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Running your business the Alibaba Way, with JC Bisnar

 

1. Being a leader isn’t about you. (1:18-1:47, 14:15-14:24, 15:25-15:36)
JC Bisnar used to believe that being a founder or CEO was all about the fame and fortune. Eventually, he realized that it entailed a more meaningful responsibility.

“As you grow your company, and you realize that you’re taking care of more people and customers or making an impact on the community, you’re going to realize that it’s not about your own success,” he said. “It’s about enabling your people.”

Consider the two paths to success: The diva and the mama-san. You could be the former, hogging all of the attention and profits. Or you could be the latter, staying quietly at the side, pulling strings among various networks for widespread benefit.

“The mama-san takes care of everyone. That’s leadership. The mama-san gets a cut from everyone. That’s a platform business,” he said. “[Investors] don’t see the network effects, the ability to scale, the power that you have when you reach out to all the users and you’re the top mama-san.”

2. Think big from the start. (18:02-18:19, 18:33-19:01)
With this kind of leadership, your startup has the opportunity to touch lives on a grand scale. This is only possible if you dream big about your impact from the get-go.

“The top businesses in the world… they have the ability to think long-term and focus on impact-building. And that’s why in the region, they forego the initial profits or the initial temptation, they stick to their long-term vision, and that’s where they scale.”

One way to support this is through your mode of funding. “Talk to all of the VCs here, that’s cool, but then talk to the regional VCs. Because in the region, they have higher valuations,” said Bisnar. “So it would be better if Filipino startups can peg themselves as a global company rather than just having a presence in the Philippines. Because [investors] would look down on us, that’s the reality.”

3. Remember the value of 9-9-6. (5:26-5:56)
While trying to reach such lofty goals may at times feel overwhelming for you and your team, the focus should be on the positive impact that your startup can create once they’re achieved. Once your team is able to take your mission into heart, the motivation to work even harder will just come naturally.

Take the principle of 9-9-6, which describes how the Alibaba staff often work from 9:00 AM to 9:00 PM for 6 days a week. “It’s not forced… but with the gravity of their goals, that’s the reason why they’ve gotten into this scale,” said Bisnar. “They put that extraordinary effort to reach that extraordinary goal. “So us Filipino founders, you can see the operational excellence in there. Do we just want to confirm to the ordinary corporate rules? Or do we want to put our hearts into it, the extra effort?”

4. Suffer optimistically — and grow stronger — together. (2:58-3:14)
Unfortunately, such noble pursuits can’t stop challenges from being thrown at your startup everyday. While it’s important to keep your team’s morale afloat, it’s just as vital to remain grounded by the reality of your problems.

During this time, train your team members to remain tenacious through difficult times.

“It’s not just about the founders being strong, it’s about the founders developing a strong team,” said Bisnar.

“While you have to be optimistic, leading them to the vision, you also have to pull them down with, ‘Hey, this is the reality. If we want to make this happen, then we better toughen up.”

5. “Feedback is a gift.” (8:37-8:55, 10:18-10:32, 11:08-11:20)
Speaking of being tough, this trait is just as crucial when it comes to giving feedback.

Filipinos are notorious for beating around the bush, crafting long-winded criticism to avoid hurting a colleague.
To turn this around, startups can try the 3-6-1 practice of feedback.

● Round 1: 10 team members will give feedback to each other. The leader will simply facilitate the process.

● Round 2: Each team member gives their feedback of their teammates to the leader.

● Round 3: The team leader gives feedback to each member. During this time, they will also give out scores transparently: Three will receive a 3.75 (“above expectations”), Six will receive a 3.5 (“meets expectations”), and one will receive a 3.25 (“below expectations”).

“The way that you have to explain it to your people is that, ‘Hey, feedback is a gift.’” said Bisnar. “Because oftentimes, the ones who are on the lowest scores, they transform that feedback and become the best versions of themselves.”

Living proof is Brian Wong, whose 3.25 score inspired him to work even harder. Eventually, this drive propelled him to the vice president position at the Alibaba Group.

“Appreciate the feedback because it’s rare where people will care enough to give you real talk that isn’t offensive, but is built enough to help you grow as a person,” said Bisnar.

