The Philippines' sustained economic growth and strong private consumption continues to benefit the retail market, which is said to account for a fifth of the country's total economic output in the next 10 years. This growth has not only created exciting new trends in the industry, but also opened up several opportunities, provided new insight into consumer behavior, and drove new strategies for further business growth.
Some of the key trends worth taking note of are the following:
Changing lifestyle preferences offers opportunities for new brands
Traditionally frugal Filipinos who would typically base shopping decisions on price point have now become more concerned with quality. Because they have more money to spend, Filipinos are now purchasing higher quality essentials, such as food and household products and big-ticket items such as passenger vehicles.
This has also brought a lot of new dining, shopping, and entertainment concepts from all over the world, opening up doors for brands who wish to expand into the Asia-Pacific market. Among the newest brands to enter the country is Houston-based jewelry and accessories retailer Charming Charlie who just opened its store last December 2015.
Emergence of online retail
The Philippines may be known for having one of the slowest and most expensive internet connectivity in the world, but this has not deterred the growth of online shopping in the country. Online stores from various industries continue to take advantage of the rising opportunity to tap new markets and create specialized online stores/websites for services.
Some of the fast-growing online retail shops include Lazada and Zalora for electronics, fashion, and other consumer items, while sites like Lamudi, Carmudi, and Moneymax continue to increase in popularity in providing specialized services in real estate, finance, and automotive industries.
Real estate developers continue to diversify into the retail segment.
Real estate developers also take advantage of the opportunities in retail as they continue to build several mixed-use projects that provide the ultimate retail experience - cinemas, vast shopping and dining options, kids' areas, and entertainment selections.
Major developers Ayala Land, Inc. and Megaworld have become very aggressive in the expansion of their retail portfolio. Some of the most awaited developments include Ayala's Vertis North Mall in QC, set to open by the end of 2016; Megaworld's Plaza Magellan in Cebu, which is set for completion this 2016; and Federal Land's the Big Apple Mall in BGC, which is said to be reminiscent of the renowned Fifth Avenue retail destination in the United States.
Other notable retail developers such as Starmalls and Robinsons also announced the launch of several retail projects in the next few years across the Philippines. Starmalls aims to establish 5 new malls every year until 2017 while Robinsons is focused on expanding its reach into areas outside of Metro Manila, with a target of expanding their gross leasable space by 10%-11%.
The rise of luxury retail
The surge in tourist arrivals due to the flourishing gaming industry, increased competition in retail shopping in the Philippines, and the entrance of several new international brands in the market has contributed to the rise of luxury retail. The growth for the luxury market in the Philippines is seen to soar in the long-term along with its strengthening economy. Consumers are seen to become more affluent, and luxury brands will be more confident in venturing into the flourishing retail sector.
One of the most exciting luxury retail developments currently under construction is Tiger Resort in Entertainment City. Designed to set a new standard of opulence and luxury in the Asian region, Tiger Resort Luxury Mall will be the pioneer of luxury shopping in the Philippines, home to the most prime retail space offered only to the world's most premier and luxurious brands.