E-commerce growth expected to drive more brick-and-mortar businesses to the Philippines

EXPECT more global brands to find their way to Philippine shores, as traditional brickand-mortar stores struggle in more advanced economies because of the growth of e-commerce.

At the Philippine Retail Summit 2018 in Taguig City on Thursday, Trade Undersecre- tary Zenaida C. Maglaya said foreign retailers will set up shop in the Philippines at an accelerated pace, buoyed by the country’s young demographics and rising disposable income.

“Online marketing may be growing very fast in other countries, but in our case it is more of the touch and feel. That is the kind of culture and psyche we have here,” Ms. Maglaya said.

A record number of brick-and-mortar stores shut down in the United States last year because of changing consumer habits, marked by increas-

ing preference for online shopping and fewer trips to the mall.

Online purchases in the Philippines account for less than one percent of total retail sales, the lowest among the six major markets in Southeast Asia, according to a report by market research firm eMarketer.

“If they lose there, they are looking for areas where they can come in which has penchant for shopping and not online,” Ms. Maglaya explained.

While the influx of foreign brands is nothing new, more of them will enter the domestic market without a local partner - a practice started by Swedish fashion retailer H&M when it entered the Philippine retail scene, Retail Associates Corp. President and Chief Executive Officer Bo Lundqvist said.

“With the sustained economic fabric, you’ll see more foreign retail brands in Philippines. This trend will reshape the retail industry and push the quality of service to global standards,” Mr. Lundqvist said.

The Philippines boasts one of the youngest labor markets in Asia and the Pacific.

Consumer spending accounts for about two-thirds of the economy, which is one of the fastestgrowing in Asia.

Another Swedish company, furniture- maker IKEA, is set to enter the Philippine market with the promise of delivering low-priced quality products. “We love you that’s why we’re coming. Hopefully, you love us, too,” Georg Platzer, market development manager at IKEA, without elaborating on the company’s plans.

In the same forum, Senator Juan Miguel F. Zubiri announced that President Rodrigo R. Duterte is set to sign next week a law that will streamline processes in starting and operating businesses.

The proposed Expanded AntiRed Tape Act will set document processing time at a maximum of three working days for simple transactions, seven days for complex transactions and 20 days for highly technical transactions, said Mr. Zubiri, who chairs the Senate trade, commerce and entrepreneurship committee.

An application will be “deemed approved” if a government office fails to act on the application within the prescribed processing period.

“This law is not just for Filipinos,” Mr. Zubiri said.

“It is applicable to foreign brands coming in. It is easier for them to do business here.”