TECH4GOOD
Monchito Ibrahim
It is not only the concept of work that the advent of the internet has disrupted. It is also beginning to change, in very profound ways, the way we look at how business is conducted especially for micro-enterprises. The internet gave birth to a recent phenomenon called digital platforms which perform much like a marketplace does except that much of it is done virtually. They came in very handy during the recent lockdowns and allowed most of us to carry on with life amidst the restrictions brought about by Covid. And we are beginning to see a big shift in customer behavior toward online shopping.
From the perspective of micro and small businesses, especially those who are just getting into business, the rise of digital platforms offers a tremendous opportunity for them to either easily start a business or sustain one that has been greatly affected by the pandemic. These platforms have taken down most of the barriers associated with starting a micro business like the need for capital to set up a brick-and-mortar store and reach target customers. Today, we see tens of thousands of micro-businesses spread in all parts of the country selling their wares on digital platforms like Lazada. During this pandemic, digital platforms have indeed become a critical lifeline for many Filipinos who now have found a decent way to bring food to the table. They do not even have to worry about most of the intricacies of running a business. Customer interfacing, ordering, logistics support, payments, targeted advertisements, and even control over the interplay of supply and demand through algorithm-based matching systems are usually handled by the platforms for them.
For existing enterprises, these platforms open new sales channels and facilitate access to new customer groups thereby creating new revenue streams in addition to business generated from physical stores. It is also helping them integrate into global markets. So, while operating from a single location, they can also serve customers across the country and the globe.
Entrepreneurs using digital platforms usually need only to worry about pricing, differentiating themselves from competitors, their inventory, compliance with delivery and quality commitments, and maintaining customer satisfaction and retention.
Micro, small and medium-sized businesses today depend greatly on digital marketing to find audiences for their products and services, market them effectively and efficiently, and convert them into customers to grow their business. Most of them would usually start by using their social media network to widen their market reach. Beyond that, reaching out to an audience by sending emails, phone calls, or pushing marketing messages can be a tiresome task for MSMEs. But thanks to the search algorithms of digital platforms, attracting the right audience has become much easier.
Using digital platforms does not only result in wider reach, easier entry, and lower operational costs for MSMEs. These platforms do not sleep, therefore allowing businesses open for new orders and customers 24x7. They can also help these enterprises manage their online business reputation which is a critical element of running and sustaining an online business. Customer reviews can make or unmake online businesses and platforms can help their merchants mitigate bad reviews by getting into the real reasons for the low ratings. The merchants are therefore provided with the necessary feedback to help them address those issues.
A service feature that is really helpful to MSMEs who are on digital platforms, and most especially their customers, is delivery tracking. The platform provides the customer with real-time information on the delivery status of their orders. On their own, MSMEs would find it very difficult and costly to set up a delivery tracking solution for their customers.
MSMEs have never had greater access to the online market thanks to everyone's fast-changing digital lifestyles, engaged consumers, the quick onboarding process for merchants, and easy-to-use platforms and tech tools.
It is no secret that one of the major reasons that made China the economic power that it is now is the development of its SME sector. And platforms like Alibaba and even Amazon and eBay provided them with the online channel to easily widen their market reach outside of their domestic space. Of course, their government played an important role as well by providing the right digital infrastructure and enabling environment that allowed their SME sector to really prosper and become a critical economic development driver. And the same growth strategy is now being adopted in many global markets. There is no reason why the Philippines should not adopt the same.
We live in a time when the internet is an integral part of our lives. Whether it is about researching before purchasing something, or, knowing the best route to our destination, the internet covers it all. We are moving toward a world that is internet dependent. Philippine MSMEs should take advantage of this.