Foreign brands biting

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Friday, August 29, 2014

IF THERE is one sector most vulnerable to the influx of foreign brands and the full integration of Southeast Asian economies, it is food, said an official of the Philippine Franchise Association (PFA).

In an interview last Thursday, PFA vice chairman Bing Sibal Limjoco called on local food companies to strengthen their brands in order stand out from the competition.

Limjoco visited Cebu to take part in a franchise expo in the J Center Mall, one of the Mandue Business Month activities of the Mandaue Chamber of Commerce and Industry.


“Be consistent in growing your brands,” she said, addressing local businesses.

Of the 300 PFA member-companies to date, 43 percent is involved in the food franchising business.

The second most vulnerable group, she said, are apparel brands, which are also facing tough competition from foreign brands.

What a Girl Wants part owner and manager Diane Ang, in a separate interview, said the homegrown store will be closing by the end of this year. Reasons for the closure include the high overhead cost of mall operations, competition with top global brands that have penetrated Cebu in the past few years, and the trend of online purchasing.

WAGW items will maintain an online presence for “a period of time,” she said.

“Retail is now a sunset industry….The trend now is digital… in online shopping,” Ang added. Aside from its convenience to buyers, online selling also offers lower operational costs on the part of sellers.

Sales generated in online transactions and in WAGW stores are comparable, she added, without citing figures.

WAGW has been around for 10 years with seven branches in the cities of Cebu, Bacolod, Cagayan de Oro and Davao.

Ang added that there are plans to reopen WAGW, carrying not only clothing but also other necessities.

However, despite the competition, some local brands have remained, said Limjoco, citing as examples Bench and homegrown brand Penshoppe, which have expanded outside the Philippines.

Strong brands

As for food, Limjoco noted that some notable Cebuano businesses have already created strong brands like Bo’s Coffee, Tablea, Dimsum Break and Mr. Potato, among others.

Generally, Limjoco said, businesses using the franchising model succeed, recording over 90 percent success rate.

Asked if the country’s franchising industry is ready for the integration of Southeast Asian economies in 2015, she said it is, in part because the franchise model is built for expansion.

The Philippines, she added, also positions itself as a hub for franchising in Asia.

PFA chairman emeritus Sammie Lim earlier said the franchising industry continues to grow 20 to 25 percent per year. National brands account for two-thirds of the total franchise industry, while the international brands account for one-third.

Published in the Sun.Star Cebu newspaper on August 30, 2014.


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