Published in the front page of Business Mirror,
December 10, 2007
http://www.businessmirror.com.ph/12102007/headlines02.html
Filipino kids represent a potential powerhouse consumer segment. With an estimated P37 billion in spending money annually, they represent the modern consumer who is eager to assimilate new technologies and embrace change.
The New Generations Philippines 2007 survey, conducted by research firm Synovate for Cartoon Network, revealed that kids in the 7-14 age group have a combined spending power of P37 billion annually from pocket money and gift money alone. Total pocket money received by kids was placed at P30.6 billion yearly. Money received as gifts, on the other hand, was placed at P6.3 billion.
It also showed kids in greater numbers taking to the Internet, with Internet usage doubling between 2005 and 2007, following a compelling rise in computer use within the same time period.
Interestingly, the study revealed, more kids now have access to technology right in their own rooms, with the number of those having Internet access, computers, TV sets, handheld video games, video consoles, Ipods and DVDs growing markedly between 2005 and 2007. Not surprisingly, kids are relying on these gadgets not just for entertainment, but also to complement their social lives.
Released late last month, New Generations 2007 is a quantitative study that provides insights into the minds and habits of Filipino children. It was conducted through face-to-face, in-home interviews in Metro Manila, Cebu and Davao with 1,000 kids aged 7-14 and one of their parents. For the 2007 study, a booster sample of 200 moms of younger kids aged 4-6 was added.
The study showed that 94% of parents with kids in the age 7-14 group give pocket money to their children. This incidence is similar across age, gender, location and socio-economic class. Further, 92% of parents give pocket money on a daily basis.
Among the age 4-6 group, 46% of kids receive pocket money.
Average weekly pocket monthly was placed at P169. Girls (P172) got more pocket money than boys (P165). Older kids got more pocket money than younger ones, with those aged 13-14 receiving an average of P245 weekly. Kids in the 11-12 age bracket got P165, those aged 9-10 had P139 while kids aged 7-8 got an average weekly pocket money of P125.
Quite expectedly, kids in the AB socioeconomic bracket got more pocket money than their counterparts in the CD segment. Average weekly pocket money in the AB class stood at P348, compared with P186 in the C and P142 in the D segments. Kids in Manila also had more pocket money than their counterparts in the Cebu and Davao, with the Manila-based kids averaging P175 as opposed to Davao’s P151 and Cebu’s P125 weekly.
Besides pocket money from their parents, kids also receive money for gifts during birthdays and holidays. The study estimates that kids get an average of P1,800 annually in gift money. From pocket money and gift money combined, kids have an average annual income of P10,588. Combining pocket money and gift money and scaling it up to the 3.7 million kids that the study represents, kids thus have a staggering P37 billion to spend annually.
Kids could be a good market to target, given their consumption patterns. The study showed that kids frequent malls, with 99% of parents saying they visit malls with their children. Over 54% of parents of kids from the AB segments visited malls weekly, while 36% from the C and 18% from the D segments do so weekly.
Technology pretty much dictated the tempo of these kids’ daily lives, made possible by their improved access to technology. The study showed a phenomenal growth in access to digital technologies in kids’ homes between 2005 and 2007. The increase was most significant for handheld video games, which jumped 90% to 38% in 2007 from 20% in 2005, and MP3’s and Ipods, which soared 164% during the same period. Home internet access likewise rose by 53% to cover 23% of the surveyed homes, as were access to computers (up 40%), digital cameras (62%) and DVDs (56%). Ownership of mobile phones among kids also grew 62% in the last two years, with 67% of kids in the AB group claiming mobile phone ownership. In Metro Manila, 26% of kids own a mobile phone.
Internet usage among kids has nearly doubled in the last two years, with 46% having used the internet in the past 30 days this year, compared with just 27% in 2005. Among computer users, 65% of kids are Internet users, with usage increasing with age (84% of 13-14 age group; 75% of 11-12 age group; 50% of 9-10 age group; 39% of 7-8 age group; and 29% of 4-6 age group) and income class (71% of AB segment, 66% of C and 64% of D segments). Interestingly, more kids are online in Davao (74%) than Metro Manila (65%) and Cebu (60%). Favorite online activities were online gaming (91%), making or updating a homepage (76%), visiting video websites (72%) and playing multi-player games (68%).
Increased internet usage came about with greater computer use. Seventy percent reported using a computer in the past 30 days, a 45% rise from 2005. In the AB segment, computer use was placed at 91%.