Those interested in applying for the Alibaba eFounders Program can find more information at this link. The upcoming program class will take place from Dec 2 to 12. The deadline for applications is on Oct 7.

Living spaces for learning

Torre Lorenzo Development Corporation offers premium residences for students

The Philippines has always been regarded as one of Asia’s top intellectual centers, attracting students from all over the world, especially as the country marches towards progress. That potential is what property developer Torre Lorenzo Development Corporation (TLDC) aims to tap with their mission of offering Premium University Residences near the country’s top universities.

“The idea of Premium University Residences came to me after I studied abroad in the 1990’s and observed the disparity between students’ living quarters abroad with what was being offered in Manila at the time,” said TLDC Chief Executive Officer Tomas P. Lorenzo. “I realized this is a gap I can capitalize on. We don’t do dormitories; we do Premium University Residences.”

With a vision to revolutionize university housing, Mr. Lorenzo aims to provide students with a better living experience. The company recognized that the housing options available to students at the time were often cramped, dull, unconducive to learning. And many young people had to endure grueling commutes to get to school.

TLDC goes to great lengths to buck that perception of student housing and to offer Premium University Residences. The company always keeps the welfare and needs of its student residents in mind; from the time a property is chosen, to the project design concept, up to the time the unit is turned over and the student lives in it.

With its commitment to elevating student living, TLDC developed the Student First Program for their Premium University Residences. This is executed through four pillars: Safety First, Studies First, Balanced-Life First, and Convenience First. 

The company prioritizes its residents’ safety through 24/7 security, CCTV cameras, RFID with parent notification feature, and its proximity to schools. All of TLDC’s Premium University Residences are located near schools, so students don’t need to worry about commuting far.

TLDC helps students focus on their academic responsibilities by building environments conducive for learning, such as quiet study spaces and areas for group study which are WiFi-equipped.

“We found that learning transcends beyond the classroom and becomes a social activity that occurs in many places. Thoughtful attention to design allows for study time and collaboration,” Mr. Lorenzo said.

Projects are designed in a way that students can fulfill academic responsibilities and a balanced lifestyle. Socializing is a great way to grow and learn about life. To help students develop healthy relationships and take care of their physical well-being, TLDC provides state-of-the-art amenities such as swimming pools, fitness centers, half-courts, function rooms, and sky lounges.

The Premium University Residences are also equipped with convenient services to help make students’ daily lives easier. Services include 24/7 Resident Assistance, Touch Payment facilities for faster transactions, and commercial tenants that serve student needs like bookstores, coffee shops, restaurants, and banks, so residents do not need to go far for their daily needs.

TLDC residences also have an esteemed property management team that is intuitive to the needs of its student residents and ensures the properties’ maintenance and value.

“Furthermore, TLDC’s student residences are a sound investment option for entrepreneurial Filipinos. Investors can snap up a suite or two and then hand them over to the TLDC Property Management team which takes away the headache of unit leasing and ensures that the unit will be well-maintained. We have found demand to be high, both for rentals and for investment,” Mr. Lorenzo added.

Since the 1990s, TLDC has sought to keep the standards of university living higher and higher, moving them further away from regular dormitories. In fact, the company recently won “Best Boutique Developer” at the PropertyGuru Philippine Property Awards 2019.

Torre Lorenzo University Residences can be found near the country’s major universities, such as University of the Philippines Diliman and Manila, Ateneo de Manila University, Miriam College, De La Salle University Taft, De La Salle-College of Saint Benilde, St. Scholastica’s College, University of Santo Tomas, and University of Perpetual Help.

“We know how important study-life balance is to students and their parents, so we make sure that our projects are conducive to these,” Mr. Lorenzo said.

He added, “We strive to stay ahead of the curve by continuing to keep a dialogue with our residents — both students and their parents. We stay abreast with their needs and wishes to make our student residents feel as comfortable as possible while they’re away from home.”

Built for students

Students, particularly children of overseas Filipino workers and affluent households and those from foreign countries, are proving to be an attractive market for residential property developers, in addition to employees of Philippine Offshore Gaming Operators and the business process outsourcing industry and other professionals.

