Spend­ing growth in VisMin faster than en­tire Philip­pines

The Freeman - - BUSINESS -

Spend­ing growth of house­holds in Visayas and Min­danao has sur­passed the av­er­age growth rate of Lu­zon and the en­tire Philip­pines, ac­cord­ing to a world leader in con­sumer knowl­edge and in­sights through con­sumer pan­els.

Kan­tar World­panel Ac­count Di­rec­tor Ruth Sa­zon said in a brief­ing on Thurs­day that growth of spend­ing among house­holds in Visayas and Min­danao from 2014 to 2016 was at 5.2 per­cent, faster than the av­er­age rate for Lu­zon at 3.9 per­cent and for the Philip­pines at 4.4 per­cent.

Sa­zon noted that this means Visayas and Min­danao re­gions are key ar­eas for fast mov­ing con­sumer goods (FMCG).

The re­gions’ growth rates in FMCG such as food, bev­er­age, per­sonal care, and house­hold care also grew faster than Lu­zon.

In Visayas and Min­danao, growth in food sec­tor is at 4.7 per­cent, bev­er­age at 4.6 per­cent, per­sonal care at 7.2 per­cent, and house­hold care at 5.9 per­cent.

In Lu­zon, the growth rates are 2.0 per­cent in food sec­tor, 2.3 per­cent for bev­er­age, 7.4 per­cent for per­sonal care, and 5.8 per­cent for house­hold care.

Sa­zon said there was huge op­por­tu­nity for FMCG com­pa­nies in the cen­tral and south­ern Philip­pines with the re­gions’ growth in spend­ing and de­mo­graph­ics.

Visayas and Min­danao ac­counted for more than half of the Philip­pines’ land­mass with 42 per­cent of the coun­try’s house­hold are in these re­gions.

“Brands have a ten­dency to fo­cus on the spend­ing power in Lu­zon, par­tic­u­larly in Metro Manila. How­ever, our data shows that brands should not set aside the many op­por­tu­ni­ties that Visayas and Min­danao of­fer,” the Kan­tar ex­ec­u­tive stressed.

For FMCG com­pa­nies to un­der­stand the Visayas and Min­danao mar­ket, most of the re­gions’ pop­u­la­tion be­longs to the so­cioe­co­nomic Class E.

“The con­sumers in Visayas and Min­danao are looking for value of money, more eco­nom­i­cal price size,” said Sa­zon.

Lo­cal com­pa­nies are win­ning the Visayas and Min­danao mar­ket over multi­na­tional firms.

Among the top FMCG in Visayas and Min­danao are cof­fee pow­der, snacks, bis­cuits, sham­poo, and cook­ing oil.

FMCG such as ce­real bev­er­age, bread­ing mix, break­fast ce­real, oys­ter sauce, scour­ing pads, tooth­brush, yo­ghurt drink, dish­wash­ing soap, ready-to-drink milk, and pow­dered tea have the fastest growth among cat­e­gories, but with mar­ket pen­e­tra­tion of less than 25 per­cent.

“With more in­dus­tries open­ing up in Visayas and Min­danao we ex­pect them to have a lit­tle bit more money now as their econ­omy im­proves,” added Sa­zon.

She men­tioned that the growth in spend­ing in these re­gions is also sus­tain­able with the Duterte ad­min­is­tra­tion’s push to pro­mote de­vel­op­ment in ru­ral ar­eas.

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