A candid and personal examination of the Philippine comics scene from a social, cultural, economic and business point of view.

Sunday, September 25, 2005

The Return of Filipino Komiks' old target market: the C-D-E low income groups

When several natural, economic, and political difficulties faced the country during the decade of the 1990s, the financial situation of low-income individuals was affected. It got worse steadily.

Half of the country's middle income class got poorer consequently increasing the size of the C, D, and E low income groups. To cope, many became overseas contract workers leaving their families behind. The nation's wealth meanwhile, got smaller and smaller with each passing year, most of it being held by an elite rich few who now had the purchasing power to control the market. Make no bones about it. Unequal distribution of wealth is very real and a fact of life in the Philippines.

Possessing the all important purchasing power, the elite rich few then became the target market of most businesses and advertisers in the country. Products that catered to their various lifestyles and tastes came to the fore. Nowhere is this most evident than in the Philippine comics scene today where we see the dominance of imported and licensed American and Japanese comics. Most of these comics have prices that are beyond the reach of low-income groups and are sold in places where the A, B income class usually congregate.

So pervasive, so overwhelming is the media influence of American and Japanese comics that most of today's generation of Filipino comics creators likewise target the same elite A, B income group by aping and emulating the concept and styles of the American and Japanese. The result of such endeavors is what this blogger calls: "globalized" Filipino comics which really strain behind the lame excuses of artistic freedom and eclecticism.

Yet, recent developments indicate a possible turn of events. It seems that the collective purchasing power of the C, D, and E "masses" are staging a comeback. Somehow, a saturation point has been reached in the limited A and B income market. Businesses and advertisers are now slowly being forced to focus back on the masses as a target market.

The success story of Smart Communications, Inc., the Philippines' No. 1 cellfone service, is being held up as a rallying point. In a news article appearing in the September 25, 2005 issue of the Manila Bulletin entitled: "Focusing business on low income groups is profitable" by Iluminado Varela, Jr., important research data is disclosed concerning this new and significant development. The news article is herein reproduced in full:

"MANILA (PNA) -Focusing business on the low income groups can spell big success. This has been proven in the telecommunications services by Smart Communications, Inc.

According to the World Resources Institute, a US-based research center, "The special focus of Smart Communications Inc. on the low income segment of the Philippine population is a success story that has made it the No. 1 wireless carrier in the country."

Once ignored--in fact written off--by the telecommuications experts, the C-D-E market was the focus of the Smart marketing strategy which enabled the company to raise revenues and prepaid subscriber base to gain notice from the business community.

"Overall, Smart has paid close attention to the reality of its Filipino market. With as much as 90 percent of the population in the D and E income segments, many in the Philippines are beginning to acknowledge consumers in the lower-income-bracket as those who are keeping the country's retail industry afloat, proving true the adage that there is strength in numbers," says the study.

According to the study, Smart's ability to understand the spending habits and limited cash flow of its individual consumers generated a ripple effect in the low income community.

The study says that "not only did Smart's approach with the telecommunications services to be finally within reach of the majority of Filipinos, but their aplications have helped to generate real revenue and opportunities for small Filipino entrepreneurs."

According to the study, Smart's success stems from its "base of the economic pyramic (BOP) market organization from the start.

The Smart load payment scheme targeted the low-income practices and created a network of over 500,000 retailers, including sari-sari stores, teachers and students, housewives, employees and other 'roving agents".

Retailers complete transactions using SMS (short messaging system) as well, but Smart catered a special system to their needs, including a unique menu and a specially designed subscriber identity module (SIM). Smart says that some retailers earn up to 1,000 pesos per day in reload sales.

The study says that Smart's innovative approach minimizes physical product distribution costs and creates a demand-response stocking system for prepaid airtime, reducing risk across the firm. Product distribution is now faster, more efficient, and as the company claims, more secure.

The World Resources Institute concluded: "Smart came to this realization earlier than most Filipino businesses and designed their business model to target these segments from the beginning. The result is that Smart's BOP oriented business model, in particular their Smart Load product, has had a real impact on their overall financial success on the low-income customer they serve."

Those seriously interested in going into comics publishing should take note. If the trend towards the low income groups continue, the next wave of Filipino comics should take into prime consideration the economic lifestyles and tastes of the various groups within this new target market which means in essence, producing non-expensive, non-glossy, non-english language, Filipino comics. Businesses will most surely adopt to the situation by creating more budget-friendly products that are accessible to, and will be patronized by, the low-income groups. Advertisers will definitely be following suit.

But in order to produce inexpensive Filipino comics for the low-income market, this will entail, in light of inflation, reduced production costs, efficient distribution, and most importantly, effective collection.

Will this mean the return as well of the corrupt banketa dealers of yesteryear who secretly lease komiks to the public, then return the dilapitated and read komiks back to the publisher as unsold material, while secretly keeping the unreported extra profits for themselves? A good question best reserved for another topic for another day.


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