Living by its two-pronged thrust, “Enabling Business, Empowering Consumers,” the Department of Trade and Industry (DTI) aims to put balance between engaging in business and protecting the rights and welfare of the consumers with the end view of achieving inclusive growth in the country.
In attaining this, the DTI established mechanisms that yield equal benefits, opportunities and protection for both business and consumers. Likewise, the department gained key partners in this endeavor and one of which is the Philippine Retailers Association (PRA).
DTI-PRA partnership
The partnership between the DTI and the PRA began in 1997.
Our 19-year longstanding cooperation humbly started with providing consumer education and training seminars for retailers.
Later on, we raised the bar by complementing business-engagement improvement with strengthening consumer protection through the DTI Bagwis Awards Program.
This gives due recognition to certified retail establishments that practice fair trade ethics and uphold the rights and welfare of consumers.
The PRA came into view when it became one of the DTI’s active partners in advocating for the said awards program, with some of its biggest members becoming our pioneer awardees.
To date, we have awarded over 4,000 retail establishments nationwide, which translates to same number of stores that have integrated consumer protection in their business operations in order to deliver safe, quality and reasonably priced products and services, and redress to the consuming public.
Retail industry support to MSME development
Having gained leverage in the industry, the PRA continued partnering with the DTI on endeavors geared toward the development of micro, small and medium enterprises (MSMEs). The association has been generous with its time, expertise and resources in teaching MSMEs on increasing profitability and venturing into e-commerce as a means to engaging prospective customers.
As the DTI continues to champion for the MSMEs, we encourage further participation from the retail industry through extending support in our initiatives, especially on the DTI-Go Negosyo partnership project, called Kapatid. This is an initiative that encourages medium and large corporations, or the big brothers of the industry, to assist the micro and small enterprises (MSEs), or the younger siblings, through the use of inclusive and innovative business models.
The idea is for medium and large corporations to partner with MSEs to become part of their value chain. MSEs will become the supplier of goods and services needed by medium and large corporations in sustaining their operations. But how will the MSEs meet the requirements of medium and large corporations?
This is where mentorship kicks in.
Under the Kapatid project is a program called “Mentor Me,” in which MSEs are capacitated through trainings and linkages to financing and marketing. MSEs will be having sessions with business leaders and experienced entrepreneurs to learn the ways and means to get into the industry. Kapatid will allow MSEs to gain market access and become part of the value chain that is dominated by medium and large corporations. We are launching through the DTI Negosyo Centers in the regions and provinces to roll out this project nationwide.
In summary, the DTI is guided by the 7M’s: mind-set or having entrepreneurial attitude; mastery on entrepreneurship; mentor access to managerial and technical requirements; market access and linkage to medium and large corporations; money access through microfinancing; machinery for quality and sustainable production; and models of sustainable, innovative and inclusive business. The DTI has been working to put in place mechanisms that would ensure the industry’s access to these 7M’s and create opportunities for growth and expansion in the midst of market integration.
The PRA, being the pulse and voice of the Philippine retail industry, exudes these 7M’s that we are treading on. However, this is just one side of the entire spectrum. We should not overlook that at the end of the value chain are those that we must all satisfy, the consumers.
Consumer-driven economy
IN the first quarter of this year, consumer expenditure grew by 7.01 percent, which comprises 69.81 percent of the total expenditures of the country and translates to about P1.3 billion pesos of our GDP. This figure evidently reflects how consumers drive our economy to become robust and progressive.
According to the Nielsen Global Survey of Consumer Confidence and Spending Intentions, the Philippines’s consumer confidence for the second quarter of 2016 has reached 132, which is the biggest quarter-on-quarter surge of a country for this year. Our country also has the highest consumer confidence among 63 surveyed countries, leading India (128), Indonesia (119), the United States (113) and Denmark (112).
Filipino consumers are increasingly saving, with 65 percent keeping their spare cash and spending it in the future for holidays and vacations (33 percent), home improvements and decorations (32 percent), new clothes (30 percent) and new technology (29 percent).
Retail trade is reaping much from our consumer-driven economy. In the first quarter of 2016 alone, the Philippines already reaped P225.4 billion worth in retail trade output. Retail trade output has been growing at an average growth rate of 6.1 percent, and it has maintained an average share of 13.3 percent to GDP from 2010 to 2015.
Preserving the brand and being consistent in the make and delivery of your goods and services is an admirable quality of a successful business. However, complacency is what hampers growth.
Consumer behavior and demands are ever-changing. It is vital that you listen to the needs of the consumers being one of the primary reasons why the industry remains to exist and flourish.
KMC MAC Group reports that the retail industry will represent 1/5 of the country’s economic output in 10 years.
Retailers also need to tap the immense opportunities provided by the Asean market. DBS Research Group reports that the Asean middle class—a segment with diversifying tastes, growing awareness on food, personal and technology security, and largely composed of millennials—is expected to double to up to 500 million in 2020. With a compounded annual growth rate of 4 percent to 28 percent and a penetration rate of less than 50 percent, there is still much room for growth of modern retailing in the Asean region.
Retailers can also take advantage of diversifying and innovating your business models based on growing trends on luxury retail (driven by international tourism), e-commerce, inclusion of retail stores in real estate development and the value-based consumption preferences of millennials. The retail sector should take advantage of these trends by being innovative in its offerings and ensuring its sustainability and presence in the market value chain. In the end, customer satisfaction remains to be one of the best indicators in ensuring the growth and longevity of the industry because keeping customers as our first priority ensures customer loyalty.
Closing: Progress toward an inclusive and thriving economy
For the DTI, it is essential for your industry to achieve the same balance that we advocate for by creating innovative and profit-yielding business schemes that gain the trust and loyalty of consumers. Together, let us work collaboratively in raising the standards of doing business in the country and in achieving the ideal state of consumer protection.
As one, let us propel the Philippines toward a dynamic, inclusive and thriving economy.
Thank you very much and mabuhay!