Online business in the Philippines is just sprouting out. Although there are several people and start-up companies who are making big and enjoying success, Filipinos in general are still not aware with the big potential of becoming a digital entrepreneur.
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On this article, we will talk about the difference, advantage and consequences of traditional business vs. online business in the Philippines. Let’s go!
Traditional business in the Philippines
In a nutshell, when we say traditional business, it is the common practice of doing business where transaction and processes are done physically. I mean, there are physical place to transact the business, employee who help running the business and the customers going in and out physically there. In other words, doing a manual business.
A good example for this are sari-sari store, small eatery or carinderia, food carts business, bakery, direct selling, restaurant and many more. Those are considered traditional businesses in the Philippines. At least for me. They process and serve product physically to their customers. That’s how it works. I hope you get my point.
Online business in the Philippines
On the other hand, online business can run differently from a traditional business. If traditional business needs physical appearance and assistance, online business can run virtually and automatically. I mean it can be automated.
What does that mean? It simply means you can build systems and programs upfront to take care and handle the business. It can run while you sleep! That’s literally true. But of course, there’s a lot of work and process needs to be done at the start.
Additionally, online business can run and manage by a single person while serving thousands of customers. It can even serve millions of people around the world. Unlike traditional business, you can only do business with in specific area and can only accommodate certain number of customers. That’s the beauty of online business.
Let me give you an example. Let say I have a blog or a website that sells digital product like ebook(digital version of book) or video courses regarding a specific topic online. On that blog, I can set up an ebook or video course store. If the customer purchased the product, it will be send or delivered to them automatically after the payment (via credit card or online bank accounts). The transaction can happen without intervention of a human. That’s how online business works.
It can provide freedom. You can enjoy other things you love while your business runs on the background. As mentioned, if built properly, it can run on its own. It can run on rainy and typhoon season which always happen in the country. It can reach every people on earth with internet connection.
Again physical boundaries are not an issue. But of course like any other property, online businesses are still subject to hacker’s and virus attack, identity and information theft and other digital fraud. That’s the main risk in online business.
There’s a lot of ways you can start and do online business in the Philippines. That’s just an example. I hope I’m making it clear.
Now, as I mentioned earlier, building a profitable online business is not easy. Although it seems very simple, the workload and process in the back-end are not. You need some technical skills and knowledge to understand the concept and processes. But of course it can be learn.
If you think online business is the one that fits your goal and personality, you can be successful. Results depend on each person.
Mix of both
In some cases, there are existing businesses today which are mixed of both traditional and online business. Transactions and processes are being done online but products or services are being physically delivered. E-commerce store, online store and other type of small businesses today are taking the advantage of online systems with their traditional businesses.
Examples of this are lazada, zalora and other online stores that process orders online but dealing with physical products. There are also online websites that cater home services like cleaning the house, repairing an air-conditioner and the like. Filipinos are somehow keeping up with the trend.
How to start traditional business in the Philippines?
Starting a traditional business seems to be straight forward. You just need to register the name of business, process necessary permits and tax information in your municipality. Depending on the type of business, you may also need to check with DTI and SEC for other legal approvals.
Once the permits and all requirements were approved, you can start the business. Of course, make sure you have a sound business plan before you start. In future articles, I’ll share more about them here.
How to start an online business in the Philippines?
In an online type of business, you still need to process requirements and permits if you want to have a legal and registered business. Almost the same permits and requirements with traditional business as well as the processes.
The only big difference is you need to build an online platform on how you will run your business. As mentioned, if you’re planning to start an e-commerce store you need to have an e-commerce website. Most of the time, it starts with a website. You need to have a online presence to start. Be it a blog or other type of website. From there, you can start building other components that will cater the needs of your potential customers.
Today, there are a lot of Filipino doing online business through their blogs. They are offering digital products and services online. In case you want to learn how to start a blog and make money, please visit my 5-part blogging tutorial here.
Many Filipino still not confident with online business
If you’re an online enthusiast, you might notice that there are still many Filipino not confident transacting or investing in online business. Many are still in doubt.
Try to discuss your online business idea with most Filipino elders and they’ll tell you it’s impossible. Or try to explain that you can make money online in the Philippines and you will have hard time convincing them. Especially those in rural areas where internet connections are limited. They might aware and know how to use facebook but still many are not aware that you can already do online business in the Philippines.
There are several reasons behind this and we can go on and on to discuss that. But I think the main “constraint” on this issue is the internet connection in the Philippines. We are left behind with other Asian countries in terms of our internet connection. We’re talking about the speed, pricing and customer support. If these will be fix, we might be in the competition.
We can also add the lack of support and awareness program of the Government. And I told you, the reason goes on and on.
On the other hand, this should not hindrance us in achieving the full potential like other developed countries. As you might already know, there are many Filipino are making big in terms of online business right now.
Many Pinoy tech start-ups are sky-rocketing their success and even goes globally. This only proves that we’re on our way in terms of digital transformation. Experts are seeing in the next 10 years or so, Philippines can have the most successful digital age in Philippine history.
Which is better?
Both traditional business and online business have their own advantage and dis-advantages. Both have their own limitation and capabilities. I guess it boils down to the person who are thinking to start which type of business he wants. It also depends on his goals, skills and knowledge, personality and many other factors.
In my own opinion, you must assess yourself first before starting a business. What are your goals, skills and experience? What are your core values? What is the problem you are trying to solve? How do you want to solve that problem? How do you want to help your potential customers? And many more. By knowing the foundation and fundamentals first, you can come up with a sound business plan.
One of my future goal is to build a sustainable online business. Those that can generate passive income for me and my family. And of course a business that help people. I don’t know what and how it can happen yet but I’m positive I can do it. For now, I will continue blogging and sharing valuable ideas to fellow Filipino until that dream come true. I hope you have your own goal too.
To our success, cheers!
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In my opinion, online businesses are commonly used nowadays. Especially when a person interacts with other people around the world. It is a very huge advantage as it would depend on the income and payment you get from customers online. This article is very informative and useful for incoming entrepreneurs, thank you for sharing.
But doing business online is not that easy. You need traffic to your blog or website. In order to drive traffic to your site. You need to learn SEO and SEO is not simple. You need to learn onpage and offpage SEO and you need expensive tools also to succeed in SEO if you don’t have a tool to do SEO you are just like a boat sailing without compass
This post compares traditional and online business models in the Philippines. While not directly addressed, AI chatbots like ChatGPT could someday aid customer service for both models. However, as noted, human insight remains key for building relationships and understanding nuanced needs. A helpful analysis of the evolving business landscape and the continued importance of human connection.
As AI like ChatGPT advance, retaining nuanced human insight should remain central in business analyses. While artificial content creation offers expediency, it often lacks discernment grounded in real-world experience. As technology transforms commerce, upholding wisdom should stay the focus.