“Colliers believes that a mix of demand from offshore gaming employees and local professionals is helping sustain the Metro Manila residential market, partly driving demand for other segments such as dormitories that cater to professionals and students,” Joey Roi H. Bondoc, senior research manager at Colliers International Philippines, a real estate consultancy, was quoted as saying in a BusinessWorld report published earlier this year.

A growing number of developers are building high-rise condominiums and dormitories near schools with large student populations, like those in the capital city of Manila and Quezon City and other urban areas, where traffic problems are chronic and intractable.

Torre Lorenzo Development Corp. (TLDC) is one of the most notable players in the student-centric real estate sector today. Established in 2000, it is behind such properties as Torre Lorenzo Tower, 2Torre Lorenzo and Torre Central in Manila. The first two are situated near De La Salle University (DLSU), and the latter is a few minutes away from the University of Santo Tomas.

One of the firm’s latest projects is Torre Lorenzo Loyola, which is currently being built in Quezon City, in close proximity to Ateneo de Manila University, Miriam College and University of the Philippines Diliman. “We are expanding our footprint in this vital space as part of our pursuit to sustain the high standards we have long set for our student accommodations. Our upscale university residence strives to upgrade the quality of life of university students in the Philippines,” Tomas P. Lorenzo, president and chief executive officer of TLDC.

But the residences of TLDC are not only targeted to local students but to foreign students as well, whose numbers steadily grew from 2015 to 2017, according to available government data. Mr. Lorenzo said, “TLDC also wants to capitalize on this growing trend by making our properties the top choice for foreign students pursuing their education here in the country.”

Another property developer, Federal Land, Inc., through its unit Horizontal Land Property Development Corp., launched last year its Quantum Residences project on Taft Avenue in Pasay City. It will consist of three towers, each having 35 floors, and is being constructed on a 5,960-square-meter lot. It is located near a number of big tertiary institutions, including DLSU, Philippine Women’s University and Arellano University.

“The dormitory is for sale. It’s used as a dormitory, but it’s actually units for sale that’s designed for students. That will mostly be studio types,” Carmelo Maria Luza Bautista, president of GT Capital Holdings, Inc., said at a media briefing in August of last year. Federal Land is the property arm of GT Capital.

The development will offer 2,693 units, ranging in size from 21.50 square meters to 49 square meters. There will be studio, one- and two-bedroom types. Aside from students, these units are also aimed at start-up families and young professionals.

Back in 2017, SM Development Corp. (SMDC) unveiled its three-tower development Green 2 Residences in Dasmariñas, Cavite, in order to take advantage of the large student population there. This development will occupy roughly 1.6 hectares of land.

“… Green 2 is our first project in Cavite. We are inspired by the success of our school hub projects, starting with Sun Residences in University Belt, Blue Residences in Ateneo, Green in La Salle, and these have had very strong rental income for our buyers,” Jose Mari H. Banzon, executive vice-president at SMDC, said at a media round table last year.

Three tertiary schools in the Dasmariñas — DLSU Dasmariñas, De La Salle Health Sciences Institute and Emilio Aguinaldo College Cavite — have an estimated population of 20,000 students. According to a BusinessWorld report, SMDC expected that population to grow by 2% annually. SMDC calls areas like this in the city “University Towns.”

“There are two ways of investing in the area and leasing out the business. If you have a unit, you can rent it out to students for a long-term lease, you can serve the college population… We also have an alternative market for short-term lease rates… for faculty members that are visiting, doctors and nursing staff, parents of visiting children, conferences and seminars in the campus,” Mr. Banzon said.

What to look for in a student condo

The college years are a very important chapter that completes one’s academic journey. It is a time when students are being prepared for the real world, not only in terms of honing knowledge and skills but also in terms of gaining valuable experiences. For such reasons, a home near a university or college is a helpful asset to a student’s success and growth during his or her stay.

At present, there are many condominiums within Metro Manila located near schools, offering both current and future students a better alternative to dormitories or near-campus housing. It is important, therefore, to wisely choose a condominium that will make one’s college life more productive, more enjoyable, and more memorable.

The location is one of the first things to consider in choosing a condo. As much as possible, a condo that is a few walks away from the school will bring a great benefit to the student, since it cuts the time and energy spent by commuting far from campus.

