Last month, the Department of Trade and Industry (DTI), facilitated a webinar educating Philippine exporters regarding the “untapped potential of Latin American markets,” which they can pursue amid the global recession. During the webinar, Export Marketing Bureau president, Senan Perlada, shared that electronics comprise 66% of our merchandise exports; while we lead the world in dessicated coconut imports to Latin America. The Philippines exports 80% of the world’s demand for this specific food product. He says there’s a big opportunity to export more in products like high value electronics, motor-vehicle parts, home decor, furniture, accessories, and other coconut byproducts.
Thankfully, there are vehicles that can help facilitate business sustainability, even expansion plans. One way this can be made possible is through exports. Exporting might seem like something that only big companies can do, but that’s not the case. Micro, small, and medium enterprises (MSMEs) can also grow tremendously if they can find overseas customers who will be willing to buy their products on a consistent and continuous basis.
For entrepreneurs who intend to export Philippine-made products, this is indeed good news. Thanks to the sizable Filipino diaspora community spread out all over the world, nostalgia for homegrown products is historically a big contributor to the demand for Philippine goods abroad.
If you’re still a bit hesitant to dip your feet into the waters of exporting, here are a few great reasons to make it your next venture.
Exporting Improves Your Profitability
One of the primary reasons to get into exporting is that it can help improve your business’s profitability. While there might not be a big market for your products locally, it’s possible that there are customers abroad who are willing to acquire your products, to get them in huge quantities, and to pay for them in prices that are really attractive.
If you’re worried about not having enough capital to cover the costs of big orders, fintech institutions like First Circle can extend funding assistance. We can offer invoice financing, for example, to help you get supplemental capital as you await your clients to settle their invoices. You can also take advantage of our purchase order financing facility, which advances the money you need in exchange for your purchase order documents. Just this week, we launched our amortizing loan plan that allows businesses to repay your business loans in small amounts that help you manage your cash flow better.
No matter the financing challenge you are facing, there is a likely business financing solution available to you.
Exporting Extends Your Products’ Lifecycle
If your products have been in the local market for quite some time, there’s a chance that they’ve already achieved maximum saturation. This, in turn, can make it challenging for you to acquire new customers or buyers for your products. In fact, you may even start losing market share to other companies that produce newer and more innovative offerings.
By exporting your products instead of continuing to sell them in the local market, you can extend their life cycle. Indeed, putting them in front of foreign eyes can give them a new lease on life. This perspective from new customers is essential to keeping your products fresh for longer.
Exporting Widens Your Business Network
Networking and building healthy professional relationships are essential to the growth of your business. By going into exporting, you can quickly expand your business network. Organizations like the Philippine Exporters Confederation or PhilExport, for example, can help you get started. PhilExport is a non-stock, non-profit private organization that serves as the umbrella organization of Philippine exporters. It is accredited under the Export Development Act (EDA) of 1994, and was formed in 1992 when the Philippine Exporters Foundation and the Confederation of Philippine Exporters decided to merge.
PhilExport has members throughout the Philippines, including some of the biggest names in the industry. If you need new partners for expansion and innovation, you can certainly find them in PhilExport’s considerable roster of reputable businesses.
Exporting Benefits Local and Foreign Markets Alike
Exporting doesn’t only benefit you, your company, and your employees. It also benefits the local and foreign markets where you operate. Indeed, export and import activities help generate much-needed jobs and support economic growth in the localities where they transpire.
Moreover, exporting is also mutually beneficial in terms of learning for both exporters and importers alike. You can pick up a lot of knowledge as you operate in a foreign market—something which you then can apply and appropriate to your domestic operations. At the same time, your new partners can also learn from you. The knowledge transfer is a win-win situation for any kind and size of business.
Exporting Mitigates Seasonal Slowdowns
We’re all aware that seasonal slowdowns are inevitable in any business, such as the one all businesses are in, as caused by the COVID-19 pandemic. Expect that these lean periods can vary depending on the kind of products you make and can be influenced by various social, economic, and political factors in the future.
It is inevitable that you will experience a slowdown in sales at least once throughout the year. Exporting allows you to mitigate these situations by allowing you to transfer your products to markets where the demand for them is high, thus offsetting the domestic slowdown you are currently experiencing.
Exporting Can Raise Your Credibility
Another benefit of exporting is that it can raise your credibility in the Philippine market. This is mainly because of perception. If your products are considered export-quality, then many local customers will also see them as high-quality. This credibility further increases if you export to countries like Germany, Japan, Singapore, South Korea, and the United States, which are not only among the Philippines’ top trading partners, but are also known for their high standards of quality when it comes to imports.
On the other hand, exporting to high-growth markets like China and Vietnam will also likely benefit your reputation in terms of proving that you can meet the production demands of buyers from these fast-growing economies.
Exporting Exposes Your Business to New Ideas
Exporting your products can “force” you to innovate because you’ll be exposed to new ideas and you are likely going to be introduced to markets where customers exhibit significantly different ways of doing things.
If you want to thrive as an exporter, you’re going to have to adapt. This may even open opportunities for you to develop new products and services, which probably won’t happen if you stayed exclusively local instead.
Exporting will help the Philippine economy bounce back faster
Over the years, Filipino brands and Philippine-made products that have made it abroad have managed to shine a huge spotlight on the country. This will help stimulate the economy, especially when the demand for such products increases as more economies recover in foreign markets. This is especially true for many of our agricultural products, as well as the tech products that have come to comprise a huge portion of our exports in recent years. Of course, exporting also highlights the exceptional craftsmanship and creativity of Filipinos. In short, exporting not only benefits your company, it also benefits the country as a whole.
Exporting your Philippine-made products to foreign markets can feel like a daunting prospect, especially during these uncertain times. However, there is a wealth of resources available to any Filipino business owner who needs help getting started on exporting. From financing facilities to networking opportunities, you are well placed to take advantage of all the tools. All you have to do is to conduct your research and develop a sound business strategy. Before long, you’ll surely find your footing as an exporter.
Need business financing today? Apply for one with First Circle by clicking here.