Planned new retail industry rules will open opportunities, create jobs

By Irma Isip, Malaya Business Insight, November 06, 2017

Filipino retailers have nothing to fear of the further opening up of the retail industry as this would open opportunities for local entrepreneurs and would create jobs.

Joey Concepcion, presidential adviser on entrepreneurship, told reporters the planned lowering to $200,000 the minimum capitalization for foreigners to be able to own 100-percent retail operations in the Philippines will pave the way for the entry of players which will seek partners either through joint venture or franchise.

“To me it provides opportunities. If they (retailers) come to Manila, will they own every little store? So there will be more competition in franchising concepts. There will be more players to come in.

But this will help people,” Concepcion said. 

“I told (the franchise industry they need not be scared,” he said. 

He said it would be too risky in terms of labor if foreign retailers own and operate all the stores.

Why did Jollibee franchise when they can easily afford. You are better off franchising it, you have to get entrepreneurs,” he said.

“It’s the same thing when a (Filipino company) goes abroad. What does Potato Corner do? They do it by franchiae or joint venture. It’s too risky… they dont know the terrain, they don’t know where to go,” Concepcion said. 

Concepcion cited his own businesses as example. 

He said for cart business like his Kettle Corn, “it would be very hard (for a foreign retailer) to operate a mass-based type cart of operation.”

“When Unilever came in why did they partner with me (Selecta) when they could have put up their own store?

They partnered with Selecta (because) they needed a local partner,” Concepcion said. 

Mall giant SM also favors the further liberalization of retail trade in the country saying local firms can hold their own as they know the market better.

“If you can’t beat them, join them,” said Tessie Sy-Coson, vice chair of SM Investments Corp.

Coson said players like SM know what the consumer wants and can compete with foreign retailers.

In a digital economy and a shared economy such as in Asean, Coson sees the need to encourage entry of more players into the market. “It’s different now.”

She said foreign retailers will partner with local companies and would in turn hire Filipinos on their own, which would be a positive for the economy

“In the future you need to have more restos…It will become more of an entertainment center,” Coson said, Coson believes opening retail trade will bring in more foreign direct investments even in small amounts.

“It depends upon how the country will see what is small…or how legislators will see it for big ones like us if we can’t beat them join them,” she said.

But Coson said to stay competitive in business not just in retail, the government has to address red tape “we should make business process with regulators much easier… that will help a lot of Filipino businesses,” she said.

 

 

This article is copied from Malaya Business Insight as published in the newspaper on November 6, 2017 and is available online at http://www.malaya.com.ph/business-news/business/planned-new-retail-industry-rules-will-open-opportunities-create-jobs



Tags: PFA news, retail trade liberization, ,
Date: November 6, 2017