Security should also be a priority. As much as the school should be a safe space for students, the condominium itself should also have the necessary features that ensure the security of its tenants.

In an article, online real estate marketplace Lamudi Philippines said, “Most condominium buildings have 24/7 security, including guards, CCTV, and other measures to ensure the safety of residents. There are also some projects that implement the latest security technologies, such as RFID access cards to prevent non-unit owners from gaining access to the property.”

Since a condo should make life easier and more efficient for the student, convenience is another very important factor to consider. The condo should have the utilities he or she definitely needs to do schoolworks such as a high-speed Wi-Fi connection and electrical sockets for phones and laptops.

Also, there should be adequate supplies of water, lighting, ventilation, and electricity, among others.

Furthermore, Lamudi Philippines shared that student-centric condos “often have student-friendly facilities on sites, such as study rooms or other quiet areas that will allow students to concentrate on their work. Some properties even have libraries so that students will not have to stay in school for research.”

“Condo buildings also often have commercial establishments at the lobby, such as convenience stores and restaurants that deliver food,” it added. “This provides residents with convenience for their daily breakfast, lunch, and dinner so that they will not have to go far from home just to eat.”

A condominium’s environment is also worthy to note. The real estate marketplace recommends looking into key points such as cleanliness, waste segregation, noise, pollution, and the general population of the building and the community surrounding it.

College life inevitably has its stressful and even exhausting periods. The condo, therefore, should also serve as a place for students to relax, unwind, and recharge. Amenities are another worthy consideration, since condominiums have a lot of them, including gyms, jogging paths, swimming pools, game rooms, courts, landscaped parks, lounge areas, and gardens — all of which will further make a student feel more at home even in somewhere far from home. — Adrian Paul B. Conoza

DoE issues fresh ‘open access’ guidelines

A CIRCULAR of the Department of Energy (DoE) that gives retail electricity users a choice of suppliers has taken effect, prodding the retail competition and open access (RCOA) scheme forward.

Department Circular No. DC 2019-07-0011 amends various DoE issuances implementing RCOA, which is provided under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) to allow greater competition among power sellers by letting “contestable” consumers — or those whose consumption has reached a set threshold — choose their electricity supplier.

“Consistent with the definition of open access, CCs (contestable customers) are hereby allowed use of transmission and distribution systems and may voluntarily register as a trading participant in the WESM (wholesale electricity spot market),” according to circular, which was published in newspapers on Aug. 14.

The circular, which took effect 15 days after publication, has also been posted on the department’s Web site.

EPIRA mandates that upon initial implementation of “open access,” the Energy Regulatory Commission (ERC) is to allow electricity end-users with a monthly average peak demand of at least 1 megawatt (MW) for the preceding 12 months to be part of the contestable market.

Two years after, the threshold for the contestable market is to be reduced to 750 kilowatts (kW). At this level, aggregators are allowed to supply electricity to contestable customers whose total demand within a contiguous area is at least 750 kW.

After every year, the ERC will evaluate the market’s performance and use findings as basis for gradually reducing the threshold level until it reaches household demand level.

“Consistent with the objectives of EPIRA and its implementing rules and regulations (EPIRA-IRR), and other applicable rules and regulations, a CC shall source its electricity supply requirement from ERC-licensed/authorized suppliers,” the circular states.

The circular also directed the ERC to issue rules necessary to implement the system with 30 calendar days from its effectivity.

The new rules amend some sections of DC2012-05-0005, which states that — consistent with the definition of open access — contestable customers “are hereby allowed the use of the transmission and distribution systems and shall therefore be integrated into the WESM. For this purpose, all CCs shall become members of the WESM as trading participant directly or indirectly…”

Under the new circular, the market operator is directed to recommend to the DoE the appropriate changes on existing WESM rules, retail rules and market manuals to carry out policies for the further development of RCOA.

Retail electricity suppliers (RES) have been awaiting developments in this business segment after the Supreme Court issued a temporary restraining order on the RCOA rules that stopped the lowering of the consumption threshold for contestable customers.

ERC Chairperson and Chief Executive Officer Agnes VST Devanadera had said her office would defer issuing new RES licenses until the court will have lifted its order.

