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In your experience, what are the key challenges of operating in the Philippines market?
Eddy: Welcome to today's content jam session. We'll be talking about the market in the Philippines. We have three guests with us today.
First, we have Michelle Fernandez from GCash. Michelle has worked at Globe Telecom, Samsung, and L'Oreal. We're happy to have you here, Michelle.
Next is Pepe, the CMO of Maya. Pepe has worked in China and Singapore before coming back to the Philippines. He has experience with Unibank, a Philippine banking company. He was also the head of marketing at Airbnb China and a country brand director at P&G Singapore. Welcome, Pepe.
Lastly, we have Raenald. He's the head of marketing for the Philippines and Thailand at Shopback. Reynold has worked at Red Doors, Grab, and Gray.
Let's start with an easy question for all of you. Michelle, Reynold, and Pepe, what do you think are the main challenges of working in the Philippine market? It would be great if you could give some examples in your answers.
Michelle: Since you asked me first, I'll start. I haven't always worked in digital. For a big part of my career, I dealt with physical products.
A major challenge in the Philippines is its structure as a group of islands. This makes both online and offline business difficult, especially offline.
Shipping things is hard. It's also tough to build internet towers, which makes connecting the whole country challenging. Whether you're sending physical items to customers or stores, it's not easy.
Digital products face problems too. Many areas have poor internet. That's why people often go to malls or coffee shops to use Wi-Fi.
In smaller towns, internet cafes are still popular. So, just the way our country is set up creates big challenges for marketing and sales.
Eddy: Thanks, Michelle. Reynold and Pepe, I'm sure you both agree somewhat, especially for digital products. I'd like to hear your thoughts.
Raenald: Let me answer from an e-commerce point of view. When I started working with Thailand, I asked ChatGPT about the differences between Thailand and the Philippines markets. I was surprised to learn that other markets are more mature than the Philippines.
Even though e-commerce in the Philippines has grown quickly in recent years, there's still a lot of room for improvement. A mature e-commerce market usually has more variety, higher consumer trust, and easier transactions.
At Shopback, we see the Philippines as a "high concentration" market. This means that a few top brands are responsible for most of the transactions. It's a unique challenge here - we need to work closely with these big brands and maintain good relationships with them.
Since e-commerce is still developing, there's also room to grow in terms of consumer trust. I often hear people asking if something is a scam or if it's real. Even for cashback, some people say, "That can't be true!"
We still see these misunderstandings because the market is still growing. So that's the situation from an e-commerce perspective.
Pepe: I agree with Michelle and Reynold, but I'd like to add a broader view. The Philippines is unique in Asia Pacific because it's full of contrasts.
Our country has an interesting mix of influences. Someone once described the Philippines as a place that spent 300 years in a Spanish church and 50 years in Hollywood. This really captures our blend of old and new.
We have traditional values, but we also want modern, American-style lives. We're connected to the world, but we're also split into many different regions.
For example, many of our popular movies and artists are American. We're one of the few Asian countries where English movies don't need subtitles.
But at the same time, as Michelle said, we're divided into regions. We have many languages and dialects. This makes things interesting but complicated.
All of this makes marketing in the Philippines complex. The challenge is figuring out what works for your brand and cutting through all the noise.
You need to think about things like: Where is your business right now? Are you selling to everyone or just luxury customers? What are your goals? Some companies come here thinking their product will work right away, and they spend a lot of money on marketing.
But as Michelle said, moving things around the country is hard. If you're starting a ride-sharing or delivery service, it might be better to try it in a smaller area first before expanding.
So, there's a lot to think about. The key is to cut through all this complexity and figure out what makes sense for your brand and business at this moment.
How does regional diversity impact media consumption habits and marketing preferences?
Eddy: Let's talk about how different parts of the Philippines affect marketing. When we plan campaigns, do we make them specific to main cities?
I'm also curious about how budgets and approaches change when targeting big cities like Manila, Cebu, and Davao, compared to smaller islands like Iloilo or Dumaguete.
Michelle: I grew up in Bacolod, not Manila. It's clear to me that each region in the Philippines is very different. We have about 40 dialects, and each area has its own trends, habits, and even food preferences.
As a marketer, this means you can't use the same campaign everywhere. You can't expect everyone in the country to like your product just because they have similar needs. If you try to treat all customers the same, you might only succeed in a few places.
If you focus on big cities, you might see good results there. But remember, the Philippines has over 110 million people. When making a marketing plan, you need to think about many details - not just the product, but also pricing and who will promote it. This can be expensive, complex, and time-consuming. So yes, it's very challenging.
