The FMCG market in the Philippines was sluggish until 2014, before making quite a recovery that continued into 2016 and beyond. There was a 7% growth in FMCG in 2016, and it was homogenous across all categories – food, beverage, personal care, and household care. There is also growth in all parts of the Philippines, with FMCG growth in the regions ranging from 3-10%. While Visayas and Mindanao are growing faster across all categories, Philippines as a whole is a market with lots of opportunities for growth.
There is a rise of local players in Asia. Our Kantar Worldpanel Brand Footprint shows local players gaining successful momentum, and the Philippines is no exception. Local players are winning in categories such as coffee, hotdogs, and pasta. Beyond the food category, you can see a rise of local players in household products such as fabric softeners and dishwashing liquid.
Local recipes are essential in the Philippines. Global recipes are good for manufacturers who want to deploy a larger strategy with common benefits and consistent marketing campaigns and communications. However, it is a reality that local players are becoming more agile and are quicker to understand local needs. They are able to quickly launch products that cater to the needs of consumers. It’s their ability to act fast. There is also a lot of pride in the nation, where people want to consume products from their nation, especially if their needs and expectations are better met.
Who is the Filipino consumer?
Similar to the rest of the world, consumers from the Philippines are becoming more tech-savvy and connected. There are two kinds of consumers in this market – the lower half of the pyramid that represents 85% of the population based on socioeconomic status, and the top 15%. The former group of consumers here can see what’s happening in the world, and they look for products that are priced sensibly but with added benefits. This lower economic class is now looking at better quality products, even if price remains a key factor. In the latter group, consumers are looking for premiumisation. Despite differences in spending power, both groups of consumers are looking for better quality and added value.
Appeal with size
While Filipino consumers remain price conscious, working with pack sizes can help appeal to the market. The mindset is, “If I want a better product, I will have to reduce the quantity of what I’m buying each time to be able to afford a product with additional benefit.” And this is what we are seeing here. Consumers have more money at hand and are more inclined at buying better products, but remain attracted to smaller packs. While small packs may not necessarily be the most value for money in terms of price per kilogram, they appeal because of their affordability.
There are three common trends in Asia: health, convenience, and individualised needs. Consumers are becoming more health-conscious and are looking for convenient purchases. There is also a greater emergence of new and individualised categories such as men’s care and baby-specific needs.
Premiumisation is growing in prominence, but affordability and smaller packaging remain key to attracting the Filipino consumer.
Source : Kantar Worldpanel Philippines