MANILA - The Philippines' global stature as a shopping destination fell sharply this year despite the growing middle-class and hefty consumer demand, according to A.T. Kearney.
In its latest Global Retail Development Index, the consulting firm said the Philippines ranked 29th this year with an overall score of 43.4 points, down from last year's 16th place.
The annual study ranks the top 30 emerging markets on a zero-to-100-point scale - the higher the ranking, the more urgency for retailers to enter the country.
The scores are based on four variables: economic and political risk, market attractiveness, market saturation, and time pressure.
The Philippines scored poorly in terms of market attractiveness, with 28.3 points, and time pressure, 38.8 points. The country however scored slightly better in terms of country risk at 54.6 points, and market saturation, 52.5 points.
While salaries remain low in the Philippines, household incomes are bolstered by overseas remittances that help maintain positive economic growth, A.T. Kearney said.
"The bulk of this income goes to retail spending. The domestic job market is improving as the outsourcing industry grows, thus bringing more dual-income, middle-class families and young professionals with disposable incomes to urban areas," the consulting firm said.
In the first quarter of the year, the Philippine economy grew by 6.4 percent on the back of a 7.1 percent increase in consumer spending, which comprised two-thirds of the country's gross domestic product.
A.T. Kearney said most of retailers and shopping centers in the Philippines are in urban areas, with about half of total retail sales concentrated in Metro Manila.
"As more real estate becomes available in city centers, foreign firms have entered, including Japanese clothing retailer Uniqlo, UK women's apparel seller Topshop, Japanese convenience store chain FamilyMart, and US-based sandwich shop Quiznos," the consulting firm said.
According to A.T. Kearney's latest retail index, the most attractive market was Brazil, followed by Chile, China, Uruguay, India, Georgia, United Arab Emirates, Oman, Mongolia and Peru.
Other Asian countries that figured in the poll were Malaysia at 11th place, and Indonesia at 16th. Thailand and Vietnam were excluded from this year's list.
The report said Asia Pacific continues to have impressive growth potential because of its high economic growth rates, a burgeoning middle class, and rising consumer spending, particularly in China, India, Malaysia and Indonesia.
"Asia has been a target for Japanese and Korean retailers seeking to offset domestic declines," A.T. Kearney said.
"Given the accelerated growth rates of developing countries compared to the anemic growth in European and North American markets, global retailers must have a strategy for expansion into developing markets," Michael Moriarty, A.T. Kearney partner and study co-leader said.
In the past five years, Wal-Mart, Carrefour, Tesco and Metro Group saw their revenues in developing countries grow 2.5 times faster than in their home markets, Moriarty said.
source: interaksyon.com