The Philippines has a lot of regional differences, even though we're a small country. This makes marketing hard, but it also gives you chances to try different ideas. Something that doesn't work in a big city might work well somewhere else. Coastal areas might need different approaches than mountain regions. All these small differences give marketers a lot of room to experiment.
Raenald: Let me add something. Someone once told me that working in the Philippines is like operating in multiple countries because of how complex and diverse it is.
For example, when I worked in ride-hailing, we saw big differences between cities. In one city, people cared a lot about what kind of car they rode in. In another city, people didn't mind if it was a tricycle or a jeep. They just wanted to get where they were going.
These differences mean we have to approach each market differently. For online marketing, we try to target broadly at first and see what works.
But we also need to support this with local offline efforts. Of course, this depends on how big your marketing team is. Not everyone can afford to have people in Cebu, Davao, and Iloilo.
We started by working in clusters, like Visayas and Mindanao. While we did broad online marketing, we also focused on local partnerships and events.
I'm sure Michelle and Pepe have been to festivals like Sinulog, Dinagyang, and Masskara. It's important to be there. That's when locals really see us.
When we're there, I notice how much it matters for people to see us in person. They don't necessarily need to see the product, but they want to see some physical representation of the company. So offline presence is still really important in some areas.
Pepe: I agree with what's been said. Here's how we approach it:
We start with a nationwide strategy, but we also look at things from a regional perspective. This helps us see where we need to make changes for different areas.
In reality, we have to work with limited budgets. So we have to make choices. For example, we might create something that's perfect for big cities like Metro Manila, but only 90% right for other cities. We have to decide if that's good enough, or if we should spend more to make it fit each region better.
When it comes to in-person events and partnerships with local businesses, we need to be careful. For instance, there was a recent credit card promotion with a restaurant group that offered 50% off in Metro Manila. It was very popular.
But this restaurant group isn't in places like Davao or Cebu. So while the promotion worked well for their target audience, it didn't reach people in other parts of the country.
On the bright side, things are getting easier for marketers when it comes to media channels. They're becoming more uniform across the country.
For example, YouTube recently announced that more Filipinos now watch YouTube than TV. People watch both content made for YouTube and shows that used to be only on TV.
This makes it easier to reach more people. Someone could be watching local news for their region, but through YouTube.
In the past, if you wanted to advertise on TV everywhere, you had to work with national, regional, and local TV networks. Now, you can just use YouTube, and it will show your ad to the right audience, no matter what kind of content they're watching - national, global, or regional.
This simplification in digital media channels makes it easier for marketers to reach their audience across the country.
Eddy: Let's talk about new digital media channels like YouTube, TikTok, and Instagram. How have you seen marketing budgets change across these platforms? How has budget allocation shifted over the last five years?
Raenald: I look at these online channels from both organic and paid marketing perspectives. In recent years, spending on TikTok has definitely increased. We look at how popular TikTok and Facebook are in different markets to see what makes sense for us.
For paid online marketing to get new customers, TikTok is very popular. Simple, raw content works well across different areas. Interestingly, we still see strong communities on platforms like Facebook, Viber, and Telegram. People in different areas still look for these community spaces.
We work with a community focused on credit card promotions. We found that people there are also interested in cashback offers. It all comes down to trust.
People often ask the community, "Have you seen this? Have you tried it?" When others confirm it's good, that's when they download the app. They want to know it's legitimate.
So you have channels for attracting new customers, but also for helping them understand and eventually use your product. Different users look for different things at each stage.
To be honest, when we focused more on online marketing for Shopback this past year, I realized we weren't reaching enough regional users. This means we need to use more varied marketing channels.
Eddy: Let's talk more about online communities. This seems to be something special in the Philippines. It reminds me of how information spreads in small villages.
In the past, if someone learned about something new, they'd tell everyone in their village. Now, I see a similar thing happening with online groups in the Philippines.
For example, if you want to find the best airline deals, you might join a Viber or WhatsApp group. Michelle and Pepe, have you noticed this too? Do you use these communities to share information and build awareness?
Pepe: I agree with what Reynolds said earlier. There's a big credit card community on Facebook with about 300,000 to 400,000 members. We're talking about the same one. We just launched our first credit card, and we're watching that community closely.
About two years ago, we became a digital bank. This made us one of the first public digital banks. Someone then started a Facebook group called "Digital Banks PH," which kept growing.
At first, these groups were useful for understanding the market and getting feedback from passionate users. But now, they've become more than that.
These groups are now places we can partner with. The group admins are influential and know a lot about early adopters in different areas. They can really help figure out if a product fits the market, or help it grow faster if it already does.
