Retail in Asia

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Still room for growth in 2024, according to the Philippines’ SM Group

SM Investments Corporation, a prominent conglomerate in the Philippines, says there is consistent consumer growth in the country and further opportunities for expansion.

Despite challenges such as the Asian crisis, household consumption in the Philippines has remained resilient, driving sustained economic growth, according to SM Investments president and CEO Frederic C. Dy-Buncio.

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Consumers’ discretionary spending in key sectors like fashion, food and beverage, and entertainment has contributed to robust consumption activity.

In 2023, SM Investments announced a robust financial performance for the January to September period, with a consolidated net income of PHP55.9 billion (USD998.8 million), marking a significant 30 percent increase compared to PHP42.9 billion (USD776.5 million) in the same period last year. Consolidated revenues also exhibited substantial growth, rising by 15 percent compared to the corresponding period last year.

Dy-Buncio attributed the growth to vibrant consumer activity in malls and sustained spending in discretionary retail categories.

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Philippine consumption is also supported by substantial remittances from Overseas Filipino Workers (OFWs) and the expansion of the Business Process Outsourcing (BPO) industry, along with improving employment figures.

BPO firms relocating to provincial areas also provides additional purchasing power to the country’s young population. SM is continuing to expand its presence in provincial areas, where the potential for establishing modern retail formats is significant due to the relatively low market penetration.

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Over 80 percent of SM’s new retail stores are located outside of Metro Manila, aligning with the company’s mall expansion plans targeted at the provinces.