For micro, small, and medium enterprises (MSMEs), breaking out and scaling up is an obstacle that can only be hurdled by embracing the multiple online channels where consumers can now be reached, according to speakers at a webinar on Wednesday.
Constantin Robertz, chief executive officer of logistics platform Locad, said that “product, price, promotion” are the three fundamental things in growing an e-commerce business. The hidden fourth would be the back-end work of seeing to all three.
“Online storefronts and channels like TikTok and Instagram help with reaching consumers across channels, but integrating these [to your business] is the challenge,” he explained. “Seamless logistics integration is key.”
MSMEs in the Philippines make up 99.5% of business establishments, employ 63% of the country’s workforce, and 40% of the country’s GDP in the past few years, according to 2021 data from the Department of Trade and Industry (DTI).
However, many are unprepared to embark on digital transformation, something the DTI aims to address with the recent issuance of a self-assessment tool to guide MSMEs.
“If you’re doing this on your own as an entrepreneur, it’s all-consuming and the risk for MSMEs is that you get so deep in the operational rabbit hole that you don’t have time to take a step back and develop the business,” added Mr. Robertz.
For Aencille Santos, founder and chief executive officer of exercise equipment store Manila Athletica, consistency was almost the downfall of her online business.
“It’s easier for bigger brands because they have a budget, but as a small business owner, you don’t have the resources to manage all of that,” she said.
When the brand grew such that it started receiving 20 to 50 orders a day, the usefulness of logistics integration provided by Locad was a huge help, especially since there were other essentials to see to like admin work and marketing.
Alexander Friedhoff, co-founder and chief executive officer of e-commerce enabler Etaily, suggested looking into multi-warehousing, which is a smart way to fulfill needs for those scaling up.
Online-to-offline (O2O) strategy, which is about integrating online and offline channels, is a perfect fit for Philippine-based MSMEs as well.
“The Philippine landscape just by itself is so wonderfully positioned,” he said, citing the 2021 e-Conomy SEA report by Bain & Company, Google, and Temasek, which found that 95% of consumers will continue to use at least one digital service post-pandemic.
“The median age of the Philippines is 25 years. There’s high internet penetration. We see developments regarding the average hours spent on social media,” he added.
Meanwhile, Ms. Santos’ biggest tips to MSME owners were to be authentic in terms of online presence, to attract consumers who now prefer relatability rather than perfection, and to be meticulous about the end-to-end consumer experience.
The same 2021 study found that seven out of 10 consumers in the region rate delivery as the most important factor in online shopping.
“Every touch point in the entire shopping experience must be a priority,” she said. — Bronte H. Lacsamana