KMC reveals Philippine retail trends
Growing luxury retail, eCommerce and changing consumer lifestyles are the top Philippine retail trends, according to locally-based KMC MAG Group, an associate of global property advisor Savills.
Strong consumption and sustained economic growth continue to fuel the retail market, an industry that is believed to represent one-fifth of the country’s economic output in the next 10 years.
This growth paved way to opportunities, new insight into consumer behavior, and new strategies for further business growth.
One of the key trends is the changing lifestyle preferences of the ‘traditionally frugal Filipinos,’ said KMC. Now, consumers can afford to focus more on quality than price.
“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,” said the report.
“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.”
Online retail is another trend that is shaping the retail scene, despite the country’s infamous slow and expensive internet connectivity. Online shopping in the Philippines has been rising and expanding to new markets, with specialized online stores and websites for services popping recently.
Fast-growing online retail shops include Lazada and Zalora for electronics, fashion, and other consumer items, while sites like Lamudi, Carmudi and Moneymax are gathering more attention for their specialized services in the real estate, finance and automotive sectors.
Another retail trend is the continuous development and diversification of real estate into the retail segment. Real estate developers are now keen to build mixed-use projects that offer the ultimate retail experience: cinemas, vast shopping and dining options, kids’ areas and entertainment selections.
Ayala Land and Megaworld are two top real estate developers that have become aggressive in the expansion of their retail portfolio. By the end of 2016, Ayala Land will launch Vertis North Mall in Quezon City, Megaworld will finish Plaza Magellan in Cebu, and Federal Land will complete the Big Apple Mall in BGC, designed to replicate New York’s retail destination, Fifth Avenue.
Other retail developers are Starmalls and Robinsons, which are set to launch several retail projects in the next few years across the country.
“Starmalls aims to establish five 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 per cent,” said KMC.
The rise of luxury retail completes the top trends in the Philippine retail industry.
“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,” said the report.
“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.”
In the long term, the luxury market in the Philippines is seen to soar along with the growing economy. KMC thinks that Filipino consumers will be more affluent, and luxury brands will be more confident in venturing into the local retail industry.