Spending growth in VisMin faster than entire Philippines
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.