Indonesian mini-mart chain company, Alfamart, is planning to open 200 new stores in the Philippines in 2019, according to a report by Fitch Ratings. Alfamart has partnered with Philippine conglomerate, SM Group, to aggressively expand its footprints in the Philippines, where it currently has 400 stories.
According to the Fitch Ratings report, the country’s mini-mart sector is untapped and has limited competition at present. Existing players only carry limited products, in contrast to Alfamart stores which offer fresh and frozen seafood, personal care and small household appliances, giving it a competitive advantage.
Alfamart has chosen to expand in the Philippines as the company believes that the country has more potential compared to other South East Asian markets like Thailand and Vietnam. Fitch cites that the Philippines, like Indonesia, are consumer-driven markets with young population and an expanding middle class. Local consumers prefer to buy small amounts of bundled products rather than filling grocery carts.
Through Alfamart’s partnership with the SM Group, the company’s investment risk is mitigated by the strong presence of SM Group in the country. Alfamart will have access to SM Group’s large business network including its 1,729 retail stores nationwide and its strong brand.
(Source: Retail News Asia)