(Source: Inside Retail Philippines | 6 June 2016)
Strong GDP growth and Philippine retail have put the country in the Global Retail Development Index’s top 20.
The Philippines placed 16th in the AT Kearney 2016 GRDI, which ranks the top 30 developing countries for retail investment worldwide. The Index analyses 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies to identify emerging market investment opportunities.
Retail is expected to account for one-fifth of the country’s GDP by 2025, as the outsourcing industry helps boost the local economic growth. Filipinos traditionally buy household items in sari-sari stores but the GRDI reports that the country’s retail experience is modernizing, with retail giants investing billions in malls.
With a population of more than 100 million, total retail sales have reached $134 billion, with modern retail sales area growing 13 per cent in 2015. Some of the Philippines’ biggest developers include Ayala Corp, JG Summit Holdings, SM Investments and Robinsons, the last of which plans to invest almost $100 million in 10 new community malls by 2020.
Both the southern cities of Cebu and Davao are being groomed to be the next big retail players outside Manila as incomes come pouring in through BPOs.
“Some big eCommerce players are also moving into the market. Ascend Group, Thailand’s leading eCommerce retailer, launched iTrueMart.ph, and Singapore-based Lazada hopes to make the Philippines its largest market,” said the GRDI report.
The study identifies not only the markets that are most attractive today, but also those that offer future potential.
During the 15 years the report has been compiled, developing markets have seen tremendous growth both in terms of population, which has grown 21 per cent to 6.2 billion, and in terms of retail sales, which have increased 350 per cent in developing countries and now represent more than half of total global retail sales.