Property consultant Cushman and Wakefield said foreign retailing in the Philippines is still predominantly in the food and beverage business.
Still, the market remains a potential spot for foreign retailers, it said.
Between 2017 and 2018, Cushman and Wakefield said 68 new foreign retailing brands that entered Metro Manila, short of the recorded 116 foreign brand entries between 2015 and 2016.
“The retail landscape in the Philippines is still on a positive growth trajectory. This is manifested by the recorded 34 new foreign brands that have opened their primary branch in the country from January to November of 2019,” it said.
The property consultant said only a few high-end brands have dipped their hands into the local retailing sector in the past two years — apart from Off-White, John Lobb Bootmaker, and Wagyumafia that cater to more upscale consumers, Stefano Ricci, Tiffany & Co, Loewe, Hogan, and Tommy Jeans cater to the mid-tier.
“Unsurprisingly, the influx of new brands is still dominated by the food and beverage (F&B) segment, which accounts for 63 percent of the total retail types. This is particularly interesting given that out of 67 F&B retail types that entered between 2015 and 2016, 13 brands including Peperoni Pizzeria, Annam Noodle Bar, BB Brand Bakery Bistro, Mr. Pizza, Applebee’s Grill & Bar, among others, struggled in maintaining their positions that led to them pulling away from the local retail market,” it said.
“With competition, reinforced by the advent of stronger concepts, that resulted in rate of closure nearly as high as the rate of entry, the food services market remains attractive to international brands attributable to the country’s ideal demographic make-up,” it added.
Last year, Shake Shack, Popeyes Louisiana Kitchen, and Panda Express from United States; Menya Kokoro, FRNK, Shari Shari Kakigori House, and Beard Papa from Japan; Jim’s Recipe from Malaysia; Elephant Grounds, Honolulu Café, and Hui Lau Shan from Hong Kong; Ministry of Crab from Sri Lanka; and The Alley, Presotea, Original Cake, OneZo Tapioca, JLD Dragon, Grand Castella Cake, Xing Fu Tang, and Puffy’s Soufflé from Taiwan, all ventured into the Philippines trying their luck on the local F&B market.
The clothing and apparel segment has since experienced limited new brands coming in since 2014 after taking a setback from the series of brick-and-mortar store closures, the property consultant said.
“… select sporting goods retailers are making new waves with the opening of Intersport and Decathlon,” it said.
Other new clothing and apparel retailers include In Good Company, Puma Select, Popcorn General, and Beyond The Vines.
In healthcare and beauty, Elizabeth Arden opened its first Asian store in the Philippines together with beauty retailers from South Korea, Innisfree and Club Clio.
“Travelon, a Chicago-based travel product retailer, has chosen Philippines for its first standalone store, and Anello, after opening its first branch in 2017, has since then multiplied to more than 20 stores in Metro Manila,” Cushman and Wakefield said.
“Subsequently, Mujosh, Rudy Project, and Jins have joined the country’s international eyewear brands while Les Nereides Paris, Luk Fook, and Chow Tai Fook are the new jewelry retailers,” it added.
Cushman and Wakefield said the strong economic ties between the country and its neighbors in Asia- Pacific have made the Philippines a desirable spot for Asian brands, with 64 out of 102 brands, or 63 percent of the total new foreign retailers, coming from the region. The majority came from Japan (17 brands) and Singapore (12 brands).
“Asian brands are strengthening their grip in the food services industry as they focus on bringing F&B concepts in the market. Since 2017, 44 out of the 64 Asian brands are with F&B concepts, increasing the region’s share in F&B segment to 64 percent, while F&B brands from US and Europe have 31 percent share,” it said.
“Retailers from Asia and Europe are taking tractions in the Philippines in terms of brand count, having 37 percent and 31 percent share, respectively, of the total number of brands that are still in operation in the country,” it added.
It said brands from Asia are more on F&B concepts while retailers from Europe dominate the clothing and apparel retail type, particularly in fast-fashion and luxury segments, with 61 brands in total upon the addition of Off-White, Puma Select, and Loewe, to name a few.
Cushman and Wakefiled meanwhile said foreign retailers are reinventing their physical stores from the traditional brick-and-mortar formats into “something that brings more lifestyle experience.”
Flagship stores are now designed to be retail destinations that present unique visual and experiential concepts, it said.
“Multi-channel retailing is becoming the new norm as most foreign brands that entered the Philippines launched their online channels and physical stores almost simultaneously. Social media platforms are also being utilized to serve as a marketing channel and at the same time, as an effective way of gathering customer feedbacks,” Cushman and Wakefield said.
