The Philippine Retailers Association (PRA) projected retail sales to reach P1.61 trillion by 2016 and P1.78 trillion by 2017. A report by Oxford Business Group said, “Retail in the Philippines set to soar and spread.”
In a recent Asia Pacific research of CBRE, one of the trends that shape logistics in the region is the increasing expansion of organized retail — networks of retail outlets that require extensive supply chain and inventory management systems.
Simultaneously, global brands are encouraged to maximize the opportunity to increase private consumption by improving their presence in the market.
Among Asia Pacific countries, this phenomenon is most evident in the Philippines, where retailers are exploring opportunities in the country’s active retail market, fueled by an increase in the population’s disposable income.
Not surprisingly, this upsurge in consumer spending is continuously propelled by remittances from overseas Filipino workers, one of the country’s top exports.
As the retail sector expands, logistics is seen to play a key role in supporting operational demands. Moreover, dynamic changes in retail requirements are expected to put pressure on global retailers who want to expand in developing economies, coping with the challenges of high-demand retailing in new environments.
Demand for improved end-to-end integrated logistics and speed-to-market will be critical to the rise in retail presence.
As such, the Philippines should lay the logistic grounds for investors to come in. Improving infrastructure via PPP (private-public partnership) projects to further support the foundations of logistic conditions is one way to achieve this.
“The Philippines’ resilient economic status and the ongoing PPP developments of the government set the stage for global retailers to expand in the country. These factors will encourage investors to take into consideration the opportunities in the Philippines that would benefit their transactions,” explained Rick Santos, chairman, CEO, and founder of CBRE Philippines.
Several PPP projects in the pipeline include the Daang Hari-SLEX Link Road, NAIA Expressway (Phase II) project, LRT 1 Cavite Extension, Operation and maintenance, and other improvements in a number of the country’s airports, seaports, and roads.
As infrastructure projects roll out, retail investors will have a better platform for convenient management and transactions.
Other trends that affect logistics are growing online user bases and sales volumes of e-commerce across the region, and expanding the presence of third-party logistics (3PLs).
Originally posted in CBRE Philippines
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