How technology helps spur rise of emerging middle class
Facebook, in partnership with Bain and Co., a leading global management consulting firm, released the results of a new study, which explored the digital journey of the emerging middle class (EMC) in the Philippines, uncovering the changing ways people are embracing technology.
Facebook and Bain worked with ethnography specialist Quantum, to conduct the study including 80 ethnographic in-home interviews, 160 peer hangouts, 2,000 hours of research, and 12,000 digital consumers surveyed throughout Southeast Asia.
“The study revealed that there is a ‘rising wave’ of digital savvy Filipinos, forming the emerging middle class (EMC). With improved access to mobile and digital devices, unlike generations before them, the EMC are exposed to a plethora of choices for pursuing their passions, interests and aspirations. Going digital is not solely a means to connect with friends, but a way for the EMC to be active participants in online commerce, and conversations,” said John Rubio, country director, Facebook Philippines.
From extensive interviews the study also uncovered that while business leaders understood the importance of the EMC, they are not yet ready to engage them. About 77 percent of business leaders agreed that the EMC will be the growth driver for their businesses, but in the Philippines, only 15 percent of business leaders feel they have a comprehensive plan to engage the EMC and meet their needs.
“A common assumption is that the EMC are not techsavvy, and are not consistently accessing digital platforms. With this study, we learned the contrary - the EMC is using smartphones, and are rapidly adopting e-payment channels. Empowered by technology, we see potential for this new consumer wave to gain greater influence in an expanding ecommerce segment in Southeast Asia,” said Aadarsh Baijal, leader of Bain’s Digital Practice in Asia-Pacific.
The study identified several key findings, including how digital technology is giving the EMC in the Philippines opportunities that the previous generation did not have, the power of choice. • Power to choose identities Through what they learn online, the Filipino EMC understands that they no longer need to fit the mold and adhere to old norms. They can choose to go for jobs or entrepreneurial pursuits widely based on how they wish to take control of their time without turning their backs on their Filipino roots.
• Power to choose communities The online space has allowed the EMC to connect more easily and effectively with other people who share the same passions, interests, aspirations and challenges. • Power to choose dreams and aspirations Technology has opened up a world of possibilities, opportunities and ambitions. and has fueled the dreams of the Filipino EMC. They are empowered as they can learn more about their passion and interests, upgrade their skills and create ways to monetize their hobbies and find new income streams. Something they can do on top of their full time jobs.
• Power to choose joy and
experiences The Pinoy EMC developed a more sophisticated way of thinking as consumers. They spend on things that give them pleasure like travel, experiences, beauty products and regimens, and branded goods. They don’t just buy because it’s the trend, they do their research, too.
Understanding the emerging middle class
By 2022, the middle class in the Philippines is projected to grow to 60 million people. That accounts for about 17 percent of the middle class population in Southeast Asia of 350 million. Given the steady growth of internet penetration and mobile internet access in the Philippines, emerging middle class Filipinos are using technology to explore opportunities for personal growth, connecting with online communities and generating new revenue streams.
Randy, a 33-year old father from Bulacan is a licensed teacher, who gave up teaching to be a driver for a car sharing company. He decided to do so because the job pays better and gives him more time with his family. Being able to have the power to choose has greatly enabled him and he is not afraid to share with people online the results of his choice.
“I post my pictures (online), like where I started, so all my Facebook friends know what I have now and what I owned before. It’s a good feeling to be able to show people that Randy succeeded – once a dreamer and now, I have a good life, a good family and more importantly, successful,” shares Randy.
Meanwhile, for a new mother like Frenalyn from Davao, the online space brought her to other mothers, uniting them over their shared challenges while raising a child. For Frenalyn, being a part of digital communities is like having a trusted friend who is always available to offer help and advice on any topic around parenting. She says that having support from an online community of mothers helps to greatly reduce the stress that parenting can sometimes bring.
Another example is Jay Paul, a 25-year old, call center agent who likes to skate, and idolizes Riley Hawk, a wellknown American professional skater. Seeing Riley Hawk’s usual get-up of skinny jeans and black sneakers, he went through great lengths to order Hawk’s exact sneakers from a Dubai-based store online. Her aunt bought the shoes and sent it to Davao from Dubai. “I was so proud, and happy. I felt like I was the first to own the shoes here in Davao or maybe even in the whole of the Philippines,” he said.
“We see the Philippines embracing social and digital innovation at a rapid pace. At Facebook we are committed to helping Filipinos build for a more progressive and inclusive future, by providing a platform where they can build community, find resources to grow as individuals and allow them to create positive impact for their families and ultimately the country,” said Rubio.
The “Rising Wave” study was conducted in April to June 2018 with respondents across Southeast Asia. Respondents from the Philippines came from 15 cities including Angeles, Butuan, Iligan, Olongapo, Digos, and Zamboanga.