Television, however, continued to eclipse everything else as the kids’ most favored leisure activity, with 96% of kids saying they watched TV yesterday as opposed to 54% who read books (excluding text books), 46% who played with toys, 20% who played sports, 18% who used the internet and 18% who played games online. //
Monday, December 10, 2007
Sunday, December 9, 2007
People I Admire Series: Deck Go
(Ten years ago, I interviewed and wrote about Deck Go. He had just joined Robinson's then. It was amazing to see how much he has changed. He was no longer tentative, but decisive and so much more knowledgeable, yet he was still humble. He proudly showed me an article written about him ten years ago in Men's Zone magazine. It carried the byline of Athena Mitra. That was me. Athena Mitra was my Labrador Retriever. I used that pseudonym for the longest time.)
Published in Personal Fortune Magazine, 2007
Philippine real estate is on an upswing. Drawing strength from the swelling ranks of overseas workers, backstopped by falling interest rates, the real estate sector is sprinting at a pace not seen in the past decade.
Its renewed vigor has spawned a new set of winners, and among these, Robinsons Land (RLC) is undeniably the biggest. With a market capitalization of P55 billion, it is hard to believe that fourteen years ago, RLC was just a one-mall operation, the fledgling in JG Summit’s nest of companies. A decade or so down the road, it has become the indubitable crown jewel of the JG Group in the Philippines.
Those who have witnessed RLC’s remarkable growth in this short span attribute much of this to the efforts of Frederick Go, who recently assumed the twin posts of president and chief operating officer of the company. Under the mentorship of his uncle James Go, Deck has bloomed from doer to leader, his vision and understanding of the market made stronger and deeper by the sheer experience of steering the company towards growth in the face of numerous challenges, including the Asian crisis. Today, under the able direction of his cousin Lance Gokongwei, Deck has definitely hit his stride. Whereas fourteen years ago, Deck, fresh from a stint at the Manila Times, was obsessing over the details of its mall’s theme parks or combing the countryside for a new business opportunity, today, he presides over the collective goals of a group that is poised to leap forward from a springboard of great ideas and a commitment to growth.
“It’s definitely more challenging going forward,” Deck reckons, more so because RLC has crossed the great divide from near-obscurity to veritable market leader. Today, RLC is the second largest diversified real estate conglomerate in the Philippines, with 18 malls, 17 residential subdivisions, 15 residential condominiums, 6 office buildings and four hotel properties to its name. It is the largest office landlord, the second largest shopping center operator, the third largest residential condominium developer and the fourth largest hotel operator in the country.
With total assets of P37 billion, annual revenues of over P9 billion and an EBITDA of P4 billion, plus the highest return on equity among its peers, RLC is not surprisingly the darling of stock market investors. Its high dividend payout policy is another welcome bonus. In fact, the company recently raised P11 billion from foreign investors for a public offering, with the book fully covered even before Deck, along with other RLC officers, had finished with their overseas road show presentation.
Presiding over a dynamic organization comes naturally to Deck, who nowadays finds himself also managing investor relations, as well as helping out in business development and marketing, as the situation commands. Naturally charismatic and brimming with enthusiasm, Deck admits he enjoys his work. “I like the challenge of starting a business, especially when you start with just a concept or idea. There is always the excitement of starting a project and seeing it become a successful reality.”
Buoyed by the dynamism of the real estate sector, Deck is nevertheless not allowing investor euphoria to taint his reading of the market. Instead, he chooses to view things from a safe distance. “This may be part of a cyclical boom; some say it’s just the beginning, some say it’s the middle of an uptrend, and some think it has only a couple of years left” he notes.
Structural changes have helped the Philippine economy recover and expand. Steady consumption growth, rising purchasing power, and enhanced aspirational or lifestyle spending have underpinned the expansion of the real estate sector in the past years, aided largely by developers’ access to cheap capital. Sudden upticks in land prices, however, have also conjured fears of a real estate bubble, dreaded by every developer and investor.
Fortunately, RLC is in a “unique position to manage both opportunity and risk.”
Nimble and quick to the draw, RLC can swiftly spring into action to take advantage of emergent opportunities, without taking its eye off lurking dangers inherent to the real estate sector. Deck recognizes that agility and resilience are hallmarks of RLC. “What matters is that as a company, we are not just ready to take advantage of opportunities that may arise, but have the ability to mitigate risks along the way,” he says.
Recurring income from RLC’s office, mall and hotel operations evens out the erratic income stream from the development business. Ideally, Deck points out, “development income and recurring income should be balanced.” RLC’s clean balance sheet, with zero net debt, gives the company a host of alternatives. “We are open for more gearing,” Deck discloses, pointing out how RLC “manages for the allocation of resources, to make sure the portfolio is balanced.”
Given the current trend, RLC will, in all likelihood, take a more aggressive stance going forward. “The economy looks good and the global investing world is looking positively at the Philippines, something that has not happened for a long time. The outlook appears bright. It’s our job to capitalize on these opportunities.” He identifies the leisure and retirement business as a field replete with opportunities.
