Agility amid COVID-19: Firms in Philippines adopt e-commerce, consider shifting manufacturing facilities
The measures are meant to counter disruptions brought by the pandemic, such as reduced foot traffic to brick-and-mortar stores and difficulties in goods transportation.
The demand for health supplements would continue to grow and the key lies in the companies’ ability to reinvent themselves, Leni Olmedo, chairman of the Health and Dietary Supplement Association of the Philippines (HADSAP), told NutraIngredients-Asia.
Citing a survey conducted by International Alliance of Dietary / Food Supplement Association (IADSA), she said that the demand for health supplement remained high across the globe.
In particular, the demand for immune supplements and self-care products such as hygiene and essential oil could grow even in the midst of the economic crisis.
Citing Amway Philippines as an example, Olmedo, who is also the country manager of the company, said that there was a surge in demand for “essential” categories, such as the companies’ Nutrilite food supplements and the cleaning, disinfectant products.
“Non-essentials” such as color cosmetics and luxury skin care were negatively impacted.
While the number of new Amway Business Owners (ABOs) dropped in the first month of the country’s lockdown, she said it recovered and gained momentum immediately after the initial drop.
The key strategy to move forward, she said, was whether the companies were able to reinvent themselves to meet consumers’ needs.
“I think it’s a matter of the companies’ agility, whether they are agile enough to move their operations from the old ways of doing things to the new normal.
“Only then you will be able to capture a sizable portion of the growing market of immunity and self-care,” she said.
E-commerce, contactless measures
Companies would need to invest in new technologies, be it e-commerce or contactless purchase system in physical stores, Olmedo said.
As this might require substantial resources, companies would need to prioritise their most important needs.
“It is a matter of prioritising. Instead of physical stores, companies could invest in online platforms. If they have physical stores, they can then invest in contactless purchase system,” she said.
“A huge majority of purchases will have to happen online. There is still fear of contracting the disease, security and safety is still the number one concern of shoppers. We will have to follow what the consumer behaviour is.”
Out of the 25 HADSAP members, half of them are direct-selling companies, and she said that this was the group which adapted to the changes most quickly.
Most were already operating their online shops before COVID-19 happened, while the non-direct sellers tend to rely more on the drugstores.
Nonetheless, she said that about half of the member companies which did not have e-commerce capabilities had managed to put their products up on e-commerce sites such as Zalora.
Moving manufacturing facilities
For some, their business continuity plan (BCP) amid COVID-19, is to build their factory facilities outside of metro Manila.
Doing so will help the companies continue to supply their products to other regions within the Philippines if metro Manila was under a lockdown.
“From what I heard, for some of them, their BCPs is to move facilities outside of the metro, but the execution is not immediate.
“There’s considerations on the capital expenditure, you have to make sure you hire the right people, and whether people could relocate. It isn’t something that you can implement right away,” she said.
In terms of the ingredients’ supply chain, she noted that members were still able to import them from different countries.
Philippines fell into recession for the first time in 29 years, with GDP in April to Jun dropped 16.5% as compared to the same period last year.
The government had implemented a two-week lockdown which ended yesterday to control the spread of the virus, during which, the public transport services were suspended.
