Survey shows rising interest in property, logistics among CEOs
Cebu’s business owners see themselves investing in Cebu’s real estate and construction industry, tourism, and food manufacturing over the next three years, a recent survey showed.
PwC Philippines chair Alexander Cabrera and assurance partner Aldie Garcia presented the results of their first Cebu CEO Survey last Friday, June 30, in the Marco Polo Plaza Hotel.
Among their findings was that 33 percent of fourth generation family businesses would like to venture into real estate and construction in the next three years. In addition, 33 percent said they were interested to expand into logistics, and 17 percent said going into technology-related business is the way to go.
Respondents who belonged to the first to third generations of family businesses, who composed roughly 90 percent of the respondents, also cited real estate and construction among the top three sectors they would like to do business in. Tourism, consumer retail, and food manufacturing rounded up the list.
Tycoons
The Cebu CEO survey “Great Expectations: The Rise of the Next Generation Cebu Business Leaders” was participated in by 102 micro, small, and medium enterprise (MSMEs) as well as large companies.
“Cebu is a melting pot for business tycoons (Aboitiz, Gokongwei, Gotianuy) who started as smaller family businesses to (become) national conglomerates. This report, however, focuses on Cebu’s next generation leaders across industries,” said PwC.
Among those who participated in the survey were Bunny Pages of Pages Holdings; Melanie Ng of the Ng Khai Group, who is also president of the Cebu Chamber of Commerce and Industry (CCCI); Robert Go of Prince Retail, Leonora Salvane of GT Cosmetics, Wesley Chiongbian of Mynimo, Pedro Delantar Jr. of Nature’s Legacy, Beverly Dayanan of Contempo Property Holdings, Steve Benitez of Bo’s Coffee, Anya Lim of Anthill Fabric Gallery, and Aljew Frasco of Titay’s Rosquillos.
The same report also highlighted the roots of the local CEOs. The survey found out that 44 percent of them traced their roots outside Cebu. Of them, 83 percent cited trade opportunities as the top reason for moving to and living in Cebu.
Majority of Cebu CEOs started their business in trading. Now, CEOs have diverse business interests from manufacturing (17 percent), retail and wholesale distribution (15 percent), consumer food and beverage (14 percent), agribusiness (eight percent), and real estate and construction (eight percent).
Brand loyalty
In addition, 51 percent of Cebu businesses have already expanded outside Cebu, with most of them tapping Mindanao and neighboring provinces to grow the business.
Meanwhile, 16 percent of them have established their presence in other countries, including the United Arab Emirates, Qatar, Bahrain, Singapore, Japan, and Australia.
While the CEOs attribute their business success to the Cebu market, most of them said local consumers can also be very discerning.
“Even with the entry of different foreign brands and formats into the local market, there is a
considerable degree of brand loyalty from consumers as Cebuanos place high regard on quality, price, and consumer experience,” said PwC, quoting the CEOs.
Technological change was not the main concern among local business owners.
Less than half, or 48 percent of Cebu’s CEOs, identified the speed of technological change as a top threat, and only 35 percent believe that technology should be prioritized in Cebu.
Transformation
“This is clearly a concern especially for traditional businesses, as failure to adapt or keep up with technological changes may result in a decline in market share as well as negative impact on staff productivity, customer service and engagement, and cyber-security,” said PwC.
“Such findings are in contrast to the 2015 Philippine CEO survey where 80 percent of the CEOs said technological advances would help transform their business,” it added.
In addition, the Cebu CEOs regard infrastructure as the top industry need (81 percent), tourism development (63 percent), and technology with 35 percent.
Central Visayas, where Cebu is the regional center, registered a gross regional domestic product of P966.9 billion in 2016, and grew at a compounded annual rate of 9.4 percent from 2013 to 2016, said PwC.
The Cebu CEOs have identified the entry of foreign companies especially in business outsourcing, surge in real estate and hotel developments, and increase in infrastructure projects as major developments that drove Cebu in the past 20 years.
“There’s a lot of optimism in our first Cebu CEO survey. Our respondents are confident, experienced, and have big ambitions. Their vision of the ‘New Cebu’ is vibrant and progressive. But many of the old challenges remain. Infrastructure development must be enhanced to ensure that Cebu keeps its standing as commercial and industrial powerhouse,” it concluded.