Jollibee acquires Philippine distribution rights for Panda Express

Panda Express – a fast food favorite in the United States

An interesting retail industry news I heard this morning was about Jollibee’s acquisition of the Philippine distribution rights for Panda Express.

Panda Express has been my personal long time fast food favorite whenever I visit the US. And I’ve always believed that this was one concept that would work in the Philippines, given the penchant of Filipinos for large sized food servings (‘sulit’ factor).

It is interesting to note that the recent growth strategy of acquiring international restaurant brands by Jollibee and other local food retailers mirrors the growth strategy of Philippine fashion and apparel retailers earlier in the decade. I distinctly remember many of my co-retailers scouring the US, Europe, and East Asia for brands to introduce in the Philippines. While SSI and Suyen took the lions share of foreign apparel brands, other smaller retailers (like ours) chose to focus on certain niche and cult-favorite brands. The influx of these foreign brands into the country paralleled the phenomenal growth of shopping malls, where there was simply too much demand and too little spaces available in existing malls.

Local market getting tired of fashion retail?

However, this trend has reversed in the past 3 years. After the entry of fast fashion brands Uniqlo and H&M, the local market simply got tired of fashion retail. Many popular brands brand were met with lukewarm attention when they opened locally. The slow (but upward) growth in online retail has also breathed new life to independent local fashion designers wanting to find a market for their designs amidst the crowded fast fashion retail scene. It’s safe to say that many retailers overestimated the Philippine consumer. Retailers simply lost sight of one key learning when introducing or launching a foreign brand in the market — what is popular to an American consumer, may not necessarily match our local tastes, i.e. what I think can work in this market, may not necessarily be what the entire market thinks. This is why I strongly urge my students and clients to conduct a full customer analysis to determine feasibility of any new brand or concept into the local market.

Importance of conducting a full customer analysis

In the past 3 years, many retailers have been riding the wave of restaurant concepts flooding the market, particularly those bringing in well-renowned Japanese restaurants and American family dining chains. It is, however, also interesting to note that local retail statistics show that more Japanese restaurants closed than opened in the Philippines this year. On the flip side, restaurants opened by local celebrity chefs with creative food concepts have seemingly weathered this cyclical trend. Is the market getting ‘over-fed’ by foreign restaurant brands?

Going back to the Panda Express — again, while I personally believe in the concept’s feasibility for the Philippine market, let’s stay tuned to see how the market reacts.