In recent weeks news that two major international brands are looking to enter the Philippine market has got consumers quite excited.
First, Swedish furniture giant Ikea expressed its plan to finally open a branch in the country, after a long presence elsewhere in the region. Despite no definitive timetable being laid out, fans of the brand are excited: finally, they can get their hands on the brand’s wide range of furniture and accessories for both home and office. And perhaps the Swedish meatballs, too. I specifically set out to get those the last time I visited Hong Kong.
Also announcing their entry to the Philippines is Canadian coffee chain Tim Horton, as part of its wider plan to establish itself in the Asian market. While the brand is arguably less popular than giants such as Starbucks, this is a brand anybody with relatives or friends who have immigrated to Canada should be familiar with. “Makaka-order ka na rin ng (You can order) ‘double double,’” one of them told me.
Many foreign brands have entered the Philippines in the past years, a possibility not imaginable to most of us. Sure, we’ve long had both luxury brands and giants such as McDonald’s, but only in the past two decades have we seen brands from around the world jostle for our attention and affections – and our hard-earned money. In the past few years, we’ve seen the entry of fast fashion brands such as Zara, Forever 21 and H&M; the last two were greeted with long lines on opening day.
This has been a long time coming. The Philippines’ rising middle class has made it ripe for both foreign retailers and foreign brands to enter the country. In recent years, the growing millennial demographic has shown a demand for new thinking – not just new brands, but new concepts and new experiences as well. As much as I don’t want to call myself a millennial – it’s such a loaded term – if you consider my age, I fall firmly in that category, and yes, I can say that we do like to try new things out. While I am loyal to some brands, I wouldn’t want to stick to the same old – I’d spend an afternoon at a branch of the Japanese chain St. Marc’s one time, and then return to my old reliable Coffee Bean on another.
In 2000 the passage of the Retail Liberalization Law allowed for the entry of foreign brands into the country, whether on their own or with local partners. Alongside globalization, the emergence of a generation whose cultural touchpoints are not just the usual suspects has come to slowly define the retail landscape. Now, go to one of the many malls in the country and you’ll see a healthy mix of foreign and local brands: increased competition leading to increased choice – and perhaps increased consumption – for Filipinos.
Of course, the narrative is now on whether our country is truly ready for the growth happening within it. Are we ready to satisfy the demand that has gone up, and will continue to rise?
I have found myself using a lot of Korean skin care products the past year, a result of a chance purchase during vacation in Seoul, and realizing that it worked on me like no other product has. Some of the brands I bought have stores here, but in some instances they do not have my preferred product in stock. It’s a bit of a game, this. “Sir, dalawa na kayong nag-order ng (There’s two of you ordering) BB gel,” the apologetic lady behind the counter just told me last week.
Sure, some of these problems are internal. Sure, some of the bigger players have the resources to ensure round-the-clock availability for their products. But they can only work within the constraints of the environment they operate in. We have seen, over and over again, the bottlenecks our outdated infrastructure and regulations pose. Shipments come in late after being stuck either in regulatory limbo or heavy traffic. You go to stores and get disappointed that they don’t have what you want in stock. Why not order online? You can’t be sure how much you’ll be charged for it in taxes – and if your order will ever arrive at your doorstep, rather than be pilfered by someone along the way.
It’s clear that Filipinos are looking for more choices, that we’re looking beyond our shores for products and experiences that will improve our lives, or maybe, just make us feel better about ourselves. Indeed, judging from the long lines when H&M first opened in Manila, if you build it, they will come. Or they might not, if supplies have run out. We have to work to modernize both our infrastructure and our policies to ensure our economy continues chugging along.
Now, the next question: how about local products? That’s for our next column, in a fortnight.
Henrik Batallones is the marketing and communications executive of SCMAP. A former board director, he is also editor-in-chief of the organization’s official publication, Supply Chain Philippines.
