Franchisers seek support from retailers in asking malls to prioritize local brands

OFFICIALS of the Philippine Franchise Association (PFA) are seeking support from the Philippine Retailers Association (PRA) and the Philippine Chamber of Commerce and Industry (PCCI) in asking mall owners to prioritize homegrown brands in their respective establishments.

PFA president Alan Escalona said local brands are struggling with the presence of foreign brands in malls, losing more market share even if most of them have already upscaled and elevated their product offerings to the market.

“Location remains to be the number one issue and the affordability of the rental rates,” said Escalona.

At present, mall operators are giving the best or premium locations to big foreign brands, leaving locations with not enough foot traffic to homegrown brands.

Escalona said the association is also planning to request mall owners to provide equal treatment to homegrown brands, as they also want to grow their businesses and be at par with these foreign brands.

In Cebu, the PRA-Cebu Chapter has sought the support of local officials to create an ordinance persuading malls to give special non-discriminatory locations and special rates for homegrown businesses.

Escalona said seeking the support of PRA and PCCI will give a stronger voice to local businesses, especially at a time where the retail landscape has become hypercompetitive.

“Hypercompetition happens when you wake up and all of a sudden you find out you already have a battalion of competitors,” said Escalona, who is also the president and chief executive officer of Fruit Magic.

An example of this is Uber, a mobile ride hailing startup that has an annual revenue of $10 billion, which is now crushing the traditional taxi industry.

While some local brands are strengthening their foothold in the local scene by elevating the quality of their products, others have also ventured overseas, especially in countries where there is a high concentration of Filipino communities, to create more growth opportunities.

Potato Corner, for instance, has expanded to Indonesia by opening 80 stores via franchising. It also has strong network of 110 outlets in the Middle East and the US.

“While we are securing our foothold here, we encourage our members to also look at the overseas market where there are about 12 million overseas Filipinos who can become brand ambassadors for our products,” said Escalona, adding that Filipinos are influential in some parts of the Middle East. He said Filipinos working abroad are no longer limited to domestic helpers but are highly-skilled professionals who have high disposable incomes.

Aside from venturing into foreign markets, some local brands have also inked local partnerships with other local brands to create synergy, allowing both to grow and widen market reach.

Escalona said his Fruit Magic business, for instance, is embarking on freezer distribution systems, making some of his Fruit Magic products available in Potato Corner outlets.

Escalona said they will initially pilot four branches of Potato Corner for this venture and if proven successful, the partnership would allow Fruit Magic to expand in areas where Potato Corner is present.

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