Some retail suppliers have been doing business despite their expired licenses. Those with valid licenses expect theirs to lapse in the coming months.

Officials of the DoE and ERC did not immediately respond to questions on whether the new circular will circumvent the court’s hold order and whether expired licenses will be renewed or new ones will be issued. The DoE did not validate whether the new circular is now in effect.

According to the latest data from the Philippine Electricity Market Corp., the country as of the first quarter had a total of 1,240 registered contestable customers, up from 1,198 as of the previous quarter.

The market recorded a total of 31 registered retail electricity suppliers (RESs), 14 registered local RESs, or affiliates of distribution utilities that sell within their franchise areas.

Majority or 1,119 registered contestable customers were in Luzon and the remaining 121 were in the Visayas. Of the total registrants, 19% were in the 750 kW-999 kW contestability threshold, while 81% were in the 1 MW and above threshold.

The total energy consumption of the registered contestable customers for the first quarter of 2019 stood at about 4,477 gigawatt-hours. This consumption level accounts for about 24% of the combined energy use of the registered contestable customers and the captive customers, or those sourcing power from franchised utilities.

If the new circular is not questioned in court, retail electricity suppliers will be competing for 34% of the 1,884 electricity end-users that have been issued “certificates of contestability” but have not yet registered in the market. — Victor V. Saulon

Senators zero in on poor gov’t spending, revenue leakage

THE SENATE Finance committee on Thursday grilled state economic officials on low disbursement and revenue leakages as the chamber began hearing the proposed P4.1-trillion national budget for 2020.

Senator Emmanuel Joel J. Villanueva, vice-chairman of the committee, questioned the absorptive capacity of state offices that will receive bigger allocations despite a low disbursement record.

“Among the biggest gainers in this year’s budget across the different sectors you presented this under the NEP (National Expenditure Program) is the communications, road and other transport sector, whose budget is to increase by 27%, equivalent to an additional hundred billion,” Mr. Villanueva said, addressing representatives of the Department of Budget and Management (DBM).

“From P496 billion to P630 billion, however, ito pong mga concerned agencies… have been constantly and consistently showing very dismal utilization performance.”

The Development Budget Coordination Committee was holding a briefing in the Senate on the proposed 2020 national budget, which is 12% more than the P3.662-trillion budget this year and is equivalent to 19.4% of projected gross domestic product (GDP).

Among others, Mr. Villanueva noted that the Department of Public Works and Highways spent just 39.72% of its P752.16-billion allotment in 2018.

Acting Budget Secretary Wendel E. Avisado said the Executive pushed a cash-based budget for 2019 — based on the spending record of state offices and which will force them to disburse allocations within the fiscal year — precisely to address the government’s chronic underspending. Before 2019, obligation-based budgeting provided for validity of funds for up to two years.

“The possible solution that we were looking at is the adoption of a cash-based budgeting system. We wanted to make sure that whatever is funded for the year is really implemented within the year,” Mr. Avisado told senators, while citing “[t]he possible enactment for example of the budget modernization law… to shift to the one year validity of appropriation to encourage spending agencies to utilize their funds within the year and reduce an obligated balances.”

In the 17th Congress that ended on June 3, the budget reform bill secured final-reading approval in the House of Representatives in March 2018, but failed to get Senate approval.

The same hearing saw Senator Panfilo M. Lacson, also committee vice-chairman, citing a P82.181-billion “discrepancy” between the Bureau of Customs’ revenue collection from products brought in from China and the regional giant’s exports to the Philippines, according to a 2017 World Bank report.

Department of Finance officials blamed leakage due to undervaluation and tax evasion.

This, the officials said, is why it is crucial to approve remaining tax reforms.

“The executive branch will continue to be engaged with the legislature in passing the remaining tax reform packages that will generate additional revenue streams for government to fund social amelioration programs,” Finance Undersecretary and chief economist Gil S. Beltran told senators.

Latest available DBM data showed state infrastructure and other capital outlays dropping by 11.7% to P311.4 billion last semester from P352.7 billion in 2018’s first half, and missing a P392.9-billion target for the period by 20.8%.

The government plans to spend P861.2 billion on infrastructure this year, 24% of the P3.662-trillion national budget that was signed into law on April 15, four-and-a-half months late.

