When strict COVID-19 lockdowns were enforced beginning March, restaurateur and chef Katrina Kuhn-Alcantara knew she needed to pivot fast as businesses activity ground to a halt around the country.
She turned to e-commerce and started GrowceryMNL a month later, offering grocery items and flagship products owned by her family and husband Marco Alcantara such as Arce Dairy and Sarangani Bay Bangus.
“GrowceryMNL was set up to save the jobs of those involved in the prior businesses,” she told the Inquirer.
But this also led to the rapid expansion of its products as customers grew comfortable shopping online.
Today, GrowceryMNL sells everything from bread, restaurant meal kits, plant-based products and even steaks from the Mamou restaurant chain.
“The consumers loved online ordering and the efficient same day delivery,” Alcantara said.
With Christmas approaching, the company is offering holiday gift sets for households and companies.
The pandemic-induced recession will inevitably hurt spending power but Alcantara said there was a market for this service as long as entrepreneurs step in with creative solutions.
“We feel the reception of online gift shopping is strong due to the convenience of ordering and delivery to multiple recipients,” she explained.
The rise of services such as GrowceryMNL is part of a larger shift in commerce and finance, education and even health care during a pandemic that is rewriting all of the rules.
This message was underscored by businessman Manuel V. Pangilinan during the launch of the Philippine Digital Convention 2020 last October.
“It has been a year of exceptional difficulty to the point the crisis distilled our choices into two: adapt or exit. Pivot or perish,” Pangilinan said. “The virus emphasizes these choices are not only rhetorical. They are in fact existential.”
“Digital has become an essential service, and to some of us, a lifeline,” Pangilinan said.
Survival
For many, the embrace of technology and the internet will determine their survival even beyond COVID-19.
Figures in the “e-Conomy SEA (Southeast Asia) 2020” report by Google, Temasek and Bain & Co. illustrated this massive transition.
Overall, the report said Southeast Asia’s internet economy as measured by gross merchandise value (GMV) would swell to $300 billion by 2025 from $100 billion this year.
For the Philippines alone, GMV will hit $28 billion in 2025 or a growth of 30 percent from 2020.
This will be powered by an ever-rising number of new internet users. The report said 40 million people in the region joined the internet this year versus 100 million in the past four years.
And more telling is that 95 percent of Filipinos intend to continue using digital services post-COVID-19, the report said.
As employees and students were confined inside their homes, financial technology companies have been a clear winner thus far.
PayMaya, which is backed by companies such as PLDT and China’s Tencent, earlier saw a massive 1,400-percent surge in merchants joining its platform.
“Cashless and contactless payment and money transfer technologies are now part of the world’s arsenal against the virus,” PayMaya founder and CEO Orlando Vea had said.
Gcash, backed by the Ayala Group and Chinese billionaire Jack Ma’s Ant Financial, expects to breach a whopping P1 trillion in volume this year.
Payment shift
Furthermore, figures from Kantar Research indicated that cash transactions have actually dropped from before the pandemic.
At the same time, e-wallets rose from an average of 18 percent to 25 percent “indicating a massive shift from one payment method to another.”
Other winners were entertainment streaming services and on-demand delivery services.
A leading player in transportation, Grab said nearly 12,000 businesses joined its platform from March to June this year.
Even with the easing of restrictions months later, demand continues to rise.
Ninja Van Philippines country head Martin Cu said during a business forum last October that the company continues to increase its workforce and network.
“Demand is accelerating and, of course, it’s allowing us to facilitate more hiring and job opportunities,” he said.
Technology companies that have positioned well before the pandemic are also seeing a big boost.
AIDE, the Philippines’s only home health care platform, was born in 2016 after the Bugayong siblings were seeking medical care for their grandmother.
“We wondered why there was no app for this? So my siblings and I decided to build this platform ourselves,” Patrick Bugayong, AIDE cofounder and chief product officer, told the Inquirer.
Their vision soon attracted the country’s oldest conglomerate, Ayala Corp., which invested in the startup in 2018 through AC Health.
A medical doctor, Bugayong said the pandemic has “definitely pushed into the spotlight and mainstream audience and consumers.”
It also offered ways for customers to receive professional advice from the safety of their homes. AIDE launched online consultations during the pandemic and Bugayong said this was now the third most requested service on the platform.
“Our home service labs, vaccinations and online consultations have been our most popular services during the pandemic,” Bugayong said.
“Our laboratory service has increased exponentially since we also offer every type of COVID test with all the needed documents for every need,” he added.
It took years for e-health to win widespread acceptance in the Philippines. Because of COVID-19, Bugayong said it was here to stay even postpandemic.
Meanwhile, other sectors were caught off guard.
Education system
The disparity between the haves and have nots in terms of reliable internet connectivity—often called the digital divide—has significantly impacted the education system, affecting both students and teachers.
This divergence between urban and underserved or unserved rural areas remains a problem in the Philippines and has long been tagged as a drag on economic growth.
The Department of Information and Communications Technology (DICT) said anywhere from 30 to 40 percent of the Philippines lacked reliable internet services.
This was also due to the government leaving nearly all investments in this sector in the hands of private companies.
The DICT has been seeking to undo this through its National Broadband Program (NBP) to be rolled out next year.
A magnet for controversy and corruption under the Arroyo administration, the pandemic has underscored the need for more government spending in this areas. To date, however, the NBP still struggles to win adequate funding from Congress.
This is bad news for the country’s education sector and the present problems confronting distance learning.
To adapt, the Department of Education (DepEd) implemented a blended learning approach that combines television, radio, and self-learning modules with online classes.
Alberto Muyot, CEO of the Philippine unit of the independent global organization Save the Children, said more needs to be done.
In an Inquirer opinion piece on Nov. 9, he said millions of children struggle to adapt to blended learning while households also face an economic recession.
The pressure extends to nearly 800,000 public school teachers dealing with technological issues while their access to devices such as laptops, desktops and decent internet “is a major challenge.”
“Going to school is critical for children, especially those living in the toughest places on Earth,” Muyot said.
“To ensure the success of distance learning during the pandemic, children, parents and teachers must be provided with support through an effective feedback mechanism that will help the DepEd come up with context-based and evidence-based solutions,” he added.
Moving forward, Muyot called on the government to “build back better and more resilient education systems.”
This will ease the pain when similar crises arise in the future.
Businesses understand this and have started to take the necessary steps to “future-proof” their enterprises.
“We believe that online will continue to stay,” said Alcantara, pointing to the deliberate shift in this direction in wealthier economies.
“In developing countries, the pandemic just accelerated the shift,” she said. INQ