If you want to start a business in the Philippines, what could be more basic and rudimentary than buying and selling? The principle of profiting in a buy and sell business remains the same: Buy Low then Sell High.
However, I might be oversimplifying the concept of a buy and sell business because there are still underlying questions that need to be answered:
The Philippines remains a country of active consumers. Since 1999, the Philippines’ retail industry has been growing steadily. In January 2016, the retail industry posted a Year-on-Year growth of 1.2% and it is expected to account for 20% of the country’s Gross Domestic Product or GDP over the next ten years.
Statistics aside, we know how much Filipinos love to shop. It doesn’t matter if the government rejects an increase in the minimum wage rate or if the prices of commodities go up. An increase in the price of petroleum and other factors of production will not deter the Filipino’s penchant for shopping. If there is a will, there is a way!
The proof you need is in our malls. There can never be enough of them. It seems that there is a new mall or commercial complex being built every five miles. And they are almost always full.
The Big 3 malls in the Philippines are SM, Robinson’s and Ayala. There are presently 55 SM malls, 37 Robinson’s malls and 16 Ayala malls all over the country. Other mall developers include Araneta Malls, Gaisano’s, Greenfield Development, Waltermart and Star Group of Malls.
If the malls are packed, Filipinos will patronize the flea markets or “tiangges” where you can find cheaper products. A popular by-product of the tiangge culture is the proliferation of the “ukay ukay” stores which sell used clothes and other second-hand items.
Filipinos can brave the horrendous traffic situation in the country or resort to shopping online.
Statistics on e-commerce retail in the Philippines show strong growth prospects for the industry. Here are a few of the key statistics:
- E-commerce revenues account for 12% of the Philippines’ GDP.
- 60% of purchases for the manufacturing sector were done online.
- 32% of purchases in the retail and wholesale sector were done online.
- 24% of purchases for the services sector were done online.
- From August 2013 to January 2016, e-commerce sales increased by Php8 Billion.
There are many benefits to shopping online versus the shopping centers:
- Greater probability of finding lower priced items
- More variety
With people becoming increasingly dependent on mobile technology, expect the e-commerce industry to grow over the next ten years. Remember, it is estimated that there will be 6.1 Billion smartphones by 2020!
If you want to start a buy and sell business in the Philippines, you have the option of starting an e-commerce website or a traditional brick and mortar shop.
Recommended article: How to Start a Buy-and-Sell Business in the Philippines
According to statistics, many online shoppers are quite young. The demographic breakdown in the Philippines is as follows:
18 to 34 years of age = 40%
35 to 45 years of age = 31%
46 to 55 years of age = 9%
On average an Internet user spends 16.4 hours per week online. Add to that the hundreds and thousands who troop to the commercial malls every day and you get a picture that Filipinos enjoy shopping.
Have you heard of Chen Guangbiao? He is a Chinese business person who is reportedly worth $740 Million. How did he become so rich? For starters, China is a country of 1.3 Billion which over the last few years has started to emulate Western-style consumerism. Those two conditions to Chen smells like blood to a predator.
In 2013, because of China’s worsening pollution, Chen sought to sell “canned fresh air” to his Chinese countrymen for 5 yuan and which comes in a “variety of flavors”.
According to Chen, the air is put inside the pull-tag can he invented. His staff only needs to swing the cans in the air “three times” to push the air into the can. When the can is filled with air, the built-in chip will close the can automatically.
Chen’s marketing copy reads: “Open the can and three deep breaths will allow you to have a good mood and a clear mind.”
Would you buy and sell canned air?
On the day Chen put his canned air to market, all 100,000 cans sold out! That’s US$80,000 or Php 3.7 Million in one day!
We all know there’s nothing inside those cans. But the moral of the story is you can sell anything that is packaged and promoted well, affordable and has a measure of value. Just like the fresh mountain air of China’s mountain province, people will buy anything that addresses a specific need.
So now we arrive at the heart of the matter. What products and services could you buy and sell? Outside Baguio’s pine tree, fresh mountain air, here are products that you can consider for your buy and sell business.
Buy and Sell Opportunities in the Philippines
1. Mobile Phones/ Devices
There was a time that the latest phones were Nokia were all the rage among techies. That time seemed so long ago because today’s smartphones are so much more technologically advanced and have more features.
Unlike the days of Nokia’s dominance where units like the 9210 Communicator and the portable 8210 were reserved for the wealthy, everyone today regardless of status seems to have a smartphone with the latest technology.
The reason is the market is flooded with many brands. You can get smartphones from China that are 1/10 the cost of an iPhone or a Samsung Galaxy. I have seen and tooled around with a few, and they are serviceable.
You can bring in the merchandise from China in bulk, sell them at competitive prices and still make a substantial profit. Your biggest problem is clearing them through customs!
An option would be to hire a Customs Broker. There will be a cost to hiring a Customs Broker, but the margins on your products should be able to accommodate the additional expense.
With the rate technology is evolving, many are applying “Okun’s Law” of unemployment to computers. Thus, for every new computer technology that is introduced in the market after one year, computer prices drop by 1 ½ from its original value.
You won’t run out of computer wholesalers who can give you attractively discounted prices on unused, still-in-the-box computers that have been released for a year or so. Many of the newer brands in the market are differentiated only by processing speed and a few features that are usually cosmetic. The difference in processing speed is negligible.
The fact is these computers are very serviceable. You can get a good discount if you buy in volume. Immediate target markets are the call center industry or the Internet shops that have been sprouting up in neighborhoods.