More than half of local startups are looking into exploring other countries, signifying the Philippines may not be ready yet for their product offerings, according to a study.
Based on the 2017 Philippine Startup Survey, 61 percent of these young companies in the country said they wanted to enter new territories outside of the Philippines as part of their “strategies for growth in the next three to five years.”
The study, conducted by PwC Philippines, surveyed 106 startup founders in the country, providing a snapshot of the local ecosystem comprised of an estimated number of more than 200 active startups, officials said. The survey, which was conducted in the past two months, included 22 face-to-face interviews.
PwC Philippines chair and senior partner Alexander Cabrera said in a press briefing on Wednesday this does not necessarily mean the companies would “drop the Philippine market.”
“They care about the timing of these opportunities because opportunities may no longer be there in a brief while. That’s the nature of technology. That’s not really giving up the Philippine market,” Cabrera said.
Yet, “you also need to admit that there are a lot of these products that the Philippine market is not ready for,” he said.
Local traditional businesses, he said, would more likely focus on their core market here in the Philippines. On the contrary, startups were “so obsessed with the potential of [their] products” that going regional or global has become a “natural tendency.”
Of the respondents, 35 percent are in technology (app-based), 15 percent are in retail, 9 percent are in financial services, 5 percent are in telco, 5 percent are in education, and 4 percent are in transportation.
According to Trade Undersecretary Nora Terrado, startups are distinct from traditional businesses because of how they incorporate a “digital component” into their businesses in order to improve operations.
A significant number of these startups cited the following as top challenges in their operations: capital requirements (88 percent), regulatory requirements (54 percent), and general economic/business conditions (50 percent).
To build sustainable businesses, more than half of the respondents said areas that needed improvement included tax incentives, ease of doing business and access to capital.