LOCAL retailers are encouraged to offer more premium items as a new strategy to get a bigger slice of the rising affluent consumer market — the new consumer class — in Cebu.
Stuart Jamieson, managing director of global marketing research firm AC Nielsen talked about how Cebu retailers can benefit from this strategy in last Wednesday’s general membership meeting and induction of officers and new members of the Philippine Retailers Association Cebu Chapter held at the Bayfront Hotel.
According to Jamieson there is a changing consumer market in the country fueled by the growing economy that has already reached the $3,000 GDP (gross domestic product) per capita level.
At this level, the population is seen as a viable market for premium products as people can readily afford to buy products that cost more.
Jamieson calls the trend premiunization.
“Premiumization is a consumer choice to spend a little bit more on a certain product than how much they usually do. Now people have a choice and they are looking to indulge and treat themselves,” he said.
He said there is a growing pie and changing tastes among consumers which they refer to as the “new consumer class.”
The new consumer class are those who spend $16 to $100 per day and is seen to grow by 5.4 percent, the highest growth in the pie compared to those in the capital class or those who spend over $100 per day (2.7 percent growth) and those who spend less than $16 per day (3.9 percent growth).
The middle class in the Philippines is poised to double by 2020 growing by 72 percent, second to Indonesia which will have 174 percent growth and outgrowing other countries like Thailand (39 percent), Malaysia (18 percent) and Singapore (10 percent).
He encouraged retailers to take advantage of the new trend as the target market continues to expand.
“By 2020, the middle class which we refer to as the new consumer class will account for 55 percent of the whole Philippine market,” he said.
He added that while the figures are encouraging, it is also best to focus on the mind-set rather than the class.
“The new consumers are demanding new things, services and they are willing to pay extra for that. These new consumers may be walking in your store for the first time because it is the first time that they have money to spend so you have to have people who will guide them and walk them through the experience,” he said.