Joy Santos
Jul 20, 2015

The world is coming to the Philippines

Home to some of the ‘selfiest’ cities in the world, the fast-growing and brand-crowded Philippines demands that brands find new and relevant ways to integrate with consumer lifestyles.

The world is coming to the Philippines

Home to some of the ‘selfiest’ cities in the world, the fast-growing and brand-crowded Philippines demands that brands find new and relevant ways to integrate with consumer lifestyles. 

The Philippines, once dubbed the sick man of Asia, is now the second fastest-rising economy globally. That strength poises the country to become an important economic force in the wider Southeast Asian region. In 2014’s last quarter, the market garnered one of the highest leaps in consumer confidence levels, elevating it to the number two spot, along with Indonesia, in terms of the most optimistic countries in the world.

But even without taking into account the Philippines’ economic growth over the past few years, Filipinos have always been one of the happiest people in the world, often landing on the top ten of global happiness surveys. What the positive growth rate actually helped achieve is to convert this optimism to actual purchase action.  

According to a Nielsen study released in the last quarter of 2014, nearly 80 per cent of Filipinos “feel bullish about the state of their personal finances over the next 12 months” while half of those surveyed think that “it is a good time for people to buy the things that they want and need”. International retailers have been quick to take advantage of this opportunity. To-date, almost 200 new foreign brands have entered the country – from French high-fashion house Hermès to Swedish fast-fashion giant H&M to American discount footwear retailer Payless ShoeSource – the bulk of which opened shop as recently as two years ago.

Aside from international retail brands, the food and beverage industry is also whetting the appetites of Filipinos in a big way, with new dining places opening all over Metro Manila. From global specialty cuisine to locavore-inspired fare, restaurants from different parts of the world as well as homegrown ones have sprouted all over the city. In 2014, New York’s Motorino and Todd English Food Hall, Hong Kong’s Michelin-starred restaurant Tim Ho Wan, Fukouka’s Ippudo and Argentina’s La Cabrera, among others, set up shop in the country. Local concept restaurants and food events are also making Filipino food fans queue for a table or a spot – from the aviation-themed Blackbird restaurant to foodie neighborhoods like Kapitolyo Village in Pasig City to food streets like Maginhawa Street in Quezon City.

The Philippines is also becoming home and host to integrated resorts (City of Dreams, which houses the Robert De Niro owned Nobu Hotel, was the latest to open in December 2014), foreign acts (Bruno Mars, Mariah Carey, Taylor Swift, Macklemore and Ryan Lewis to name a few), international sports matches (Ultimate Fighting Championship, IPTL headlined by Maria Sharapova and Andy Murray) and other high-profile establishments, events and personalities.

This deluge of choices for shopping, dining and entertainment presents a challenge for brands to reevaluate not just their value proposition but also their experience proposition. How can brands create a seamless and rewarding experience for customers regardless of the touchpoint – whether they’re browsing or shopping at the physical store, or on their computers, or on their mobile phones? 

One of the ways that retail companies are leveraging this situation is to refocus developments from giant malls to community/neighborhood malls. This smaller retail format allows retailers to expand their reach into residential areas and create new revenue streams outside the usual city centers. For customers, community malls present an even more convenient way to shop as these are accessible by public transportation such as the jeepney or tricycle that ply secondary and tertiary roads; some are even within walking distance of their homes. For brands, community/neighborhood malls enable them to penetrate previously underserved or untapped markets, particularly those outside Metro Manila.

Another way that the retail landscape has evolved is the growing popularity of ecommerce. Per We Are Social’s 2015 Compendium of Digital Statistics, 21 per cent of Internet users in the Philippines bought something online via PC while 11 per cent did so using their mobile phone. According to online shopping mall Lazada, Filipino shoppers spend the most time on their site as compared to their other Southeast Asian customers.

Online shopping is not the only activity keeping Filipinos occupied. In keeping with its reputation as the social media capital of the world, the Philippines earned yet another title when Time Magazine officially declared Makati City (known as the country’s financial center) as the “Selfie Capital of the World”. In fact, two Philippine cities made it to the list of the publication’s 100 “selfiest cities” in the world. It’s no wonder that photo editor apps like Camera360, Retrica and Cymera as well as Go-Pro and the now ubiquitous selfie stick that take auto-photography to the next level are fast becoming go-to tools for the snap happy population.

Selfies isn’t the only thing fueling social networks in the Philippines. Chat apps like Viber, WeChat and Facebook Messenger, are gaining traction particularly with the younger demographics and families of OFWs (overseas Filipino workers).  Where Facebook posts are for broader audience consumption, messages via chat apps are more direct, intentional and private. And, unlike texting, users on chat apps can express their feelings more accurately via stickers, photo messages and even video messages. Best of all, no fee is charged in sending a message, making it a really smarter way to connect compared to calling or texting.

Filipinos are also finding more clever ways to go about their daily commute. With vehicular traffic speed in Metro Manila averaging around 30kph, commuters rely on Twitter and navigational apps like Waze and MMDA (government body whose charge include traffic management in the metro) for information on the traffic situation so that they can plan the most efficient route to get to their destinations. Technology-powered transport services such as Uber, Grab Taxi and Easy Taxi eliminate the hassle of queuing up and provide passengers the convenience of being picked up at the place and time of their choosing. Definitely a great way to outwit picky cab drivers, avoid the rush hour competition and ensure a safer way to travel especially during late nights and the odd hours.

With the future of the Philippine economy promising to remain rosy, Filipino consumers can look forward to more brands jockeying for a share of their attention and their purses. For brands to stand out in the ever-intensifying clutter, the answer might not necessarily lie in reinventing the consumer experience but rather in finding new ways to integrate and embed themselves into the relevant parts of the consumers’ lifestyle. Digital will remain an important tool, and as technology gets cheaper and more ubiquitous, the opportunities for brands to leverage online to enhance the offline experience promise to be even more exciting.

 

Joy Santos is head of strategy for Leo Burnett Manila

 

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