The government and private economists blamed the delayed budget for a disappointing 5.5% GDP growth last semester, that compared to an already tempered 6-7% official full-year goal for 2019.

For next year, the Executive branch has proposed P972.5 billion in infrastructure funds, about 12.9% more than this year’s allocation and also 24% of a proposed P4.1-trillion national budget. — Charmaine A. Tadalan

Philippines targets more markets for its products

THE PHILIPPINES is moving to expand the reach of its products, setting its sights on Africa, South Asia, Central Asia and Eastern Europe, the Department of Trade and Industry said in a statement on Thursday.

The government has been setting outbound business matching missions (OBMM) with countries where it has spotted trade potentials.

The department said it recently concluded an OBMM in Mexico and is scheduling more sessions in India, Bangladesh, Russia, Egypt and Ethiopia.

“These markets were chosen based on the country’s economic growth, gross domestic product per capita, population, ease of doing business, political climate, and the Philippines’ trade and foreign policy directives,” it said.

At a March 5-7 trade fair in Guadalajara, Mexico, the department said Filipino exporters got the chance to introduce local products to the biggest trade show in that country.

The department noted that Mexico has the biggest consumer potential in Latin America, as its food and beverage consumption is projected to grow by 15% next year.

In a separate statement, the department said it organized one-on-one meetings for 15 Philippine exporters with an Argentinian businessmen earlier this month.

Aside from Mexico, business matching missions are also under way in Mumbai, India and Dhaka, Bangladesh which will run until Sept. 4.

The Philippines’ bilateral trade with India was worth $2.28 billion last year, making the regional giant the Philippines’ 15th trading partner, 16th export market and 14th import supplier. The Philippines had a $1.2-billion trade deficit with India, hence, “it is beneficial to boost exports in India’s growing market,” the department said in its statement.

Bangladesh was the Philippines’ 56th trading partner, 62nd export market and 50th import supplier last year. The Philippines exported $20.3 million to and imported $38.9 million from the South Asian country last year.

For next quarter, the department said it has lined up business matching missions in Ethiopia and Egypt, as well as trade missions to South Africa, Mozambique and other key African markets.

Philippine Statistics Authority data showed merchandise export sales contracting by 0.82% to $34.113 billion last semester from $34.397 billion a year ago, and import bill dropping by 0.959% to $53.117 billion from $53.632 billion in the same periods. — Denise A. Valdez

Scorsese teams with TV makers to upgrade movies at home

HOLLYWOOD’S biggest filmmakers have struck a deal to make watching movies at home more like they intended — even as they fight to keep the cinemas relevant.

Directors including Martin Scorsese, Patty Jenkins, and Ryan Coogler on Tuesday revealed a new Filmmaker Mode for upcoming TVs from LG Electronics Inc., Panasonic Corp., and Vizio Inc. that eliminates technical features that have frustrated the industry.

The new mode gets rid of features like motion smoothing that are added to movies when they’re adapted to smaller screens. The features make a movie look different than it does in theaters, especially on today’s larger TVs, and that has been a source of frustration for directors and others.

While some of the changes may only matter to cinephiles, the initiative highlights the growing importance of home viewing, especially as giants like Apple Inc. and Walt Disney Co. focus more on video streaming.

“There is this recognition that the home-viewing experience is increasingly important,” said Michael Zink, a Warner Bros. executive and chairman of the UHD Alliance, which led the initiative. Scorsese said in a statement that classic movies are more often seen in homes than theaters.

Today’s televisions have settings that automatically raise the brightness of the screen and speed up frame rates to better render sports or gaming. But those changes alter what filmmakers want viewers to see in their movies.

The Filmmaker Mode can be accessed via a remote or automatically activated by the television based on embedded data. Coogler, the director of Black Panther and Creed, said it’s important to improve home viewing because “that’s where cinema is watched and rewatched and experienced by families.” — Bloomberg

Martin Scorsese’s The Irishman to get 26-day run in theaters before debuting on Netflix

MARTIN SCORSESE’s highly anticipated new mob drama The Irishman may turn into a case of “catch it if you can” as far as traditional moviegoers are concerned.

