Tuesday, December 16, 2008

Home for the Holidays, Part 3: Consumer Economics, Philippine Style

It has often been said that the Christmas season is the mother of all retail seasons, and nowhere is this more true than in the Philippines. First of all, being a predominantly Christian country, almost everybody celebrates Christmas here. Second, the season stretches for months: the Christmas season informally starts in September (start of the “-ber” months), when radio stations start playing Christmas carols, then hits full swing after All Saints’ Day (November 1st), when households start putting up their Christmas trees, then formally ends on the Feast of the Three Kings (first Sunday after New Year’s Day). Third, and probably most important from an economic standpoint: the money comes pouring in during the holidays, specifically during December. I am not sure if this is true for other countries, but in the Philippines, workers get a “13th month” pay that is guaranteed by law. This is usually given along with the first or second paycheck (December 15 or November 30—workers get paid on the 15th and end of each month) before Christmas. In addition, some companies also give “Christmas Bonuses” that may range from half a month to a few months’ worth of salary.

A fourth—cultural—factor that heavily influences the way Filipinos celebrate Christmas has to do with the Catholic practice of godfathers and godmothers. As with Catholics in other countries, Filipino parents designate a godfather and godmother during the baptism of their child. The main difference, however, is that in the Philippines it is customary to have not just one, but multiple pairs of godfathers and godmothers. For example, it is not unusual for a child to have, say, six pairs of godfathers and godmothers for baptism, and probably a few more during his/her confirmation. So what does this have to do with Christmas? Well, in the Philippines it is also customary for godfathers and godmothers to give “aguinaldos” (presents) to their godchildren during Christmas. On Christmas Day, it is widely practiced that parents would accompany their children to visit their “ninong” (godfather) and “ninang” (godmother) to catch up on events during the past year, and of course to get their Christmas presents.

These four unique characteristics of the Philippine Christmas Season make up for the perfect recipe of a retailer’s dream. When going to the malls during the Christmas Season, brace yourself for a barrage of humanity (the mere sight of which causes headaches), Christmas carols endlessly blaring through mall speakers, and shopping bargains and “special offers” left and right. While all of the hullabaloo might interest a visitor, it gets pretty tiring after a while, even to the bravest of shoppers. Some things to keep in mind when shopping in the Philippines:

  • Cash is King. Never mind what the commercials say in the U.S. that paying by cash slows everyone down. In the Philippines, paying by credit card actually takes longer because it takes about 86 steps to verify your credit card account (remember, this is a third world country, after all). So paying by cash is the fastest and most efficient means of transaction, even in established stores. Plus, some mechants may charge a higher price if you pay by credit card, whereas they sometimes give discounts if you pay by cash.
  • If you are not in a mall, chances are you can negotiate for a better deal. Don’t be shy to ask if the price on the tag is the final price; most probably the vendor will give you a “final” price, which is almost always still negotiable. Or ask for a volume discount when buying more than one item. Only when the seller says it’s the “final price” or when they give you a better offer when you attempt to leave the store will you know that you’re getting the best price that the seller can offer.
  • When in the grocery, don’t think big; think small. In the Philippines where majority of the people live on a day-to-day basis, almost everything can be bought in smaller quantities. Coffee can be bought in sachets. Toothpastes can be bought in sachets. Soaps can be bought in smaller boxes. If you only need a small quantity of something, just ask; chances are they have it.

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