Franchisors: Expanding in ASEAN means getting Halal-certified

WHILE Philippine-made products have the potential to grow big in the Southeast Asia, food products in particular may have a hard time penetrating the ASEAN market if they aren’t Halal-certified, a top official of the Philippine Franchise Association (PFA) said.

Halal-certification, according to PFA president Dr. Alan Escalona, would be one of the challenges Filipino entrepreneurs will face should they consider expanding their presence in the ASEAN region.

He said that while the ASEAN integration allows free flow of products among member countries, such an opportunity to market products to over 600 million consumers has some boundaries.

“Filipino brands that want to penetrate the ASEAN region should be Halal-certified, otherwise your products will be snubbed by our ASEAN neighbors,” said Escalona.

“We’ve got excellent products to sell to the world. However, we need to understand the importance of the Halal-food label.”

Other barriers

A report stated that there are about 1.7 billion Muslims around the world, 255 million of which are in the ASEAN region. The Halal global market is said to be worth $2.3 billion.

Aside from Halal certification, another barrier faced by Filipino entrepreneurs in expanding in ASEAN, especially those engaged in the franchise business, is the low awareness about franchising as a tool to grow businesses in some countries in the region.

Escalona said not all ASEAN entrepreneurs know about franchising.

Franchise expert Rudolf Kotik, in a separate interview, reinforced Escalona’s statement, saying it may take some time for Philippine-based franchisor companies to successfully penetrate this region’s economies.

“The intra-ASEAN franchising will take place, but in five years’ time,” said Kotik, founder of RK Franchise Consultancy. He explained that member countries right now are more concerned about strengthening their own brands in their country first.

Kotik sees stronger interest of franchising in the Middle East rather than in ASEAN, largely because of the huge presence of Filipinos in the Middle East countries.

When it comes to expansion by franchising, the Philippines has been the most successful country in ASEAN, with 1,300 established franchisor companies spread across the country.