It is the second largest ASEAN nation of 102 million people and, similar to Indonesia’s geography, it has thousands of islands that forms the nation of the Philippines. An estimated 2.3m Filipinos are working overseas, bringing home US$26.92b worth of remittance in 2014 and helping the country spur its economic growth.
With a GDP of US$2,728 per capita and a well-educated English population, it is a country that is ready to expand and become a great consumer market. So how does one understand the Filipino market? And what challenges abound as a startup? I asked Filipino startups for their insights.
Photo credit: PINOY PHOTOGRAPHER
Understanding the Filipino consumer market
A digitally savvy nation
Francis Uy, founding CEO of Mobkard, a mobile loyalty and discounts platform, talks about the behaviour of Filipinos. He said, “We are the social media capital of the world (at one point and probably still is) and the mobile texting capital of the world. This is an extremely social market. It is also a cash economy with a low single digit credit card penetration rate. Filipinos are also relatively young (average age is mid-twenties) and have a bigger population growth than most Asian countries.”
Chino Atilano, CEO of TimeFree Innovations, Inc., a virtual queuing solutions company that offers customers the convenience of getting a virtual queue number before arriving at the store, notes that Filipinos spend a larger chunk of their time online compared to other nationalities. He finds that more are also accessing digital content from their smartphones compared to from laptops and desktops.
It becomes attractive for startups (especially B2C startups) to capitalize on this consumer behaviour and is now imperative to develop a mobile app or a mobile-friendly website or application to take advantage of the Filipino consumer behavior in order to gain more traction.
Conservative finance vertical
Jp Bisson, CEO & co-founder of LoanSolutions, comments on the credit finance industry, “Compared to the rest of Southeast Asia, the Philippines has yet to be really disrupted by tech companies. The finance vertical is extremely conservative for several reasons, one being that there is no centralized credit scoring available to them. Credit investigation is a very long process and the need to produce a lot of documentation is necessary for borrowers to be granted a loan.”
In his observation, getting a loan from legal financial entities in the Philippines is difficult, which leaves Filipinos disgruntled and left with the option of securing a loan with a loan shark or other high interest lenders. To this end, his company’s vision is noble, which is to give better financing options to all Filipinos and put an end to loan sharking in the Philippines.
Active nightlife scene
How about the nightlife scene? Ron Baetiong is the founder and CEO of Partyphile, an app that allows one to discover and get access to the best parties, events and nightlife hotspots in the city. The born-and-raised Manila entrepreneur elaborates on the Filipino culture of socializing.
“Filipinos love to celebrate. Regardless of what social status one is at, Filipinos like to spend time with their friends and have fun. With the growing middle class and young workforce with a high disposable income, there’s no better place to do that than having an epic night out. Filipinos will always find a way to have fun and mingle, the only difference is how they do it.
One perfect example of how crazy the Philippine market could be is this: during the months of June to November (our rainy season where typhoons bombard us every week) people will still flock to big raves, even when it is already flooding.”
Operational challenges of operating in the Philippines
The state of the Philippines startup ecosystem
Advice to startups
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