘globalization of the mind’ as they set off from the Philippines to the frontiers of Asia, and to the rest of the globe.