Very few of the country’s small and medium enterprises (SMEs) have taken advantage of technology and have exploited, for example, the potential presented by e-commerce or the Internet-driven business model.
This was particularly noted by Union Bank Vice President Genaro Lapez who said the lender now encourages SMEs to engage in e-commerce to help the industry ramp up their success rate.
SME success in the e-commerce business would also help ramp up financial inclusion in the country where the vast majority of entrepreneurs often do not have access to even the most basic of banking services.
Lapez said a massive transformation is happening today in Philippine business and society as a whole and that SMEs must be integrated with the ongoing digital revolution. Citing a 2014 Global Index study, Lapez said only one percent of SMEs own a web site.
“These are the same SMEs that represent more than 95 percent of all registered businesses in the Philippines and employ 62 percent of the labor force. There is a major disconnect out there that has not been addressed,” he said at the Ureka forum in Baguio City.
“We want to enable the mass conversion of Philippine SME businesses to e-commerce nationally, making SMEs an integral part of the digital revolution. This is the first time such a massive conversion is being attempted, not just in the Philippines or the Asean, but, perhaps, even in the world,” he said.
Quoting Mr. Rajan Anandan, the head honcho at Google Southeast Asia and India, Lapez said the 2014 Global Index shows $47 million of 100 million Filipinos already used the Internet and that 55 percent of these Internet users, or 26 million, do so on smartphones.
This leaves the Philippines with the highest smartphone penetration rate among emerging markets in 2014.
He said this year some 60 million Filipinos or 60 percent of the population are expected to be on the Internet.
Filipinos spend five hours a day on their smartphones and 2.8 hours online, Lapez said, quoting the global index study.
He also said the study found that Filipinos spend the most number of time online in Southeast Asia.
Some 52 percent of the smartphone users were found to have recently purchased products and services using their device.
Lapez said businesses should begin shifting to the digital sphere because that is where the increasing numbers of Filipino consumers are.
“By enabling SME’s to “do e-commerce”, we help achieve true “financial inclusion,” Lapez said.