Blog 25 Jun 2019 Updated 26 Nov 2019 The Philippines Young, discerning and with disposable income to spare: A quick 101 to the Filipino consumer economy Share: Singapore companies looking to expand their regional footprint should look towards ASEAN’s second largest consumer economy. Here are four reasons why. The Philippines is a significant contributor of growth in ASEAN – a feat in itself when we’re talking about a region on track to become the world’s fourth largest economy by 2030. If you’re a startup looking to break into ASEAN, here’s 5 tips to help you start your journey! With a population of over 100 million people, it’s the second largest consumer market in Southeast Asia, and has posted over 6 percent of healthy economic growth in the past few years. But numbers aside, there’s plenty to like about the Philippines, a country fast emerging as the market of choice for many Singapore businesses looking to regionalise. Here’s why. 1. A young and discerning working class The Philippines has a young working class – the median age of the country’s population is 24.3. The number of young professionals and dual income families are on the rise, so there are now more Filipinos willing to spend on luxury items or products of value. This explains the uptake of premium store formats, specialty supermarkets and stores carrying imported brands. Singapore brand Saladstop! attributes their success in part to this very trend. In line with the global millennial trend towards Insta-worthy diets, health establishments and exercise regimes, Filipinos are increasingly health-conscious and willing to spend – particularly more so on F&B, retail and services like gym memberships. Working Filipinos are also keen on convenience and this has fuelled the rise of food delivery services and mobile apps. Tech-savvy retail and F&B businesses with innovative solutions that meet the demands of this market will likely find keen early-adopters among locals who are willing to pay more for new or premium products. 2. No language barrier English is the lingua franca in the Philippines. As the third largest English-speaking country in the world, Singapore businesses need not rely on a translator to network, form collaborations, or conduct business transactions. This makes it relatively straightforward to draw up contracts and market products. It is also much easier to build rapport with local partners and find end-to-end solutions. 3. Strong mall culture A reprieve from the oft-sweltering tropical weather and decked out with creature comforts like Wi-Fi and communal seating areas, the traditional shopping mall is part-and-parcel of the Filipino lifestyle. Some church services are also held in malls, which draw the Christian majority in the Philippines. The average mass mall sees about 400,000 people each day – a noteworthy trend that bucks the growing movement towards e-commerce. Even premium malls (which court a more exclusive type of shopper) clock in a daily footfall of around 40,000. In either case, depending on the target markets and scale of your business, malls can be a good catchment point for customers, especially when it comes to brick-and-mortar businesses. 4. Internet savvy population According to Primer International Management Ltd, which manages a range of in-market retail brands, people in the Philippines spend over 10 hours on the Internet each day. This is in contrast to the global average of 6 hours and 42 minutes. Filipinos also spend an above average amount of time on social media. Businesses who rely on digital marketing to spread awareness of their brand will find themselves at an advantage when it comes to building their reach and cutting cost. It’s also good to note that out-of-home or storefront advertising may not be quite as effective. Due to traffic congestion in Metro Manila, locals don’t travel very far from work or home; therefore physical placements would cost more to fabricate and yet may not reach many unique eyeballs. The Philippines’ young and discerning population drives home the fact that every market comes with its own characteristics and challenges. Singapore businesses who can adapt to market demand will find the economy ripe for investment and tech-savvy consumers willing to spend. Still, venturing abroad comes with its own challenges. Business owners looking to enter the Philippines can tap Enterprise Singapore’s Plug and Play Network, our network of in-market partners that fast-track your entry into foreign markets. The network gives Singapore businesses a helping hand in market advisory, business matching and legal advice in foreign markets. Just for example, businesses that aren’t ready to commit to a traditional office space can enjoy discounted rates at co-working spaces. There’s also a range of schemes targeted at bringing you closer to your goals of capturing an overseas market, be it the Philippines or beyond. Find out how we can work together to grow your business overseas.