Niche Distributors Corp. - ASEAN/ Philippine Trade Channel Overview

ASEAN & Philippines – Trade Channel OverviewJP ACLAN

PHILIPPINES 100 Million Population Annual GDP Growth rate of

7 to 8% Rising Middle Class

Segment 1.1 Million Retail Point of

Sale 41 Million Internet Users American Model - Society 7,107 Islands Robust Capital & Consumer

Market English Speaking Nation

ASEAN – Association of Southeast Asian Nations

10 Member States 620 Million Population Annual GDP Growth Rate

of 5-7% 3.8 Million Retail Point of

Sale 155 Million Internet Users $5 Trillion Dollar Annual

GDP 200 Million Households Integration in 2015 Single Currency in 2016

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TRADE CHANNEL OVERVIEW - PHILIPPINES

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PRODUCT FLOW OVERVIEW - PHILIPPINES

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There are three fundamental trade channels that are the primary and most common engagement points in the Philippines:

A. Modern Trade RetailersB. National WholesalersC. National or Area Distributors

These major customer segments serve the entire trading matrix in the country. Each channel supplies smaller retail & wholesale touch points located in various parts of the Philippines. These companies act as the main conduit of consumer products in every category.


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Trade Channel Interaction is the most important transaction element in the Philippines. Without a thorough understanding on how goods effectively flow from the source to the consumers, sales performance & profitability will be affected. The sub-sections immediately below the primary segments need to be properly engaged in order for the product to seamlessly flow through the targeted consumer market. These are the balance trading sections:

A. Local Key AccountsB. Local WholesalersC. Public MarketsD. Sari-Sari Stores


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Trade Channel & Route to Market engagement execution strategydepends on the price, product category, brand equity, target consumermarket & business model of the distribution company involved.Effective Business Relationship in the Philippine trading landscape isdriven by consistency in personal engagement and is primarily forgedby providing a continuous supply of profitable products that constantlyruns through the aorta of the trading spectrum.

Product availability is key in gaining market share but is directly relatedto the S.K.U & brand being sold. Category matching with the identifiedtrade channel is important especially in developing a robust move outplan that will impact consumer uptake. Shopping and spendingbehaviors are directly related to the income demographic of theindividual and the locality where they are situated driven by thevariation in regional inflation rates that exist in the country.

TRADE CHANNEL DEFINITIONS

MODERN TRADE RETAILERS Defined as branded stores or outlets that serves direct to consumers on a national scale. Most of

the time, they also serve as a re-supply point of General Trade Retailers. These retailers usually have 100 or more doors.

Types: Department Stores, Supermarkets, Hypermarkets, Modern Convenience Stores, Drugstores/Pharmacies and Membership Shopping Stores

Target Market cuts across different consumer classes, demographics & segments. Modern Trade Branding strategy is always in line with their respective target customers.


NATIONAL WHOLESALERS Defined as companies that supply local wholesalers, local key accounts, public markets and sari-

sari store customers on a national scale. They are the biggest re-supply point of the General Trade Segment.

Types: Warehouse Pick up & Direct to Store Delivery System Target Market covers the entire retail trade channel serving the Philippine consumer market.


NATIONAL or AREA DISTRIBUTORS Defined as distributor corporations that supply national, regional or local retailers & wholesalers.

Coverage may or may not include Modern Trade Retailers & National Wholesalers. Types: Warehouse Pick up & Direct to Store Delivery System Target Market covers the entire retail trade channel serving the consumer market.


LOCAL KEY ACCOUNTS Defined as regional & local modern trade retailers that mimics the format of global retailers. Types: Department store, Supermarket, Hypermarket, Cash & Carry Warehouse Pick up, local

convenience & drugstore. Target Market covers the regional or local consumer market.


LOCAL WHOLESALERS Defined as regional & local wholesalers that supplies geographic trade channels. Types: Countertype or Self-Service Target Market is the regional or local retailers.


PUBLIC MARKETS Defined as regional or local area consolidation of retailers, wholesalers, small and big sari-sari

stores. Types: Countertype or Self-Service Target Market is the regional or local consumer market.


SARI-SARI STORES Defined as the basic trade channel unit of the Philippines. These retailers are the closest to the

Filipino consumers and are transacting on a cash to cash basis. These stores also sell products at the smallest unit possible.

Types: Countertype Target Market is the regional or local daily consumption market.

TRADE CHANNEL OVERVIEW - PHILIPPINES

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TRADE CHANNEL CENSUS - PHILIPPINES

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CLIENT BASE – PER TRADE CHANNEL

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E-COMMERCE BUSINESS - PHILIPPINES

$150 Million Annual Business at the end of 2014

300% Growth in the past 2 years - $500 Million Projection by 2018

5 Million E-Commerce Shoppers in the Philippines – Projected to Reach 10 Million in 2018

Major Categories: Fashion, Bags, Shoes, Sports Apparel, Food, Electronics, Home & Décor, Beauty, Lifestyle Activities & Travel

Flash Sales & Discount Online Retail Business Model

TOP E-COMMERCE SITES - PHILIPPINES

PHILIPPINE TRADING LANDSCAPE

Niche Distributors Corp. - ASEAN/ Philippine Trade Channel Overview

Small Business & Entrepreneurship

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