The blueprint of growth entails a keen eye for detail – something that Deck has harnessed in all the years he has been in the industry, meeting with those who make the business move -- draftsmen and architects, investment bankers and stock analysts, salesmen and brokers. This is doubly important because he also manages the Gokongwei family’s private property business in China, consisting of large-ticket projects in Shanghai, Xiamen and Chengdu.
Building the company in this increasingly turbulent global environment requires much from any corporation, and RLC is rising up to the challenge. Deck realizes that past corporate successes are not indicative of future performance. On the contrary, they simply spawn copycats who can easily duplicate a company’s success. RLC’s innovative spirit, though, ensures that it will always stay ahead.
But even innovation has its limits. In a world where change is the only permanent challenge, few things can be more important than a company’s name and track record – something that the company has painstakingly built through the years, from the choice of tiles that go into its buildings to the prudence with which it conducts its financial dealings. “Competition is always there, and the only way to really differentiate ourselves is through our name. We emphasize our brand, our reputation in the market. Brand is the one thing that will make us stand out from the rest.”
The RLC brand is something that Deck wants to continuously develop and never tarnish. He explains: “We want to build a brand that is globally recognized and respected; a brand that commands a significant value premium over other products and services offered by competitors. We want our customers, suppliers and business associates to cherish their relationship with RLC and make us their preferred business partner.”
Similarly, it expects no less recognition for its brand in the capital markets. “We want to be recognized as a blue-chip property counter, with strong management, a sound business model, and good corporate governance.”
Brand-building, of course, never happens by accident. Behind every sterling brand is the collective energy and commitment of the people behind it. For RLC, this is no less true. Deck is always profuse in extending his gratitude to the people who have helped him take RLC to where it presently stands. “There is no way we could have achieved this without the RLC team. With the team working together, we were able to build up a real estate conglomerate, and we are very proud of what we have accomplished.”
He adds, with obvious pride, that RLC has the “resources, particularly the management bench, to compete with the larger and more established players.” RLC continues to harness its human capital for maximum results. “To be successful, we have to bring in the right talent, the right management team.” The cycle of motivating them and pushing them towards more triumphs is a never-ending affair.
Deck, of course, is optimistic that RLC will carry on with its great track record. “We had the vision to build the business. We were ahead of the curve. We always see the trend before others see it, and we have been innovating to make sure we are always a step ahead.” Riding high on momentum but anchored by commitment, RLC is all set to outdo itself in its never-ending quest for growth and excellence. //
Published in Personal Fortune Magazine, 2007
Philippine real estate is on an upswing. Drawing strength from the swelling ranks of overseas workers, backstopped by falling interest rates, the real estate sector is sprinting at a pace not seen in the past decade.
Its renewed vigor has spawned a new set of winners, and among these, Robinsons Land (RLC) is undeniably the biggest. With a market capitalization of P55 billion, it is hard to believe that fourteen years ago, RLC was just a one-mall operation, the fledgling in JG Summit’s nest of companies. A decade or so down the road, it has become the indubitable crown jewel of the JG Group in the Philippines.
Those who have witnessed RLC’s remarkable growth in this short span attribute much of this to the efforts of Frederick Go, who recently assumed the twin posts of president and chief operating officer of the company. Under the mentorship of his uncle James Go, Deck has bloomed from doer to leader, his vision and understanding of the market made stronger and deeper by the sheer experience of steering the company towards growth in the face of numerous challenges, including the Asian crisis. Today, under the able direction of his cousin Lance Gokongwei, Deck has definitely hit his stride. Whereas fourteen years ago, Deck, fresh from a stint at the Manila Times, was obsessing over the details of its mall’s theme parks or combing the countryside for a new business opportunity, today, he presides over the collective goals of a group that is poised to leap forward from a springboard of great ideas and a commitment to growth.
“It’s definitely more challenging going forward,” Deck reckons, more so because RLC has crossed the great divide from near-obscurity to veritable market leader. Today, RLC is the second largest diversified real estate conglomerate in the Philippines, with 18 malls, 17 residential subdivisions, 15 residential condominiums, 6 office buildings and four hotel properties to its name. It is the largest office landlord, the second largest shopping center operator, the third largest residential condominium developer and the fourth largest hotel operator in the country.
With total assets of P37 billion, annual revenues of over P9 billion and an EBITDA of P4 billion, plus the highest return on equity among its peers, RLC is not surprisingly the darling of stock market investors. Its high dividend payout policy is another welcome bonus. In fact, the company recently raised P11 billion from foreign investors for a public offering, with the book fully covered even before Deck, along with other RLC officers, had finished with their overseas road show presentation.
