Export Opportunities to the Philippines
With Austrade & SM Retail
Earlier this year we were fortunate to have Pascale Vermeerbergen Jimenez (Senior Vice President Business Development, SM Retail) and Tina Sendin (Business Development Manager, Manilla at Austrade) give presentations on the opportunities for Australian Fashion Brands in the Philippines market. Tina has kindly provided the following market overview.
fashion to the philippines | TRENDS & OPPORTUNITIES
The Philippines remains a bright spot in the region and is expected to continue to outpace the economic growth of its ASEAN neighbours in 2016. The country ranks highly on key retail market indicators vis-à-vis other global markets:
- The Philippines has the highest household spending as a percent of GDP in East Asia, compared to other emerging markets such as Indonesia, Thailand, Malaysia, China and Singapore (source: Oxford Business Group)
- 26% of global retailers consider the Philippines as one of the top-10 target markets in the region (source: CBRE)
- The Philippine market is seen as one of the thriving markets in the region, especially with its consumer-driven economy driven by a growing young population, who are mostly in the labour force.
The retail landscape has experienced an unprecedented hike, stimulated by the rise of the middle class and income levels. The demand for quality imported products is driven in particular by the country’s young and upwardly mobile population, who continue to be influenced by western trends.
Filipinos love shopping and the mall lifestyle is deeply ingrained in their culture. The Philippines has four of the biggest malls in the world, thanks to the largest local mall chain developer, SM Retail.
200 foreign brands entered the Philippines in the past seven years. 2014 has seen the influx of foreign brands such as fast fashion brands such as H&M, Old Navy and UK-based Reiss, and more international brands continue to fill local malls.
Sustained demand and renewed interest from new and existing foreign retailers are expected to remain. This is evident in the growing number of partnerships between local distributors and foreign brands; majority of committed spaces within newly completed shopping malls are for foreign brands; and international retailers replacing older tenants in select existing shopping malls.
The total retail sales as of 2015 is AUD 928 billion (source: SM Retail Inc, Retail Environment in the Philippines Today, September 2016).
Australian fashion brands in the Philippines
Australian fashion labels have found a niche in the Philippines with several brands active in the market. Australian fashion used to be synonymous to just swimwear. However, over the past years, Australia has steadily gained recognition in the market as a supplier of trendy, unique, high quality and affordable street clothes and party wear as well as fashion swimwear. Australia's international acceptance in the global fashion market and the endorsement of celebrity and fashion icons of Australian fashion brands has help boost Australia's image in the Philippines.
Some Australian fashion brands found in the market include:
- (For)Ever New, Cotton On Group brands such as Cotton On, Factorie, Typo
- Surf and active sports: Quiksilver, Roxy, Tigerlily, Seafolly, Rip Curl
- Premium to luxury: Cameo, Maurie & Eve, Nicola Finetti, Love Honor, Finders Keepers, Nobody Denim, Keepsake The Label, Ixiah, The Fifth Label
- Footwear: Holster
Apparel and accessories are the most dynamic and competitive product segments in the fashion retail sector. Highlighting Unique Selling Proposition (USP) is key.
While demand for surf/swim wear and street clothes continue to strengthen, we are seeing opportunities emerge in men’s street wear and children’s wear, both swim and street clothes. Interest in concept stores is also increasing because of the success of concept stores such as Zara (Spain), Top Shop (UK), among others.
Not a lot of brands fall in the category between the premium and luxury range and this is an opportunity for Australian brands to cater to upper middle income to high income groups who are looking for style, quality, and distinctiveness.