2013: PANA’s Annual Economic Forecast & Consumer Trends
To best prepare for the year ahead, the first PANA GMM talks are dedicated to economic forecasts and consumer trends. Paolo Azurin, VP Investment Banking at Credit Lyonnais Securities Asia (CLSA) and Ed Mapa, Jr. CEO and President of Media Contacts Philippines were invited to share the gist on these topics respectively.
Early on we have welcomed headlines of a bullish economic climate given the strong Philippine economy in 2012. Azurin cited that Philippine growth kept strong amidst weak global markets.
Service leads the Philippine economy with 7.4-percent growth rate. It is followed by Industry with 6.5-percent while Agriculture maintains its 2.7-percent rate from 2011. BPO revenues and OFW remittances, both key growth drivers, will reportedly continue to drive investment in property and consumer durables over the medium term. BPO revenues are expected to surpass OFW remittances by 2016.
Other key findings include: growth is evidenced by large projects of major developers, low inflation and low interest rate environment encourages bank lending and private investment, private consumption has been historically strong with direct implications on retail trade activity, consumption-driven economy is likely to continue with a shift on relative luxuries.
On how the effects of the rising economy will trickle down to the impoverished, Azurin explained that construction is the sector experiencing growth and not in agriculture where most of the poor people are. He emphasized that what we have is strong investment in construction but we need to shift towards capital formation in durable equipment in order to expand the productive capacity of the economy.
Mapa laid out our current landscape before sharing the opportunities it offers brands. “Everyone is talking about digital and data.” He further discussed that, “technology is transforming how CEO’s are steering their corporations.” We see the manifestation of how consumers prioritize how they engage with technology through multi-device ownership, the development of the app-economy, the multi-screen. “Consumers trust information from social media than traditional media.”
50,000 people across the globe say that only 20-percent of brands are notably improving people’s quality of life and that people would only care about 30-percent of brands if they disappeared. “Only 33-percent of brands are meaningful. For companies to survive and greater returns from their brands, they need to become meaningful to people ‘in human terms,’” said Mapa, citing research by Havas Media on Meaningful Brands in 2011.
Mapa reinforced, with the positive economic outlook presented by Azurin, that fast growth is in the Philippines. “This is the time to be aggressive. Asians are leading digital.” Noting that the Philippines was ranked the 6th most digitally engaged market.
He then shared the thirteen trends expected to figure heavily this year are Progressive screening, Hyper-targeting, Micro-community, Life Tracking, The Quantified Self, Celebration Nation, Entrepreneurial Consumers, Emerging Squared, Newism, Orchestration, Social Snacking, Social Shopping, and DIY Healthcare.
Small is the next big thing according to Mapa. “People talk about brands in forums. Look into micro-communities that can magnify your affinity with your consumers.”
Bite-sized social networking is also a trend to watch out for. “They are consuming more but in bite-sizes. It is the reflection of the tingi-tingi attitude of Filipinos.”
PANA GMMs are interactive forums where industry experts are invited to share information to PANA members on timely and relevant topics; held every last Thursday of the month at the Hard Rock Café, 3/F Glorietta 3, Makati City.