Thursday, October 02, 2008 China products ‘scare’ sends fewer people to downtown shops By Elisabeth P. Baumgart Sun.Star Correspondent With Charmaine Y. Rodriguez
THE colorful stores along the streets of downtown Cebu City are seeing fewer shoppers these days.
“Most of our products in the downtown area are imported. And now with the milk scare, a lot of people have raised doubts on quality control and whether they can trust China’s products,” said Joni Chan, president of the Manalili, Lincoln and Progreso Business Association.
“Admittedly, business has been bad. People these days would rather focus on the basic necessities, like food and shelter. They are no longer into the luxury items, home improvement items, general merchandise items and accessories,” said Chan.
While store owners already feel the crunch, he expects the situation to worsen when the effects of the US financial crisis trickle down.
“Right now, we are not directly affected, but eventually we will feel the effects,” said Chan.
Buying power
The US is one of the Philippines’ top two buyers of export products, so workers in export companies are bound to feel the pain if spooked American consumers spend less.
“And of course, workers of the exporters have a lot of buying power,” added Chan.
“All of us are cautious. Definitely it (US financial crisis) will slow down business,” said Filipino-Chinese Chamber of Commerce president Filomeno Lim, who heads a group of about 400 to 500 businesses in Cebu.
To cope with the difficulties, most of their members are taking precautionary measures by stalling or limiting expansion projects.
He believes exporters could recover with the increase in the value of the dollar, especially if they have clients in “alternative” markets, like Europe.
But the manufacturing industry will expect another problem apart from the increase in the prices of oil and raw materials: banks are expected to impose stricter rules on
lending, hampering access to capital.
Although most of them are in the retail business, they also feel the pinch from the US financial crisis, he added, especially since business in general is still reeling from the rise in oil prices and raw materials.
“About 70 to 80 percent of our products are imported from China and Hong Kong. Now that the oil prices are going up as a result of what has happened in the US, freight charges are going up too,” said Chan.
But Chan assured that most business owners are looking for new ways of addressing the rising prices and keeping their customers’ hearts and pockets satisfied.
“This has become a healthy market competition, because this means squeezing our brains to look for better marketing strategies, better customer service, better packaging. At the end, the consumer will definitely benefit,” the businessman added.
