Top 5 Small Business Trends in 2020: What you need to know
The Philippine business landscape has been shaken this first quarter of 2020 — From the Taal eruption in January to the COVID-19 pandemic in March. Businesses have continuously been floored by different external factors. The question now arises, how can businesses especially the millions of small and medium businesses (SMEs) bounce back from these unprecedented circumstances?
Luckily, we don’t need to look too far, the SME ecosystem here in the Philippines has transformed throughout the years. There have been ongoing or latest trends that have shown that Philippine SMEs are adaptable and also resilient during times of fast and ever-shifting environments.
For example, In 2018, we saw the shifting landscape of mom-pop-stores going fully online. Their inventory was easily kept inside their homes and all the selling was done in social media or other e-commerce sites. With the advent of technologies like this, people saw that they can start and run their businesses with low capital, minimal operating expenses and with few workers.
To adapt to these tough moments, we must look into five small business trends that have guided our SME owners for years and continue to drive the business landscape in the Philippines.
1. Strengthen Social Media Visibility
There is no doubt that social media is one of the best marketing/advertising tools for small businesses. It’s low cost, easy to get insights from and it can reach a very wide audience. In 2020, social media will continue to be a business trend and tool for businesses to reach out to their customers. Imagine, when you create a business page on Facebook, you can easily pick out which demographics in a certain city will be able to see your ads.
Within the social media space, another avenue has been continuously growing and being used by multinational brands which is the hiring of influencers/vloggers. Based on a study done by StarNgage, 71% of consumers use social media as a reference before considering buying a product/service. Using their platforms, influencers/vloggers create a first-hand experience review and this encourages consumers to value their opinion on products/services.
During this pandemic, everyone is browsing various social media platforms and this is the perfect time for small businesses to create or strengthen their social media presence. For example, a business owner posts a personal video message to all their consumers/clients saying that they will be there during and after this crisis. The Filipino expression of “malasakit” is one of the strongest emotions that we can relate to and using social media to spread this message to your target audience will make a lasting impression on your target market[CM1] .
2. “04.04 Sale AGAIN?” - Join the E-Commerce Bandwagon
Every month, big E-commerce providers have their special sales. If you’re counting the frequency of their storewide sales, there’s no doubt they can now be compared to the promos of big shopping malls. These promotions have increased the traffic of consumers to their websites and business owners have utilized the continuing reliance of people to these e-commerce providers. For an owner who doesn’t have time to manage their website, or who doesn’t have the logistical and financial capability of setting up their own e-commerce platform[CM2] , they can easily enroll in these e-commerce platforms like known players; Lazada and Shopee.
As a small business, you can use the influence of Lazada and Shopee, who are currently the top e-commerce platforms in the country to sell your product and they will facilitate all logistics and payment concerns for your business. As stated in Shopee’s website, “Shopee provides the right tools to support all our sellers on our marketplace platform. List your products in less than 30 seconds...” For additional reference, based on a breakdown by Cjango Web Solutions, the top 3 listings in Lazada are Mobiles and Tablets, Home and Living, and Fashion.
Current circumstances have limited the services of these e-commerce players as the current provisions of the enhanced community quarantine only allow movement of necessary goods/services. However, this sector has also shown its diversity and timely evolution. It wasn’t clear before how marrying the supermarket and e-commerce will flourish but now, they are as relevant as ever. As the social distancing orders were executed, the millions of middle-class Filipinos needed an alternative to getting their necessities. It was a lucky break for supermarket E-commerce players as they were given the perfect opportunity to serve their fellow Filipinos.
3. Just Grab it!
There is a high probability that when you order via a small business’ website/social media the means for you to get your order will be via Xend, Ninjavan, Lalamove or Grab? The emergence of these various logistic services has made it easier for a lot of small business owners to run their operations. They no longer need to worry about fixing their logistics platform or maintaining their delivery vehicles. As more players come in, there will be more choices for small business owners to decide which provider they can use or even to use multiple providers depending on the availability of the riders. The innovation in this industry was adopted by big international logistics providers. These recent players also provide real-time updates and on-demand delivery above anything else.
This industry also transformed to not only delivering packages but also to becoming an extension of the restaurant industry. In 2019, we saw the increasing number of restaurants and people getting their daily fixes from Foodpanda, GrabFood or LalaFood. To get an idea of how this sub-industry has grown, Foodpanda Philippines launched their service in 2017 and based on their website, they now have 1000+ partners nationwide. Perhaps this is the reason why it continues to be a part of the latest small business trends.
These past weeks have highlighted the importance of this industry. As instructed by the Department of Trade and Industry, logistics providers are still allowed to operate during the enhanced community quarantine and prioritizing the movement of essential goods like medical supplies and food. These food delivery companies are continuing to operate and most importantly, big or small restaurants are still able to serve their consumers and earn income during these trying times.
4. Take Advantage of Fintech
Fintech has been the hottest trend in the start-up/banking scene back in 2019 but we need to get the conversation around Fintech out there more, especially during this time. Non-business owners would have a smaller degree of affinity with Fintech and would probably be familiar with digital wallets and other B2C platforms, but that’s just half the scope. Financial technology or fintech simply means making the existing banking/financial products easier to use or avail of using technology.
Fintech is still in its early stages but this industry will just keep on becoming relevant as more innovations are being done. One example is how different data points can be used to check if a Filipino without previous banking history is qualified to start using a checking account. As this was an example given in a World Economic Forum article, “…Mixing non-traditional and traditional data points for credit scoring, fintech innovation has been able to create a reliable alternative credit score for previously unbanked individuals.”
Small businesses have a lot to gain from the emergence of these technologies; from being able to accept different forms of payments online, to starting a business’ credit score in the Philippines and to even getting uncollateralized loans. To learn more about online loans and fast business financing with First Circle you can click here. As this trend further develops, small businesses must remain open to possibly getting their loans or payments completely online. It is clear that fintech is here and consumers are beginning to take notice of it. Business owners must not start adapting their modes of payment to this ongoing boom.
The current pandemic in our country has also shown the adaptability of these technologies. As the cashless movement continued to expand in 2019, some businesses or organizations have used this technology to accept donations for their planned effort to help our front liners. Now, if you want to donate, you would just scan the OR Code of the organization then transfer the money to them. No need for over-the-counter bank deposits or filling out those confusing bills payment slips.
5. Excellent Customer Experience
Customer experience has been an upcoming concept in the world of business. Western companies have adapted this idea and in-grained it in their overall processes. Providing good customer experience doesn’t just mean making a product that a customer wants. An article from McKinsey & Company puts it best, “Understanding the customer journey is about learning what customers experience from the moment they begin considering a purchase and then working to make the journey toward buying a product or service as simple, clear, and efficient as possible.”
For a Filipino, it sounds familiar to a word that was used earlier in the article - “malasakit” or empathy. In simplest terms, having excellent customer experience means you show empathy to your consumers/suppliers. As the example given earlier, as a small business owner, if you have clients that you can’t currently serve due to the enhanced quarantine in your area, show some “malasakit” and again this will come a long way for your business.
By no means, these business trends for small businesses or SMEs are the only ones trending in our country. There are still others that are brewing or even those that are no longer applicable. These trends, however, have been observed as the key drivers of growth across all industries in the Philippines. As this article is being written, we are hit with another unprecedented catastrophe that is wrecking the small businesses in the country. Let this list be a guide of what you can do to sustain your business right now and eventually, move forward when the crises end.