Netflix Inc. said on Tuesday that the movie, starring Robert De Niro and Al Pacino and already generating Oscar buzz, will get a limited 26-day release in independent US movie theaters starting in November before arriving on the streaming platform.

Netflix said it planned to keep the movie in theaters for an unspecified period beyond the streaming launch, however.

The announcement follows an impasse in negotiations for a more traditional movie rollout between Netflix and major theater chains like AMC Entertainment Holdings Inc. and Cineplex Inc., according to The Hollywood Reporter.

Movie theater chains prefer an exclusive 90-day theatrical window before a film can appear elsewhere; Netflix wants to offer its films to subscribers sooner.

While the limited release starting Nov. 1 in independent movie theaters will not affect awards eligibility for The Irishman, the decision reflects the tension between filmmakers, who like their work shown on big screens, and streaming services that have upended Hollywood’s traditional business models.

Scorsese, one of Hollywood’s most influential directors, did not respond to a request for comment on Tuesday.

But De Niro, who is also a producer, told Reuters earlier this year that he, Scorsese and other producers hoped The Irishman would “have as much theatrical as possible.”

Hollywood website Deadline on Tuesday reported that British art house chain Picturehouse and European movie chain Vue will not screen the film due to the limited theatrical window.

The National Association of Theater Owners, whose members include the largest movie theater chains in the world, declined to comment on the Netflix announcement.

The Irishman, a saga of organized crime in America spanning several decades, chronicles the mysterious disappearance in 1975 of labor union boss Jimmy Hoffa, played by Pacino.

The film, which features costly “de-aging” technology as its protagonists move back and forth in time, will get its world premiere at the New York Film Festival on Sept. 27. Despite not having been seen, it already tops several US critics lists as a likely Oscar best picture contender next year.

Netflix picked up The Irishman from Viacom Inc.’s Paramount Pictures in 2017 after ballooning costs. The film cost $159 million to produce, according to a source familiar with the situation.

Netflix’s limited theatrical release of The Irishman is similar to that of Alfonso Cuaron’s black-and-white movie Roma, which ran exclusively in theaters for 23 days. Roma went on to win three Academy Awards in February but missed out on the coveted best picture prize. — Reuters

McDonald’s operator expects sales boost from NXTGEN stores

GOLDEN Arches Development Corp. continues to modernize McDonald’s outlets in the country. — ARRA B. FRANCIA

By Arra B. Francia, Senior Reporter

GOLDEN Arches Development Corp. (GADC) sees sales improving by about 10% as it continues to modernize existing stores, with more customers getting used to self-order kiosks and cashless payments.

The master franchisee of the McDonald’s brand in the Philippines currently has 95 NXTGEN stores out of more than 620 branches under its network. These stores feature a multi-point ordering systems, modernized menu boards, and a new design that aims to elevate customer experience.

“So far we’re seeing an uplift of sales between 5-7% after the store is converted to NXTGEN,” GADC Managing Director Margot B. Torres told BusinessWorld during the opening of their newest NXTGEN store in Bonifacio Global City (BGC) on Thursday.

Ms. Torres expects this trend to continue as they put up more NXTGEN stores.

McDonald’s at Finance Center is the newest store under its network. With a capacity of 132 people, it will be one of eight NXTGEN stores that the company operates in BGC alone.

Ms. Torres said the company expects to have more than 700 stores by the end of 2021, 70% of which are expected to be NXTGEN stores. By end-2019, the company aims to end with 670 branches.

To further help customers transition into NXTGEN’s system, the company also appointed guest experience leaders who can assist customers when they order through the self order kiosks and entertain other concerns.

Ms. Torres said they observed that more people prefer using the self-order kiosks rather than the traditional order points.

“They have a certain level of control, meaning you don’t have to rush, you don’t have to line up. They also have a certain level of control in the choices they have and they can see the prices depending on what orders you add,” Ms. Torres explained.

GADC also has 185 stores under its network that offer cashless payments like Paymaya.

Ms. Torres said NXTGEN stores usually cost 10% more than the regular stores, with most of the additional investment going to changes in technology.

Moving forward, Ms. Torres expects the quick-service restaurant industry to grow by 4-5%, driven by the more players coming in to the market.

