MANILA – Philippine-based startups consider entering new foreign markets in the next three to five years, according to the Philippine Startup Survey of Isla Lipana & Co./PwC Philippines and QBO Innovation Hub.
In a press conference Wednesday, PwC Philippines Chairman and Senior Partner Alexander Cabrera said that 61 percent of local startups entering new territories outside the Philippines would be their strategy to grow their business in the next three to five years.
Cabrera noted that this is unusual for the regular brick-and-mortar business, which mainly focused on the core market.
“Our regular brick and mortar business will not say that. Our regular brick and mortar business will stay focus(ed) on your core market. And if your core market is in the Philippines, do that,” he said.
“The startup is not so obsessed about what is my core market. They are so obsessed about the potential of their product. And this is something that should be understood, that startups have this natural tendency or desire to go regional and go global with their business,” he added.
Cabrera said that while tapping foreign markets, startups will still continue operating in the country.
“We need to realize that if they go regional, they don’t drop the Philippine market. In fact, a number of these startups choose the Philippines as a base from which they operate because of lower cost of doing business, lower cost of living,” Cabrera said.
“Before they go global, they take regional. In fact, more than 50 percent are looking at localities in the Philippines,” he noted.
The survey also showed that top markets where Philippine startups aim to launch their businesses are Indonesia, Thailand, Malaysia, Vietnam, Singapore, and Myanmar.
“It is getting the most of what you can get in the region, which is also a bigger market,” Cabrera said further.
Moreover, PwC Philippines Deals and Corporate Finance Managing Partner Jade Roxas-Divinagracia said it is positive to note that local Filipino startups aim to compete in the global market.
“What we aim for is having startups that are ambitious, that are looking to grow and looking to expand globally. And that’s how Filipino businesses should be, competing elsewhere and not just in the local market,” she stressed.
Improving products and services, unveiling new ones
Aside from tapping market outside the Philippines, local startups’ strategies for growth in the next three to five years include improving existing products and services as well as introducing new products and services.
The survey also showed that over 50 percent of startups today were founded in the last three years, implying rapid growth in the number of startups from 2015 up to this year.
Among the factors that helped the startups to grow here are available market, availability of talent, and low barriers to entry.
However, top challenges for startups when starting their venture include capital requirement, regulatory requirements, and general economic and business conditions.
For Department of Trade and Industry (DTI) Undersecretary Nora Terrado, the government is giving priority to improving regulations that will ease doing business in the country, while pushing legislation in the Congress to make the market more conducive for startup.