His confidence is exceptional, as shown in his standing in the Nielsen Global Survey Consumer Confidence Index: he garnered 121 points, making him the second most confident and optimistic consumer in the world*. This was the highest level reached by the Philippines since the fourth quarter of 2010. The index ranks the country next only to Indonesia with 124 points, or about 30 points above the global average of 94 (see Figure 1).
But Juan’s confidence is even coupled by his smarter shopping decisions. Recent market trends prove that his preferences gear more towards affordability, convenience, and trust.
A research by Nomura, a Japanese financial firm, remarks that Filipinos, with an average per capital annual income only at $1270, have a preference for affordable goods, and that it is too early for premium-priced products to dominate the market because living standards are still low (see Figure 2, 3, and 4). It mentioned the example of Haagen-Dazs, with a shrinking market share compared to competitors that sell at a lower price like Selecta of RFM Corporation and Magnolia of San Miguel Pure Foods Co.
While shopping, Juan also looks for brands that he could trust. Nomura further explains that strong brand equity and scalable operations will be a modern firm’s competitive edge. According to a news article in Interaksyon, the modern Filipino firm should keep an eye on providing innovative shopping experience, creative marketing strategies, and attractive packaging and products which lure Filipinos. Nomura also predicted modern Filipino consumers to be more discerning and more brand-conscious****.
The confident and smart Filipino consumer serves as an opportunity for many foreigners who plan on tapping the Philippine consumer market. Nomura enumerated some internationally recognized names that might soon enter the market or expand current operations*****:
- STARBUCKS CORP. plans to add another 100 stores in the Philippines in the next four years
- DUNKIN’ BRANDS plans to open 50 stores in the next five years
- COLD-STONE CREAMERY may enter the Philippines and open 15 stores in the next five years beginning in mid-2013
- FAMILY MART plans to open an estimated 600 outlets in Indonesia and the Philippines via 50-50 joint venture between Ayala Land Inc. and Rustan’s Group
These are all good signs for the consumer goods industry in the Philippines. In the first place, the Philippines has always been a consumption-driven economy. So far so good for Juan whose increasing confidence coupled by his smarter decisions attract more and more foreigners and encourage local manufacturers to be more competitive, further ensuring higher income for the country.
* Dinglasan, Rouchelle. "Filipino middle class drives spending” Nielsen global survey | Economy | GMA News Online." GMANetwork.com.
<http://www.gmanetwork.com/news/story/318755/economy/business/filipino-middle-class-drives-spending-nielsen-global-survey> (accessed August
*** Poverty Reduction and Economic Management Unit. "Philippine Economic Update: Accelerating Reforms to Meet the Jobs Challenge." World
Bank. <www.worldbank.org/content/dam/Worldbank/document/EAP/Philippines/Philippine_Economic_Update_May2013.pdf> (accessed August 8,
**** Cuevas-Miel, Likha . "Filipino consumers becoming more discerning, more brand-conscious - Nomura." Interaksyon.com
<www.interaksyon.com/business/67712/filipino-consumers-becoming-more-discerning-more-brand-conscious---nomura> (accessed August 8, 2013).
***** News, GMA. "Nomura: Intl brands keen to ride on PHL boom - Yahoo! News Philippines." Yahoo! Philippines News.
<http://ph.news.yahoo.com/nomura-intl-brands-keen-ride-phl-boom-021029521.html> (accessed August 9, 2013).
(Taken from GMA News.com, Economy Section, July 23, 2013)
by: Emilio Antonio | Marcella Karaan | Julian Martinez | Ivy Zuniga