This is exciting because for a long time, we talked about communities in a very general way. But in the last few years, at least in the Philippines, these communities have become much more real and specific.
There are now clear leaders in these communities that we can work with to help our brand or business grow.
For us at Maya, these communities are very important, especially when we launch new products.
Michelle: For us, communities are more than just places to promote our products. They're where we learn from our customers. People feel comfortable sharing their thoughts and asking questions here.
We can see how to improve our products by looking at what features people want or don't like. Since I work on experience design, I can see which screens confuse people and how to make them clearer.
We also love seeing people interact in these communities because it's a natural way for them to learn. Many Filipinos don't like reading long paragraphs or articles. They prefer short lists or visual content.
But in a community, it feels like a conversation. It's a safe place to talk. People are happy to read lots of text because they're interested in what others are saying.
It's real and honest - it's people sharing their thoughts, not a company trying to sell something. As a marketer, these are great places to visit and learn from. Yes, you can promote your product, but it's also a chance to understand your customers better.
Raenald: I'd like to add something about communities. They're good because they're partly measurable but still natural. We can track some things, but conversations flow freely.
For example, last year we had our highest number of app installs when we went viral in one community. We saw a spike in sign-ups right when that post was shared. This shows that while communities create natural conversations, they can also affect our important numbers. So they really do help our business grow.
Are there any specific factors, profiles or segments that you consider to be the most important in the Philippine markets when making decisions?
Eddy: We've talked about how different regions in the Philippines are diverse and complex. We've also discussed how to target these different regions. A question from Joseph, based on your experience, what do you think are the most important factors, profiles, or segments to consider when making decisions about the Philippine market?
Pepe: Despite all the talk about diversity, we've found that the most important insights are often shared by many people, not just a small group. We try to find big ideas that work for different groups of people.
For businesses in tech or digital areas, we've noticed that young adults are usually the first to try new digital products. This was true for things like Instagram and Airbnb in the past. Young people try these new things first, and then they tell others about them.
At Maya, we want to help improve the financial situation of Filipinos. But sometimes, the way to do this isn't obvious. For example, when we were PayMaya, we thought about helping farmers in remote areas. But we realized they might not have smartphones or need our services.
So when we became a digital bank, we focused on young adults. We knew they weren't happy with traditional banks. We thought they would be the best people to spread the word about our services.
This approach has worked well for us. It might be different for other types of businesses, but for new digital products, young adults are often the best group to target first.
Eddy: I'm curious about ShopBack's target audience. You mainly focus on people with more money to spend, right? Is there a specific age group that works best for ShopBack in the Philippines?
Raenald: It really depends on our current goals. When we were trying to grow, we focused on getting more users and transactions. This meant targeting where most people are.
In the Philippines, that's usually the younger market. But this affects things like how much they spend and how loyal they are. We have to be careful because when our goals change, we might need to change who we target.
While we do target young people for growth, most of our regular users are actually 26 to 35 years old. Younger users might try us once in a while, but the older group tends to stick around. It's about forming habits and how much value they get from us.
For example, if an 18-year-old spends 500 pesos and gets 10% cashback, it's not much. But if someone spends 5000 pesos on travel and gets 10% back, that's a big deal. So it really depends on what we want to achieve right now - more users or more value per user.
Michelle: When thinking about marketing, you need to consider two things: your target market and your brand identity. At GCash, our mission is "finance for all," which means we want to reach everyone. But you can't actually target everyone at once - that doesn't work.
Within a company, different products serve different purposes. For example, we have GCash International for overseas Filipino workers. How we advertise to them is very different from how we advertise GCash Junior. These are two separate groups of customers.
The way we talk to these groups and the materials we show them are different. But we make sure our brand identity stays consistent across all our products. Our advertising always looks like GCash, whether it's for overseas customers, young users, or basic services like sending money or buying load.
It's important to have something that connects all your products, but you can still create different approaches for specific customers. This is where it gets tricky. Product managers often want to reach as many people as possible. They'll say their target market is "everybody." But that's never really true.
You need to ask about a specific target market. If you could only target one person, who would they be? What do they look like? Where do they go? How do they talk? Understanding this core customer helps you create a clear marketing plan. This plan might then spread to reach other groups of customers.
Focus first on who your product is really for. Then ask yourself if they actually need your product. Just because you can create a product doesn't mean you should sell it.
Eddy: I like that idea of focusing on one specific person and building your campaign around them.
We're at the end of today's session. Thanks so much for sharing your insights and experiences, Michelle, Pepe, and Reynold. We have an upcoming session about Thailand in a couple of weeks. You can get updates about the event through our community.
