In previous posts on the E-Commerce Entrepreneurs Summit, I have written about B2B eCommerce. On this post, I would like to offer you a more in-depth look at how the PhilYes B2B platform could help businesses grow. Additionally, I will write about specific sectors in business, and how B2B eCommerce benefits them.
PhilYes B2B in a Nutshell
The simplest way to explain how the PhilYes B2B platform works is to think of it as the connector. All businesses are both buyers and sellers. The business-to-business platform offered by PhilYes serves as a bridge and then more. Google continues to be the best search engine because it delivers relevant results. In some ways, PhilYes works like that too.
As a buyer, businesses could post their purchasing requirements. Other businesses which could fulfill the requirements could send in their quotations. In this case, PhilYes acted as the medium by which businesses contacted each other. By making it easier for buyers, sales opportunities and leads increase.
A working B2B platform can help small and large companies save time. As a result of better efficiency, it follows that productivity increases. As it is, both time and productivity are crucial to the continued success and growth of companies.
— ROBERT LEE (@pinoydaddy1969) January 9, 2017
From the graphics, see how online engagements continue to rise? It’s in the best interest of business owners to pause at this point and think about that. Is your revenue increasing year after year?
Questions Answered and My Thoughts
Before I attended the E-Commerce Entrepreneurs Summit, I have a few questions about PhilYes. These were questions I asked on a previous post on B2B eCommerce in the Philippines. At the summit, I talked to PhilYes executives, including CEO Rachel Tolentino. Another person I talked to was their VP for Marketing Chris Guarin, who gave me more insights.
1. Authenticity of Businesses
Businesses applying to be a part of the PhilYes B2B platform needs to submit proof of legality. That means providing legal documents to prove they are legitimate businesses. This process alone may seem too much for the uninitiated but this is a great security feature. After all, businessmen would like to connect with legitimate businesses only.
Furthermore, the platform will have other security checks. For instance, verifying the status of company representatives who has access to the platform.
2. Organizing Product Categories
According to Chris, companies can post products. Unlike other platforms I use for sourcing, only members of the platform have access. In the past, all the top B2B platforms in the world allow anyone to see product listings. PhilYes, in this case, is taking another approach by prioritizing the benefits of its members.
3. User Experience and Spamming Product Listings
Instead of focusing on the now, I am looking at the future. I am envisioning the time when B2B eCommerce is the infrastructure of business expansions. It also means that there would be thousands of companies using PhilYes B2B eCommerce platform. When that time comes, the organization of products becomes crucial.
It means that the platform must have a way to provide standard keywords to use. This is to reduce or completely avoid spamming as it is bound to happen if there are no measures in place. Take B2C platform Amazon as an example. There are countless sellers spamming the product listing, which resulted in terrible user experience.
4. Membership Levels
With tens of thousands of members in the future, would there be a change in membership levels? In my opinion, it makes sense to introduce at least two membership levels. But that would be dependent on another factor, the next one after this.
According to Chris, to meet the local and international standards, PhilYes uses a badge system. In my observation of the mature manufacturing sector in China, manufacturers are proud of their certifications. The fact is that before they receive certifications which they use in marketing, they need to comply with the standards of the issuing agency. Besides paying a good sum of money, they will have to raise their standards, and that is a good thing.
5. Third Party Validators
Here’s where the Philippines is lacking. Forget the figures given by the government on the growing economy. Right now, the service industry is the driving force for the growing economy. But for the Philippines to take its place in the global scene, we need to industrialize. And that means we need more manufacturers that not only supply local needs but also to make its mark abroad.
How do I know if we have reached the level of industrialization that I envision for the future? It is when we have local third party validating agencies. So, I have high hopes here.
Benefits for Different Businesses
One of the things I learned at the E-Commerce Entrepreneurs Summit is that there are 2 million online sellers in the Philippines. I believe a majority of the online sellers use Facebook and OLX, as well as a few others. If I were to categorize the online sellers, they would be as follows:
1. Online sellers who market their own products, usually food. Others include those who buy from wholesalers or drop shippers. Usually, they market using Facebook as their main sales channel.
2. Online sellers who use B2C platforms such as Lazada, Shopify, Etsy, and group buying sites. They either make their own products or source from elsewhere.
3. Online sellers who have their own websites or online store. Like the second group, they market services or products they made or sourced elsewhere.
Selling online is a good starting step into entrepreneurship. But most online sellers lack the fundamental mindset of entrepreneurs. For that reason, they need to invest time and money to learn how to be one. As a result of continued personal development, online sellers could make clear and better business plans.
If there is one thing that a B2B platform may help online sellers, it is finding suppliers to add to their inventory. In the case of those who produce their own products, PhilYes B2B may be a bridge to suppliers or components they need.
Unfortunately, online sellers are not the best source of products for companies. B2B platforms are for registered businesses. That means that a vast majority of the 2 million online sellers are not ready for this platform. Having said that, it’s to the benefit of online sellers to have a workable business plan for growth.
Retailers (Store Owners)
I refer to retailers as those businesses with physical locations. Regardless of how modest or large (such as having nationwide chains), B2B is more likely to be beneficial. The decision to join a B2B platform sounds complicated, but in reality, it is easy.
In most cases, a stable business-to-business relationship runs on credit. In other words, it’s common practice for companies to give payment terms to other companies. But the final business transactions are not completed in the PhilYes B2B platform. It’s up to the companies to contact each other and complete the transactions on their own.
