Philippines among top 3 favorable markets for established brands
THE PHILIPPINES is among the top three most favorable markets for established consumer brands as traditional trade dominates the retail space, according to a report by Bain & Co.
In a report, the consultancy firm said Malaysia, India, and the Philippines were the top three most favorable markets for incumbent consumer product brands. Meanwhile, South Korea, Singapore, and China were most favorable for rising consumer brands.
“The trend could be linked to the channel dynamics across markets. For example, the thriving e-commerce sector and wellestablished networks of third-party suppliers are making countries like South Korea particularly conducive for emerging consumer brands’ growth,” said Jichul Kang, head of Bain’s consumer products practice in South Korea, in a statement.
“On the other hand, the dominance of traditional trade and relatively low penetration of e-commerce make countries like the Philippines more favorable markets for established brands,” Mr. Kang added.
In the Philippines, incumbent brands got a bigger market share in eight out of 23 consumer product goods (CPG) categories which are spirits, wine, bath and shower, oral care, confectionery, edible oils, laundry care, and bottled water.
Meanwhile, incumbent brands in the Philippines only lost in seven categories which are color cosmetics, fragrances, hair care, skincare, pet food, sweet biscuits, and drinking milk products, which Bain said still indicates incumbent brands’ dominance.
Market share of the remaining eight categories studied by Bain was stable or had little to no change as “the complex channel dynamics” in the Philippine market makes it challenging for new entrants to come in.
The report studied incumbent brands’ market share in 23 CPG categories from 2018 to 2022.
Traditional trade still dominates the retail market in the Philippines. Bain said traditional trade accounted for around 53% of the retail value across the 23 categories it studied in the Philippines, while retail e-commerce sales penetration is seen at 2%. —