Presiding over a dynamic organization comes naturally to Deck, who nowadays finds himself also managing investor relations, as well as helping out in business development and marketing, as the situation commands. Naturally charismatic and brimming with enthusiasm, Deck admits he enjoys his work. “I like the challenge of starting a business, especially when you start with just a concept or idea. There is always the excitement of starting a project and seeing it become a successful reality.”
Buoyed by the dynamism of the real estate sector, Deck is nevertheless not allowing investor euphoria to taint his reading of the market. Instead, he chooses to view things from a safe distance. “This may be part of a cyclical boom; some say it’s just the beginning, some say it’s the middle of an uptrend, and some think it has only a couple of years left” he notes.
Structural changes have helped the Philippine economy recover and expand. Steady consumption growth, rising purchasing power, and enhanced aspirational or lifestyle spending have underpinned the expansion of the real estate sector in the past years, aided largely by developers’ access to cheap capital. Sudden upticks in land prices, however, have also conjured fears of a real estate bubble, dreaded by every developer and investor.
Fortunately, RLC is in a “unique position to manage both opportunity and risk.”
Nimble and quick to the draw, RLC can swiftly spring into action to take advantage of emergent opportunities, without taking its eye off lurking dangers inherent to the real estate sector. Deck recognizes that agility and resilience are hallmarks of RLC. “What matters is that as a company, we are not just ready to take advantage of opportunities that may arise, but have the ability to mitigate risks along the way,” he says.
Recurring income from RLC’s office, mall and hotel operations evens out the erratic income stream from the development business. Ideally, Deck points out, “development income and recurring income should be balanced.” RLC’s clean balance sheet, with zero net debt, gives the company a host of alternatives. “We are open for more gearing,” Deck discloses, pointing out how RLC “manages for the allocation of resources, to make sure the portfolio is balanced.”
Given the current trend, RLC will, in all likelihood, take a more aggressive stance going forward. “The economy looks good and the global investing world is looking positively at the Philippines, something that has not happened for a long time. The outlook appears bright. It’s our job to capitalize on these opportunities.” He identifies the leisure and retirement business as a field replete with opportunities.
The blueprint of growth entails a keen eye for detail – something that Deck has harnessed in all the years he has been in the industry, meeting with those who make the business move -- draftsmen and architects, investment bankers and stock analysts, salesmen and brokers. This is doubly important because he also manages the Gokongwei family’s private property business in China, consisting of large-ticket projects in Shanghai, Xiamen and Chengdu.
Building the company in this increasingly turbulent global environment requires much from any corporation, and RLC is rising up to the challenge. Deck realizes that past corporate successes are not indicative of future performance. On the contrary, they simply spawn copycats who can easily duplicate a company’s success. RLC’s innovative spirit, though, ensures that it will always stay ahead.
But even innovation has its limits. In a world where change is the only permanent challenge, few things can be more important than a company’s name and track record – something that the company has painstakingly built through the years, from the choice of tiles that go into its buildings to the prudence with which it conducts its financial dealings. “Competition is always there, and the only way to really differentiate ourselves is through our name. We emphasize our brand, our reputation in the market. Brand is the one thing that will make us stand out from the rest.”
The RLC brand is something that Deck wants to continuously develop and never tarnish. He explains: “We want to build a brand that is globally recognized and respected; a brand that commands a significant value premium over other products and services offered by competitors. We want our customers, suppliers and business associates to cherish their relationship with RLC and make us their preferred business partner.”
Similarly, it expects no less recognition for its brand in the capital markets. “We want to be recognized as a blue-chip property counter, with strong management, a sound business model, and good corporate governance.”
Brand-building, of course, never happens by accident. Behind every sterling brand is the collective energy and commitment of the people behind it. For RLC, this is no less true. Deck is always profuse in extending his gratitude to the people who have helped him take RLC to where it presently stands. “There is no way we could have achieved this without the RLC team. With the team working together, we were able to build up a real estate conglomerate, and we are very proud of what we have accomplished.”
He adds, with obvious pride, that RLC has the “resources, particularly the management bench, to compete with the larger and more established players.” RLC continues to harness its human capital for maximum results. “To be successful, we have to bring in the right talent, the right management team.” The cycle of motivating them and pushing them towards more triumphs is a never-ending affair.
Deck, of course, is optimistic that RLC will carry on with its great track record. “We had the vision to build the business. We were ahead of the curve. We always see the trend before others see it, and we have been innovating to make sure we are always a step ahead.” Riding high on momentum but anchored by commitment, RLC is all set to outdo itself in its never-ending quest for growth and excellence. //
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