By Alexandre Lafleur

And Evangeline Winfield

Team Philippines

"For many decades, Filipinos have been relying on the American cosmetic products and are now ready to experience something new… something Canadian. Because of the prosperous cosmetic industry established in Canada they perceive us as an opportunity to further enhance their market." is the view of Ms. Catherine Clare M. Rivera General Manager of Skin Sciences Laboratories and an expert in the field of cosmetic products.

From the time vanity became a part of the human psyche, the cosmetics industry flourished. In the Philippines alone, two thirds of the population under thirty years of age are heavy users of cosmetic products. It is a known fact that in the Philippines (and around the world), men are becoming more and more conscious about their facial conditions. No one wants any acne, yet nobody feels like clogging up their pores with harsh chemicals.

For generations, they’ve relied upon the natural ingredients of their plants and will continue to invest in Mother Nature’s products to give them the appearance they so desire. In skin care, considering Asian’s facial skin is oily, they prefer to utilise alcohol- based products. Therefore, we realise that Asians are now more concerned about their health and they have a tendency to use efficient and natural products. The big cities of the Philippines like Manila have a high degree of pollution, which makes the citizens big users of skin care products. Effectively 35% of consumption is in Metro Manila as a result of the presence of malls, supermarkets and retail outlets in population centres.

In order for a product to be sold efficiently, proper marketing strategies with the consideration of the different cultures and budgets must be contemplated and acknowledged. Experts in health care told us that an advertisement promoting a product against pollution residues to prevent degradation caused by air pollutants will be promising in the major cities.

Today’s market is covered by multi-national companies such as P&G, Unilever, Avon, L’Oreal, Colgate and J&J. Their key products are within the fields of hair care, baby products and makeup. There are approximately one hundred local companies that manufacture products covering the skin care, nail care and whitening sectors.

Companies brought to our attention that one must take into consideration the effects of the environment on the ingredients of the products. Due to the bad quality of the water and the high degree of chlorine added to it, one must be sure that the products being promoted are as efficient overseas as they are in Canada. One must also evaluate the temperature of conservation of your products’ active ingredients. The Philippines’ common temperature is around 30 degrees Celsius, a significant gap that could result in the contamination of the products. Because of the diversity of the environment and the needs between the Filipinos and Canadians, both parties should understand that only a certain quantity of products can be acquired.

In order for a company to start manufacturing or selling their products and services here in the Philippines, there are regulations that are compulsory. There are strict screening processes of the ingredients and many inspections must be done on the products before they are released into the market. A receipt of raw and packaging materials through the processes and steps taken to approve the products to achieve zero defects before they are marketable. The governments’ strict regulations on these factors makes this side of the industry almost fool proof. An example of the licenses that must be obtained before a company is enabled to establish themselves here in Philippines are: License to operate as Cosmetic Manufacturer, License to Operate as Drug Manufacturer, License to Operate as Medical device Manufacturer. Manufacturers and importers are required to register their produces. Pre-market and no pre-market approval registration system must be enforced as well as labelling regulations and negative ingredient listing.

As a result, there are specific opportunities in selling or manufacturing cosmetics in the Philippines. In order to proceed, a company must develop a sound marketing plan, must be aware of the strict regulations and particular needs of the Southeast Asian consumer. In addition, keeping in-mind the cultural environment as well as the established competition will lead the Canadian cosmetic industry to a great economic achievement.

_________________

"I want to get involved with Canadian companies to add something new and better to the quality of my beauty products. I enjoy the innovation and efficiency of Canadian products such as Mac Cosmetics. ", is the inquiry made by Ms. Mina Gabor a respected business woman owner of a beauty shop selling high quality beauty products.

Mina Gabor

President

Philippine Small and Medium business development foundation, inc.

#1 Sta. Escolastica Street

cor. Roxas Boulevard, Pasay City

1300 PHILIPPINES

Tel. (632) 834-2993

Fax. 834-2994

As related by Ms. Rivera, the General Manager of Skin Sciences Laboratories "My company offers opportunities for Canadian companies who want to manufacture their own products abroad. The companies I’m associated with would be interested in purchasing Canadian products that would allow them the opportunity to utilise their own private labelling when marketed here in Asia."

Catherine Clare M. Rivera

General Manager

Skin Sciences Laboratories

Unit 101 Central Business park

Amang Rodriguez Ave., Manggahan

Pasig City, Philippines

Tel.: (632) 681-3131

Fax: (632) 681-1515

The pharmaceutical industry of the Philippines is a fast growing industry that responds to the demands of the country. Pharmaceutical establishments and drug outlets, become the core of the industry’s production, distribution, and sale of medicines and pharmaceutical specialities (retail and wholesale).

The pharmaceutical establishments and drug outlets differ in their functions within the industry. Pharmaceutical establishments are engaged in the manufacturing, importation, repackaging and distribution of drugs and medicines. On the other hand, drug outlets do the retailing of medicines and drugs for the use of the consumers directly.

Since the end of 1996, the number of pharmaceutical establishments increased by almost 75% to 2,310 in comparison to 1993’s 1,324, as shown by the statistics that were released by the Bureau of Food and Drugs. Drug distributors are the biggest category among the six categories of establishments with approximately 1,633 in existence.

In 1996, the Philippines ranks third among Southeast Asia with a total market value of US$1.3 in sales. They represent about 12.45% of the total Southeast Asian market. The Philippines slips into fifth place when the drug market size is translated into per capita drug consumption – it is overtaken by Hong Kong and Singapore.

The disease incidence and population growth are factors that affect the product demand. The corollary would be the size and breakdown of the population by age group. The younger and more senior citizens, which already comprise half of the population normally have a much higher demand for medicines and health care than any other age groups.

The Philippines government’s commitment to its health care facilities, programs, priorities, and budgetary allocations for health maintenance influence the increasing demand level for pharmaceuticals. The availability and quality of health services and health personnel likewise is correlated to demand. In 1996, the number of prescribing physicians increased by almost 30% to 29, 329 doctors from 22, 970 in 1992.

Distribution costs is one of the hurdles within the industry but is overcome by appointing a distributor for pharmaceutical firm’s products. The distribution network extends further down to wholesalers, drugstore chains, retail drugstores, industrial accounts, hospitals and government agencies. Dispensing outlets of medicines are also found in industrial government hospitals and health centres. The distribution fees are anywhere between 12% and 15% of the product sales.

Many experts well established in the pharmaceutical industry suggest that a company emphasise their marketing strategy upon the doctors. If a company cannot meet the expense of a representative abroad, they will have to contact a local distributor. The private hospitals have a very good reputation all across the country. They’ve accomplished a reputation of offering superior treatments and pharmaceutical products. Take into consideration that the consumer power of the people (those who can afford it) who receive superior treatments may affect the amount of sales of drugs.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Contact specialised in the pharmaceutical industry at the Canadian Embassy of Canada in the Philippines.

Mr. Butch dela Cruz

Commercial Officer

The Canadian Embassy in the Philippines

P.O. Box 2168

Makati Central Post Office

Makati City, Metro Manila, Philippines

T. : (011-63-2) 867-0095

F. : (011-63-2) 810-1699