Philippines startup ecosystem is “Bang for Buck”, watch out: FaB Manila emerging
Barely three months since its launch, FaB (Fashion and Beauty Tech) Manila held the second meet-up last October 5. The event showed unique insights of entrepreneurs, difficulties they face, and how they overcome them.
It was rather a small and intimate group. Perhaps no more than 30 participants in attendance.
The newest chapter in the global community of FaB, but not less ambitious and aggressive, is Manila.
The speakers were strikingly warm to each other, like old friends who have just been reunited. In the panel, they were expressive of how they hold each other in high regard — cheering for one another, acknowledging, frequently nodding in agreement, yet respectful when varying in opinion.
It’s easy to surmise that this may have been the way FaB, then known as #BeautyTech, was born. Founded and still lead by ex-Lancome CEO Odile Roujol in San Francisco, a group of female investors, founders, and entrepreneurs who find themselves in the intersection of beauty, fashion and technology regularly met and came together to mentor, empower, and share learnings with each other.
This spirit of collaboration and empowerment is exactly why FaB Manila host Minrie Macapugay started one in the Philippines. A bold move, considering Manila’s start-up ecosystem is substantially far from the maturity of its counterparts in San Francisco, Paris, New York or Tokyo, and more so, the country’s fashion and beauty tech scene.
Young, persistent, and energetic, Minrie is an engineer and start-up founder who envisions FaB Manila as a hub where the local movers and innovators of fashion, beauty, and technology meet, ignite ideas, and pave the way for the development of the next great innovation.
“There are local start-ups who are also integrating tech but not specifically a lot in the fashion and beauty industry that’s why we wanted to make sure that these brands who are tech-enabled, they will be fashion and beauty tech start-ups in the future,” she said.
Her optimism is not without a basis. In the 2019 Global Startup Ecosystem Report, Manila was named one of the top Activation Phase Ecosystems in the world, top 10 in the global ecosystem for “Bang for Buck” and top 5 in Activation Ecosystem for Connectedness. It also recognized “experienced tech talent” that allows founders to form a competitive team and “startup support” stemming from recently passed laws that “foster an innovative entrepreneurial culture.”
While lagging from its Southeast Asian neighbors, the Philippines numbers still point to growth. In a separate report by research center Startup Blink, the Philippines’ startup ecosystem jumped 16 slots to place 54th out of 100 countries in the world. It was also reported that over $100 million investment was poured into start-ups in less than three years outpacing Singapore and Indonesia.
It is important to note that this is not an easy feat. On top of the normal challenges entrepreneurs face, Filipinos also have to deal with the realities of an emerging market economy: political corruption, economic instability, widening wealth and social inequalities, and poor physical and financial infrastructures — that can very well stop any person from starting any business.
Filipinos are very social by nature. This translates easily into the digital world. Of the 76M active Internet users, 75M is on Facebook. They also top social media use for its fourth straight year with 4 hours and 12 minutes daily, about two hours above the global average.
In fashion and beauty tech in the Philippines, there are no personalized serums or smart make-up printing tools being developed yet. It is more apparent how companies currently prioritize the personalization of customer engagement and experience in social media networks and platforms.
At FaB’s second meet-up, a large part of the discussion revolved around how social commerce is reinventing the rules of retail.
Panelist Ron Baetiong, founder and CEO of Chatbot PH , talked about the importance of conversational commerce. His company helps startups automate responses in FAQs like “hm po,” a polite, abbreviated form of “How much po?” often seen in the comments or messaging section of brands’ social network accounts. For lean start-ups, this already alleviates an enormous amount of work.
In the event, he said, that the bot gets “shookt,” that’s where the human hand-off takes place.
“Common questions like, “Where’s your location? HM is this?” a bot can do that. But all of a sudden, (when a user asks) “Do you think my waistline would look good at this?” Obviously, no matter how you treat a bot, that cannot be handled by a bot yet at this moment,” Ron added.
For StyleGenie founder and CEO Abbie Victorino, the first step of being “conversational” is very important in building that trust between the customers and their brand. They use this tone in a quiz to get to know a customer who is about to avail of the service.
“Aside from making it very easy for the customers, for us, brands, since we’re building that trust, we want them to feel like they’re talking to an actual person or stylist.”
StyleGenie provides online personal styling. Their users can get a one time or monthly subscription of clothes delivered to their doorstep.
She advised startups to use the free tools offered by social media networks like polls and surveys to get to the bottom of customers’ needs and desires.
In the same panel, founder and CEO of Great Deals Corp Steve Sy, also hailed by his co-panelists as an “e-commerce god,” noted that customers are no longer happy with just photos of products. He said people are looking for authentic engagement and this is achieved in live streaming.
Users can directly talk to the sellers and click “Add to Cart” immediately on the app whether on Facebook or the top marketplace platforms like Lazada and Shopee.
“The beauty of it is that the host answers all the comments during the live streaming so it’s really interactive,” Sy said.
He said live stream allows them to do a lot of promos, for example, “In the next five minutes, you get a gift.”
According to EMarketer in its “Global E-commerce 2019,” the retail e-commerce sales growth in 2019 in the Philippines is a whopping 31%, third highest in the world.
Its online growth in online fashion spend is at 17%, the same as the global trend.
However, Diego Buenaflor, CEO of Ellana cosmetics and co-founder of FaB Manila chapter, asserted, “There’s a market out there that’s quite large that’s not being calculated on how big it is in the social commerce segment — where people are selling to individuals through messaging apps from Viber to WhatsApp to Messenger, even in direct messaging on Instagram. And this where Filipinos are more comfortable with — person to person interaction.”
Ellana Cosmetics is one of the leading mineral make-up brands in the Philippines. It produces natural cosmetics for all skin types, particularly for Southeast Asian women.
For Buenaflor, the gamechanger for e-commerce is “COD,” short for cash on delivery, which now comprises 80% of the business.
This shows how Filipinos were able to adapt and engage in social commerce despite being unbanked.
As of 2019, only 35% percent of the population is banked, while barely 2% own a credit card.
Attendees asked for tips on how they can successfully start their own businesses and lead a more conscious yet affordable organic lifestyle.
For Mikee Federizo, Managing and Marketing Director of Linea Organica, she advised, “My dad told me that you can make an ocean of your own. For example, for us, I don’t consider ourselves part of the beauty industry anymore. We want to be in the organic industry”, explaining the importance of establishing a corporate perspective and position.
Shiela Fuentes, founder and CEO of ForthCo.Ph on her part advised budding entrepreneurs not to be afraid to start small.
It is better, she said, that a big number of people are trying to lead a zero-waste lifestyle imperfectly than just a very few people doing it perfectly. An organic life is possible for anyone.
Text: Christine Roque