US-BASED courier service company FedEx Corp. is banking on micro, small and medium enterprises (MSEs) and the e-commerce industry to drive its growth in the Philippines.
In an interview with BusinessWorld, FedEx Express Philippines managing director John Peterson said the value of the e-commerce market is projected to soar to $9 billion by 2025, from its $500-million value in 2015.
“The MSMEs really are the key drivers, I think to be able to sustain the economic growth here in the Philippines. DTI (Department of Trade and Industry) says that 99.6% of all the registered enterprises here in the Philippines are MSMEs and if you look at the export revenue, total export revenue in the Philippines, 25% of that total export revenues are derived from the MSMEs sector… It’s going to be a huge driver for economic growth and so a lot of these companies are starting to play into the e-commerce segment as well,” he said.
FedEx is poised to tap into the growing MSME market, as more companies enter the e-commerce space.
“So, what that means is that there’s more deliveries, there’s more returns, there’s more goods purchased in the internet. FedEx is able to play in that spot because we’re able to give solutions to the customers who want to be engaged in e-commerce and they want to be able to expand in the market further just like in the Philippines to be able to sell to customers overseas and be able to purchase materials that they may not be able to source here locally,” Mr. Peterson said.
FedEx is also looking to strengthen the supply chain with MSMEs to allow them to compete with larger global brands.
“You have the track-and-trace capability of FedEx, you have FedEx global returns, where you purchase something on the Internet, and if it’s not in the right size, or it’s not the right commodity, you can have it returned by FedEx so these are the solutions that the MSMEs are able to take advantage of with a company like FedEx,” he said.
The company continues to expand its operations in the Philippines. Last year, FedEx began operating its IT center in Bonifacio Global City, Taguig City, which supports the Philippines and nearby countries. It also opened a trade facilitation center in Clark, Pampanga which does customs clearance work for Japan, Singapore, and Taiwan.
“We’re expanding in the Philippines and the economy is very strong here so we’re making those sorts of decisions here,” Mr. Peterson said.
The FedEx chief is bullish on the Philippine economy, citing the government’s aggressive infrastructure program.
“I think we all know that traffic is a challenge for us here in the Philippines […] It can be a challenge that we can get all the shuttles get there on time. But with the expressway, the government’s ‘Build, build, build’ program, and the investments that the country is making on infrastructure, there’s an opportunity for us that we will overcome, the traffic situation, I believe,” Mr. Peterson added.
Mr. Peterson also pointed out the Department of Finance’s push to modernize customs rules and procedures for easier processing of inbound and outbound goods.
“I think the new Customs Modernization Tariff Act is fantastic. It was timely, needed legislation that provides great opportunities for importers and exporters here in the Philippines. I think the Philippines is taking the right steps to continue the sustained growth they have here,” he added. – Anna Gabriela A. Mogato
