Philippine franchise operators and the government need to explore ways of bringing homegrown brands to other economies in the Association of Southeast Asian Nation (ASEAN) and take advantage of the spending power that continues to rise in the 10-nation bloc.
“ASEAN nations are becoming more prosperous as evidenced by rising per capita consumption of services,” George Manzano, vice dean at University of Asia and the Pacific School of Economics, said on Monday at the Philippine Franchise Association's (PFA) APEC-GOS Symposium-Workshop on International Franchising for SMEs.
Manzano said the Philippines has a competitive edge over the services business—like spa and wellness chains, marketing, and health care.
“This is our most competitive area, and we've grown this sector a lot here,” he said.
Such business are more likely to withstand increased competition from the ASEAN single-market integration in 2015, Manzano noted.
The ASEAN Economic Community is creating regional market and distribution base by 2015. This, experts say, creates both risks and opportunities for Philippine franchise companies.
Andrew Terry, professor of Business Regulation at the University of Sydney Business School, said a single-market ASEAN “serves as an opportunity for local brands to build regional scale before global expansion.”
But local franchise brands must improve on strategic thinking and planning, financial and development models before tackling regional markets.
Samie Lim, PFA chairman emeritus and the “Father of Philippine Franchising,” said Philippine companies need to shape up as the ASEAN community also mean a wider space for foreign brands in the local and regional markets.
“Most franchising firms are already strong locally, but not everyone is competitive on a global scale,” Lim said.
Local brands that have gone global are Tony Tan Caktiong's Jollibee, French fries kiosk Potato Corner, and fashion retailers Suyen Corp. which owns the Bench brand and Golden ABC's Penshoppe.
Lim also pointed Philippine companies to demand for government support in terms of financial aid for participating in expositions and trade fairs and going head-to-head with foreign brands overseas.
Manzano noted the government should also create policies aimed at reducing barriers on companies going regional and lowering the cost of such ventures.
For businesses eyeing global markets, Manzano adivices: “Anticipate the threats and opportunities, study the investment climate overseas and work closer with the government.” — VS, GMA News