Buy and be merry

The Toy Kingdom branch in my part of town was packed with shoppers last Saturday, payday weekend.

The crowd at the shopping mall itself looked to me like the usual size with less than four weeks to go before Christmas. And the people, many with children in tow, seemed to be actually buying, not just window-shopping.

Outside the mall the traffic built up to its usual holiday nightmare proportions by mid-afternoon.

It will take an unusually tight cash crunch for our consumer-driven economy to go into a recession. We part so quickly with our money, no matter how much time, sweat and tears went into earning it.

We smile at spendthrifts and frown on tightwads. Maybe the Christian teaching that it is better to give than to receive has become deeply ingrained, and generosity is a cultural trait.

Or maybe our spending habits are driven by more practical considerations: we think we must shop and be merry today, for tomorrow, as sure as the sun shines, prices would go up.

The only product where this has not been the trend is fuel. These days, like most other people, I wait until the last moment possible to replenish my LPG and refill my gas tank, even if the fuel warning light is nagging me to gas up.

But because fuel is such a basic need, that type of buying trend will not affect oil companies’ profit margins. We will still keep gassing up, even if we delay our consumption. As we have seen in this year’s fuel crisis, what could kill fuel demand are high prices. Many motorists simply stopped using their cars and used mass transportation.

We have a weak savings culture – something retailers and manufacturers surely appreciate. In the land of world-class shopper Imelda Marcos, there are Filipinos who are still shopping till they’re dropping amid the global slowdown. The goods may not be of the same price and quality as those preferred by the likes of Imeldific, but we make up for it in volume.

A foreigner friend who writes business news said this is a good thing, especially if other countries have similar buying trends, because it will ensure markets for export-driven economies such as China.

Analysts are closely watching the effects of the global recession on China, fearing that a slowdown in that country could worsen and prolong the meltdown in a virulent spiral. The melamine scandal has already been a disaster for the Chinese food industry. Now dropping global demand is shutting down other factories across China. With joblessness comes slower local consumer demand.

In this type of environment, the Pinoy’s spendthrift ways – though our budgets may be limited – can actually be good for the economy.

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In the United States, different news organizations had widely divergent assessments of the American buying trend on Black Friday – the day after Thanksgiving when giant retailers offer store-wide sales, signaling the start of the Christmas shopping rush.

From the markedly contrasting reports, the trends must have varied at different states. Some reports said the sales volume did not seem to be affected by recession fears. That poor Wal-Mart security guard who was trampled to death by shoppers who rushed in at opening time showed that everyone still loves a good bargain.

But other reports noted that while the size of the crowds seemed undiminished, people generally went for cheaper items. People still bought gifts for everyone but reduced their shopping budgets.

Analysts are monitoring the holiday shopping trend in the United States, Ground Zero of the global financial crisis, for a good indication of what’s in store for the world economy in 2008. If Americans are still buying despite the recession, there’s hope that the slowdown won’t last too long.

In the Philippines, the holiday shopping season as usual started early, with the onset of the “-ber” months in September.

That is also the time that our millions of workers overseas start sending home Christmas shopping money. The exponential growth of our retail sector, particularly the SM mall chain, owes a lot to the remittances of our ever-growing army of overseas workers.

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If buying trends favor downmarket products, that should be good news for export-driven economies in the developing world, which can churn out their versions of many products made in wealthy countries at half or even one-fourth the price.

In this period of recession, budget-conscious consumers may be more open to trying out affordable products made in developing countries.

The hard times may even boost the market for generic drugs. India is ahead in this game, with its rapidly developing local pharmaceutical industry. Bangladesh – that’s right, Bangladesh – is catching up, though it may need some help in marketing the Bangladeshi brand in terms of drug efficacy. Sure people will buy cotton shirts made in Bangladesh. But paracetamol?

China is also in the game, but like many of its industries, this one needs better regulation. No one builds his brand on fake Viagra.

In these difficult times, people may put off plans for big-ticket purchases such as real estate or a brand-new car. Recent news reports said global retail sales for luxury brands have dropped. People may also put off major vanity plans, such as liposuction and breast augmentation.

But regardless of our financial situation, we will still need to eat, drink, travel, get medical treatment, observe personal hygiene, go to school, communicate and exchange information, be entertained, and care for our pets. There are millions of products that meet those needs.

What can we sell to a world in recession?

There will be many losers in this global slowdown, but there will also be winners. As the Chinese like to point out, there is an opportunity in every crisis. We can position ourselves to be among the winners.