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Manila brands eye international markets
The Philippine market is no longer big enough for many of the country’s successful retail firms. After more than holding their own against foreign and local competitors in a highly competitive retail market, these firms are setting their sights on conquering burgeoning markets elsewhere in the world.
Here are some of the businesses poised to take their Philippine concepts abroad via franchising.
Goldilocks, which sells pastry and other food, was among the first Philippine businesses to venture overseas. The family concern planted its first flag on US soil in 1976. Initially targeting the large Filipino community on the US West Coast, Goldilocks’ products are now finding their way into the mainstream US market.
Marketing director Pinky T Yee says that Italians and Asians, who are into big celebrations, were among Goldilocks’ first non-Filipino patrons in the US.
Yee says that these clients, who initially bought birthday and wedding cakes at the shop, have widened their purchases to include Filipino favourites such as the polvoron (a dessert made of milk powder), mamon (French sponge cake), lumpiang ubod (vegetable crepe) and barbecue chicken/pork.
By listening to its customers and continual product innovation, Goldilocks has endeared itself to the foreign market with products that suit its tastes. These include the Concorde cake and Fruit Charlotte, which are not available in the Philippines.
Goldilocks’ first US store opened in Los Angeles 10 years after its owners — two sisters, Clarita and Milagros, and their sister-in-law, Doris — opened their first Goldilocks bake shop in the Philippines in 1966 along Pasong Tamo in Makati City.
The US shop has since grown into a network of 15 — nine in northern California, four in southern California one each in Las Vegas and Nevada, and another in Vancouver, Canada. The 16th branch will open later this year in Mountain View, Silicon Valley.
Back home, Goldilocks has a chain of 167 shops, two-thirds of which are franchised.
To succeed in any country, Yee says it is important to keep close tabs of its market. As much as 40% of the products that Goldilocks sells outside the Philippines are not available in the home country.
In the US, even the outlet design is in tune with the American perception of a Filipino store.
“To succeed, one has to listen to customers and be determined to succeed. It is also important to establish an identity that makes your shop stand out,” Yee says, adding that Goldilocks is also looking to expand into Asia and the Middle East.
Max’s, The House That Chicken Built, took longer to serve its brand of fried chicken and other Filipino dishes in the US. It opened its first restaurant in the Philippines more than 50 years ago but it was only in 1982 that its first outlet outside the home market was opened in the US. Max’s bore all the trial-and-error costs of operating in a foreign environment on its own.
In 1988, Max’s started franchising its restaurants. Today, there are 95 Max’s outlets in the Philippines — 54 company-owned and 41 operated by franchisees — and five in the US where three are franchised.
Recently, the restaurant chain franchised its brand to a company in Hawaii, resulting in the opening of its sixth outlet in the US, says Roberto P Ocampo, COO of Max’s Franchising Inc, a franchising arm established in 1997. Max’s has since been named the Outstanding Filipino Franchise in the food category by the Philippines’ Department of Trade and Industry.
The company delayed franchising abroad because it had wanted to test the
marketand perfect its system to assure franchisees of a good business, says Ocampo.
It chose California as its first base for the large Filipino community there and because it was inspired by other companies’ success in the state.
Fried chicken is the main item on the Max’s menu. The dish is cooked according to a secret recipe concocted by the Max’s founder Maximo Gimenez, who first served it to the US occupation troops stationed in Quezon City in the Philippines in 1945.
The menu has since expanded to include other Filipino favourites such as fresh lumpia (spring roll), kare-kare (oxtail in peanut sauce), sinigang na hipon (shrimp in sour broth) and crispy pata (crispy pork knuckles).
The challenges of running a franchise in the US include adhering to stricter sanitation rules and a number of building specifications not required in the Philippine market, says Ocampo. “The good thing about this is that our standards are raised.”
While Filipinos form the bulk of its customers in the US, a good number of Americans patronise Max’s, which has encouraged the company to discuss the franchising potential in the US East Cost, particularly in New York, Washington, Chicago and New Jersey, says Ocampo. Max’s also plans to enter the ASEAN and China markets, he says.
Time Depot finds franchising a quick way to grow its network. The retailer of premium watches, ranging from sporty models to fashionable signature brands, has unveiled plans to expand into other Asian cities and the US market through franchising, according to owner Richmond Lim.
Time Depot today operates 15 outlets, up from two in 2001 when Lim saw a market for affordable luxury timepieces in the Philippines.
The business was born out of Lim’s love of timepieces and on his discovering that Philippine shops generally carried only about 100 watch brands, compared with up to 200 in countries like Singapore, Malaysia and Thailand.
Time Depot’s parent company, Belrewmond Trading Inc, then signed up for the exclusive distributorship of Alfex, Casio, G-Shock, Baby G, Naf Naf, Nautica, Marc Ecko, Club Med, Suunto and Calvin Klein watches in the Philippines.
Unlike other traditional watch stores, which hide their products under glass covers, Time Depot’s watches are displayed in full view for potential buyers to inspect before making their purchases.
With customers becoming more sophisticated and looking for an engaging retail experience, Time Depot’s store concept encourages shoppers to leisurely check out the merchandise.
Lim also boasts of a range of sports watches that is a big hit with an increasingly sporty Filipino population. “More and more Filipinos are going into extreme sports so they need watches that can do a lot of things.
The total franchise package for Time Depot runs from 2 million pesos (US$36,000) to 3 million pesos, covering the franchise fee, construction cost and initial merchandise inventory.