“There will be growth in the informal eat out market, and usually we’re growing faster than the informal. That’s why we’re also very bullish about our own growth,” Ms. Torres said.

On the downside, the company sees the rising cost of goods to weigh on profitability, especially the higher tariffs on potatoes amid the US-China trade war.

GADC is led by businessman George T. Yang, who holds the master frachise for the McDonald’s brand in the country.

The company reported flattish growth in attributable profit at P751 million in the first half of 2019, following a 14% increase in sales to P15.4 billion.

YouTube builds new site for kids after criticism

YOUTUBE said it will launch a separate website for children after the Google-owned service was criticized and investigated for showing inappropriate videos to kids on its main site.

The new site, an online version of the YouTube Kids mobile app, will go live this week, according to a statement posted Wednesday by the company.

YouTube also said its Kids app and website will get new categories for different ages. Preschool will be for children who are four years old and younger. “Younger” is for ages five to seven and “Older” is for those ages eight to 12.

“We know that what is great content for a four-year-old may not be great content for a 10-year-old, which is why we want to make it easier for parents to select the right content for their kids on YouTube Kids,” the company said in the blog post.

YouTube has been criticized for letting inappropriate, misleading and sometimes violent videos spread on its service. For years, executives were unable or unwilling to address the problem as they pursued aggressive viewer “engagement” targets, Bloomberg News has reported.

Videos targeting children have been particularly problematic, partly because YouTube doesn’t manually review all clips and its software can’t easily identify what content is appropriate for young viewers.

The Federal Trade Commission is looking into whether YouTube breached the Children’s Online Privacy Protection Act (COPPA). The agency has reached a settlement with YouTube, but hasn’t released the terms. To satisfy regulators, YouTube officials are planning to end “targeted” ads on videos that kids are likely to watch.

On Wednesday, YouTube warned parents that it still won’t be able to spot all inappropriate videos. “Our systems work hard to exclude content not suitable for each of these age categories, but not all videos have been manually reviewed,” the company said. “If you find something inappropriate that we missed, you can block it or flag it for fast review.” — Bloomberg

SLI to conduct follow-on offering

STA. LUCIA Land, Inc. (SLI) is looking to raise up to P8.40 billion from a follow-on offering within the year to finance its capital expenditures.

In a preliminary prospectus filed with the Securities and Exchange Commission (SEC), the listed property developer said it will offer up to three billion common shares to the public, consisting of 2.7 billion primary offer shares and 300 million for the over-allotment option.

At a price of P2.26 to P2.80 each, SLI could raise anywhere from P6.78 billion to P8.40 billion.

SLI expects to net P8.117 billion from the offering, should it completely exercise the over-allotment option and secure the maximum price for each share. About P6.78 billion of the proceeds will go to capital expenditures for new and ongoing projects.

The company will use P820 million for landbanking purposes, while the remaining P517.79 million will go to general corporate purposes. The funds are expected to be disbursed from the fourth quarter of 2019 until 2020.

Most of SLI’s upcoming projects are in Central Visayas, Western Visayas, and the Calabarzon Region. It also has developments in the Davao Region, Soccsksargen, Mimaropa, the Cordillera Administrative Region, and Metro Manila.

The developer’s prospective land acquisitions are also located in the provinces, most of which are in Calabarzon.

SLI tapped China Bank Capital Corp. as the offering’s issue manager, underwriter, and bookrunner.

The company’s public float will reach 26.79% upon listing, with its market cap to rise up to P31.35 billion.

Depending on regulatory approvals, SLI looks to finalize the issue price by Nov. 12. The offer is set to run from Nov. 18 to 29, in time for listing on Dec. 9.

SLI’s registration will need approval from the SEC and Philippine Stock Exchange.

The company earlier said it will spend P20 billion in capex over the next three years to expand its residential and commercial properties in the country.

At the same time, it will launch a combination of 28 residential and commercial projects, in addition to five condominium and hotel projects that could potentially generate P20 billion in reservation sales.

SLI’s net income attributable to the parent doubled to P883.74 million in the first half of 2019, against P432.61 million in the same period a year ago. Gross revenues also grew 70% to P3.496 billion.

Shares in SLI fell 2.05% or five centavos to close at P2.39 each on Thursday. — Arra B. Francia

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