MANILA,
Philippines – Local businesses are being
urged to step up their game as more foreign brands are expected to enter the
Philippine market in the coming years.
A
number of foreign companies participated at the Franchise Asia Philippines 2014
Expo to look for partners in the Philippines.
Out of
500 exhibitors, around 60 were franchise companies from US, UK, Korea, Japan,
Malaysia, Singapore, Taiwan and China.
"In
this expo we have an increase of 400 percent in terms of international
participation. Next year, I believe there will be another big influx of foreign
franchisees," Samie Lim, chairman emeritus of the Philippine Franchise
Association (PFA), told ABS-CBNnews.com at the sidelines of Asia’s biggest
franchise expo held at the SMX Center in Pasay.
Lim
cited the country’s young demographic as one of the reasons why the Philippines
is now “at the center of international attention.”
“We
have all these young people who are very cosmopolitan in taste, they want
something modern, something new, and they’re all English-speaking so it’s very
easy to communicate with them,” he said.
To keep
up with these foreign brands, Lim encouraged local franchises to enhance their
processes and improve their approach to branding.
“If you
do not upgrade your concept, if you do not re-do your brand up to international
standards, you may have problems in the future with your market share because
the foreign brands are really very strong,” said Lim.
“We are
very weak in branding, everybody still believes that branding is making a logo
or a tagline, that’s not it. Branding is everything that we are, it’s a
culture, so it’s a whole gamut of training of not only the top management but
every employee from the president down to the people in the frontline,” he
added.
Lim
also said that the Filipino business community should prepare to upgrade their
respective brands for the ASEAN integration in 2015.
“This
is the final buzzer for ASEAN integration. As you know, 2015 is it. This is the
last two minutes, so we are rallying the Filipino community to upgrade
themselves in preparation for all the foreign franchisees that are coming in,”
he said.
The
event was organized by PFA and is supported by the Department of Trade and
Industry (DTI), Philippine Retailers Association (PRA), Philippine Chamber of
Commerce and Industry (PCCI), GoNegosyo, the World Franchise Council (WFC) and
the Asia Pacific Franchise Confederation (APFC).
Asian brands
Most of
the brands that are looking for Philippine partners are from neighboring Asian
countries, particularly Singapore, Korea, and Japan.
A
Singapore-based franchise consulting company, Astreem Consulting, is bringing
in a number of big-named brands from Singapore to look for a master franchisee
in the Philippines.
“What
we are doing here in the Philippines is finding master franchisees for a lot of
Asian as well as American brands. Philippines is a fantastic market, that’s why
we are here,” said Astreem’s franchise director Abhishek Date.
Date
said among the brands looking for Philippine partners are pizza chain Pezzo,
Ramen Champion, and People Impact.
Pezzo,
which has a flagship store at ION Orchard in Singapore, is a small pizza chain
that operates on a kiosk basis.
“They
have a very unique business model, which operates on a kiosk basis but the
return on investment is within six months,” said Date.
Japan’s
Ramen Champion, on the other hand, is one of the largest ramen operations in
Singapore.
“It’s a
brilliant market for the Philippines because we bring authentic Japanese ramen
from various parts of Japan, so it’s not the ordinary ramen that you get
everyday,” said Date.
Hong
Kong’s People Impact offers IQ and EQ training for children.
According
to Date, Malaysian brand Morganfields is in the final stages of securing a
master franchisee in the Philippines.
Morganfields,
a restaurant specializing in slow cooked and smoked pork ribs, is looking to
open its first Philippine branch in about three to four months. It is planning
to open 10 branches in the Philippines.
“Philippines
has a very high acceptance of franchisers. For example, Singapore doesn’t have
a franchise law yet these brands do phenomenally well. That means in very tough
market conditions, these brands have survived and are successful, that’s why we
believe in the Philippines, they will even do better,” said Date.
The
cost of franchising for these brands average $150,000 to set up.
A
number of Korean brands are also searching for a Philippine partner, including
Lim’s Chicken, Korea’s first chicken franchise.
Lim’s
Chicken’s Nicky Lee said the brand wants to expand in the Philippines for a
simple reason: “Filipinos love chicken.”
Lim’s
fried chicken comes in original and spicy flavor and is cooked with red
ginseng. The master franchise of Lim’s Chicken costs $500,000.
Japanese
brands also joined the expo, including Japanese bakery Hattendo.
Ichiro
Fujita, president and chief executive of I. Fujita International Inc., said
Hattendo has chosen the Philippines as the first country for its expansion
outside Japan.
“The
president of Hattendo wanted to expand into Asia and we were wondering where to
start. We felt that the Philippine franchise show is one of the very successful
ones,” he said.
Hattendo,
known for its chilled cream bread, has 16 physical locations in Japan, and
around 60 kiosks in major department stores and train stations.
If it
sets up shop in the Philippines, Fujita said Hattendo will also target LRT and
MRT stations in Metro Manila.
Jon
Carlos Rodriguez
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated
in Singapore since 1994.
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