WHILE foreign businesses pursue eased entry and expansion in the country, Filipino retailers must remain competitive by leveraging their unique strengths and deep understanding of the local market, according to industry experts.

“They have the advantage of being a first mover — of already being in place when these foreign companies enter the market in the Philippines,” Paul A. Santos, chairman of the Philippine Retailers Association (PRA), said in an interview.

Mr. Santos also noted that foreign businesses possess the advantage of confidence and preparedness to operate outside their comfort zones.

“Local retailers should prioritize enhancing the customer experience and creating a memorable shopping environment,” said Rosemarie B. Ong, president of the PRA, in a Viber message to BusinessWorld.

“Offering unique products and experiences that differentiate them from foreign competitors is crucial,” she added.

Ms. Ong said that this can be done through marketing local identity and heritage which fosters consumer loyalty, alongside building strong partnerships with local suppliers.

 Streamlining operations and adapting to evolving consumer preferences by embracing technology, such as e-commerce platforms and mobile apps, are essential for local retailers to stay on par with their foreign counterparts, she noted.

“Philippine retailers will need to adopt more and more omnichannel techniques to compete effectively this year and in the years to come,” stated Mr. Santos. “It’s the Holy Grail of retail operations.”

“Staying agile, investing in employee development, utilizing data analytics, engaging with the local community, and continuously improving,” Ms. Ong advised on tips for ensuring long-term competitiveness for local retailers.

In December 2021, the Retail Trade Liberalization Act of 2000 was amended through Republic Act (RA) 11595, which aimed to ease the requirements for foreign retailers to enter the domestic market. The amendment came into effect in January of last year.

According to RA 11595, foreign retailers now only need $446,000 in investments, a significant reduction from the previous requirement of $2.5 million.

“On the change, it has not yet actually happened,” Mr. Santos said on the retail landscape in the country. “What we’re currently witnessing is existing foreign retailers already doing business in the Philippines expanding their presence.”

“But based on my knowledge, this plan was already in place long before the epidemic, and it was simply postponed.”

Challenges such as the ongoing pandemic, logistical constraints, and market dynamics have hindered the entry of new players.

“This may now make the Philippines attractive to small- and medium-scale foreign retailers (SMEs),” he noted, interestingly highlighting that the law has not been able to drive a significant influx of new foreign players.

To gain a better understanding of the potential timeline, Ms. Ong emphasized the importance of continuously monitoring market trends and evaluating the preparedness of foreign retailers to enter the market.

“By closely observing these factors, local retailers can proactively adjust their strategies, enhance competitiveness, and seize opportunities that arise from the evolving market dynamics,” she said. — Miguel Hanz L. Antivola