Philippines: The world’s BPO & social networking capital!

Michael Alan Hamlin

Posted on May 19, 2011

Are you getting used to seeing the Philippines at the top of lists? Lists that say good things about this country that for decades has been the acknowledged black sheep of Asia, coming in last or near last in such rankings as foreign investment, transparency, and corruption. Yet late last year Everest Group reported that the Philippines had overtaken India in the number of people employed by the IT-BPO and shared services industry.

The results of an IBM study—The Global Location Trends Report—announced about the same time showed that the Philippines had also over taken India in terms of revenue. Three weeks ago, I wrote that comScore—which measures Internet activity—announced last year that the Philippines had the highest Facebook penetration among Internet users of any country in the world.

On May 9, 24/7 Wall Street—which purports to offer analysis and commentary for investors—proclaimed the Philippines the “Social Networking Capital of the World.”

Of course, the Philippines has been the SMS capital of the world for more than a decade, with the average user sending 600 text messages a month. That’s impressive in terms of the mass adoption of social technology, but that lofty status had little impact on global perspectives of the Philippines, except perhaps that it was used to organize the overthrow of a legitimately elected president. Since then, SMS has been a valuable tool along with social networks in organizing mass protests against a number of authoritarian leaders around the world.

Nevertheless, with a large population and an economy a fraction of the size of those of its smaller neighbors, observers might well have asked about the Philippines’ SMS prowess, “What are all these people doing texting all the time? They should get to work!”

Is being at the top of the social network pinnacle—leading Israel, Turkey, Chile, Argentina, Malaysia, Indonesia, Peru, Columbia, and Venezuela, in that order—any different? The Philippines’ status as IT-BPO and shared services capital of the world seems mighty substantial in comparison. The industry employed 525,000 people and generated P9 billion in revenues in 2010, about half of the amount 10 million overseas workers send home annually.

It’s impossible to estimate the value to individual Filipinos that SMS generates, although it is used heavily for business as well as social purposes. Carrying on a business relationship without the benefit of SMS is hard to imagine. Customers and colleagues expect to be able to contact relationship managers and superiors when they need to; which is to say, anytime they want. How do you value that kind of convenience?

It seems far less likely that B2B deal making is facilitated through social networks, but they provide real value nevertheless. An annual study of Internet activity conducted by Universal-McCann offers some insight.

Over the past two years, the number of Internet users globally visiting a brand website has decreased from 86% to 76%. But from 2009 to 2010, Internet users affiliating with or becoming a fan of a brand on a social network increased from around 10% to 30%.

More than 40% of Internet users join social network groups that talk about brands. With about 30 million Filipinos using the Internet according to a UN study, if I were a brand manager who didn’t take social networking seriously, those statistics would send digital shivers down my spine.

How do you value the damage from that oversight? Well, consider that the Philippines is number two in the world—not quite the capital—in terms of Internet users who join brand communities. Only Thailand has a higher percentage of Internet users joining brand communities, according to Universal-McCann. The principal reason users join brand communities is to learn about product and services; and second, to get advance news on new products and services.

To understand the impact on the brand, consider that 72% of brand fans surveyed by Universal-McCann said they thought more positively of the brand as a result of their interaction on the brand fan page. Over 70% said they were more likely to buy the brand as a result, and 66% said they felt more loyal to the brand. Sixty-three percent said they would recommend the brand fan page to others.

These results show that Internet users who join brand pages on social networks are engaged customers, and really do have a meaningful relationship with the brands they support. While there are the inevitable tradeoffs to deal with as a result of social network visibility—such as open criticism and competitive transparency—the risks associated with invisibility in a competitive marketplace seem far scarier.

And that’s what it means to be the social networking capital of the world.

(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand. Write him at mahamlin@teamasia.com and follow him on TwitterFacebook and LinkedIn.). Copyright © 2011 Michael Alan Hamlin. All Rights Reserved.)

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