‘Transactions’ is the operative keyword here. Being a part of a B2B platform doesn’t guarantee that your reason for joining one can be satisfied. Because of that, retailers should consider joining based on the potential for transactions.
There are many products you buy in order for you to run your business. Some of these could be the consumables such as office supply. Others could be investments in transportation such as trucks. But for many businesses, purchases include raw materials or finished goods.
In a B2B platform, retailers could look for new products or alternative products. Having different suppliers gives retailers the choice of buying from cheaper sources. Even better, retailers may find new suppliers with unique products that could add to their competitive edge.
As a seller on the B2B platform, it depends on the products. If a retailer is sourcing products from a local manufacturer in great volume, then it’s possible that they could offer competitive pricing. As exclusive dealers, that’s also another competitive edge. Finally, the retailer must have products to offer to companies.
If the retailer carries products that are meant to sell to end-users or consumers, then the B2B platform may not generate enough sales leads. If there’s anything good from this, then it’s knowing what other companies purchase. It’s then up to the retailer to source for those products they could offer to other businesses.
Wholesalers, Distributors, and Importers
In mature B2B platforms, the most number of buyers are the wholesalers and distributors. Here, I am referring to the global sourcing and trade industry. But here in the Philippines, and considering that PhilYes B2B business is new, it may take several months before wholesalers, distributors, and importers see the value of being a part of the B2B platform.
One hindrance is that many of the local wholesalers, distributors, and importers already have their own customers. In my opinion, those who could adapt to the changes are the ones that will last longer. Because there are always new players in the market, then the need to find new customers should never stop.
No importer could import everything on their own. Hence as a buyer, it’s possible for a wholesaler or distributor to buy from other importers. In that way, they add more items to their product offerings. For importers, the presence of wholesalers and distributors in a platform means more opportunities.
Even the most conservative business owner of a wholesale or distribution business would find value here. I know many wholesalers who no longer wants to add new customers to avoid bad credits. With that being the case, then it makes sense to add more products they could market to their existing pool of customers. So, besides purchasing the essentials they need to run their business, B2B platforms provide the opportunity to expand product ranges.
Because there are buyers, then it makes sense for those who could fulfill those needs to be in the B2B platform. I think this part is clear, especially for the importers. Of course, companies prefer bigger transactions. But even with the smaller purchasing requirements of small retailers, it all adds up.
In the normal hierarchy of businesses, it is common for retailers to buy from wholesalers or distributors. The wholesalers and distributors buy from the importers. For as long as there are retailers, then so should the bigger companies.
At the top of the business world are the manufacturers. In China, known as the factory of the world, almost all factories are either directly or indirectly using Alibaba. I think I mentioned this in a previous post, if not for the Alibaba B2B platform, there’s no way China’s manufacturing sector could grow.
For manufacturers to produce products, they need raw materials. Even if they have steady suppliers, there are others who will import the same raw materials. For them to break into the market, they often would offer either better quality or better pricing. So, they should always be proactive in looking out for new suppliers.
Because the lead purchasers of a manufacturing company are often swamped, any means to save time results in higher productivity. And it so happens that saving time and increasing productivity is what makes the B2B platform valuable.
Unlike the other types of businesses, manufacturers have more leeway when using a B2B platform. Buyers would rather deal with manufacturers than with distributors, for example, provided these are the same products. Depending on the products, a mature B2B platform may be a good sales lead generator for manufacturers.
Foreign Companies Seeking to Penetrate the Philippine Market
One of the problems almost all manufacturers I talk to is finding customers in the Philippines. Come to think of it, all the manufacturers abroad that I visited asked that same question, “How do we find customers in the Philippines?”
Most of the time, they try to find companies using search engines. The smarter ones would try to look for business directories in the Philippines. But they all do it online.
So, for the first time, I am going to say something that I have never told those who asked me how to find customers here. The simplest was to find someone to send them the local telephone yellow pages.
P.S. If in case you are one of the owners or export sales managers of companies I have visited in China, you can’t seriously ask me for the names of my competitors, right?
The telephone directory contains the phone numbers of most businesses. But that’s not easy to do because a company abroad would need to purchase telephone directories in every region.
Lucky for you, there’s a B2B platform now in the Philippines. For manufacturers and trading companies abroad seeking business opportunities here, there’s the PhilYes B2B.
Philippines Companies Expanding to Other Countries
Globally, it’s hard for the country to be competitive. I am aware of many people here with dreams of exporting abroad. But that’s impossible unless a few things are done. One is to identify the target market and learn how to send products there. Another is to understand the laws and regulations here in the Philippines and the international market.
Without the prerequisite knowledge, exporting is not happening. No amount of planning will work unless there is an effort in learning. It’s a pity that with the PhilYes B2B platform in place, and I do have reasonable expectations that the platform will evolve, that potential exporters would be left out.
Having said that, for PhilYes B2B to help the local companies, they should create a series of tutorials. It’s easy to say that they would like to attract foreign companies to join the local platform. But for that to happen, here’s are some of my thoughts besides teaching local companies how to export.
Suppliers from abroad have a good reason to be a part of the local B2B platform. It’s a great way for them to find opportunities here. But what about the local suppliers who could market abroad? To make it happen, then PhilYes will have to find ways to attract foreign buyers. This is only possible if the company will invest money to participate in global trading events. It’s only in these events that the B2B platform could show foreign buyers what they could find in the Philippines.