Philippines and Indonesia: OSAVE

From 2021 to summer 2025, we advised investors and management of OSAVE in the implementation and development of the Hard Discount organization in the Philippines and Indonesia. We also helped to bring close to 50 import items like coffee and cooking oils from Malaysia and European wines and beers into the assortment as not always suitable local suppliers could be found – all of these products being Private Labels or Exclusive Brands with higher quality and better cost than local Commercial Brands.

In the Philippines, more than 500 stores and 4 regions were opened in the above-mentioned period, in Indonesia at least about 100 stores. In the Philippines, this had to be accomplished under special circumstances as already one competitor was rolling out a discount concept with some head start.

Independently from the special competitive environment in the Philippines, this was accomplished with the usual methods and principles: The organization was developed based on the greatest possible decentralization and a high degree of autonomy for the regions.

The head office essentially consists of the central purchasing department and a small finance department with a focus on cash flow planning, reporting and aggregation of the regional monthly and annual financial statements and other figures. Staff functions are almost completely avoided.

As in all our discount projects, the usual staff functions are delegated to the regions. Selected managers take on important additional tasks for the entire company, for example:

• One region takes over the selection and negotiations on trucks for the logistic organization of all regions.
• In the same manner, individual regions are responsible for the procurement of other important assets and equipment like freezers and pallet trucks.
• Another region organizes company-wide advertising with flyers and posters.

Finally, the regions are also allowed to have up to ten regional articles of their own, which they decide on and negotiate independently. In some cases, this results in successful articles for the standard range. With many own brands and imported items, local brands are also generally outperformed in terms of quality and often significantly undercut in terms of price.

If OSAVE follows the principles of the hard discount model, they will become the market leader in both countries in the foreseeable future – that is only a matter of time.

Nils Brandes, May 2025