Spent the day in Cebu City, which is on Cebu Island, about 500 km south of Manila.
Cebu is nice. It's much smaller than Manila, just a million people or so, and it lacks the high-rises and the squalor. There's less traffic, it's cleaner, people seem more relaxed. I didn't get to play tourist for more than half an hour, and that was in the local shopping mall at lunchtime, but I liked it.
Also, I had two particularly good interviews. One was with a private medical clinic located in that same shopping mall. Like, between the sporting goods store and the NafNaf outlet, right across from the fresh-juice-frogurt place? Walk-in diagnostics, complete with X-rays, sonograms and a well-stocked lab. Three doctors, bunch of nurses.
But the clinic was just a pied-a-terre and a proof of concept. These guys were innovative medical entrepreneurs: their real goal was to make a buttload of money outsourcing the management of other private medical clinics. Businesses run by doctors are not always run well, right? So the mall-clinic guys would provide better management, better IT, and a bunch of tricks like rationalizing procurement, and they'd run your clinic for you so much better that you'd both profit.
Honestly, it was one of those interviews that makes me just smile thinking about it. You know? Like, maybe we can do some good here, but at the end of the day the Philippines might be just fine without us. That's sort of paradoxical, but there it is.
The other one was with a local drug manufacturer. I think I mentioned a couple of posts back that two manufacturers had about 60% of the market, yah? Well, after that it sort of falls off on a Zipf curve; there are a dozen or so middleweight drugmakers, then a couple of hundred dinky ones. This guy was one of the middleweights. Chinese-Filipino, family owned firm, just starting on its third generation; I saw their org chart, and it was basically the same name repeated a dozen times. 200-some employees, a couple of dozen products.
These guys were very different from the clever clinic managers, but they were inspiring in their own way. They were using fifty-year-old technology to do traditional molecule-bashing on container loads of imported raw materials, and then trying all sorts of good business techniques to make as much money as possible off them. As we've seen, the Philippines is a tough market; they have to compete with two much bigger manufacturers, and then they couldn't distribute through the two biggest distributors either. So they've had to use smaller distributors who aren't as good. And they've made a virtue of necessity in a bunch of ways... for instance, bullying the smaller distributors to pay cash and take lower discounts.
Meanwhile they're quietly developing their own brands, making generic antibiotics to pay the bills while chipping away at the multinationals' markets around the edges. Apparently it's a decades-long game of inches to get a branded generic accepted widely -- you have to go from doctor to doctor across the country, persuading them that your pill is cheaper and just as good (and that prescribing it won't necessarily cost them that multinational-sponsored conference trip to Egypt). It's slow and patient work. But they've had enough success that they'll need to built a new facility soon, and they'll need to decide whether to stay in Cebu or move to Manila: much more expensive, but closer to the markets, easier to get raw materials, and much easier to find competent staff.
Just fascinating stuff. And also, he confirmed a bunch of conclusions I'd tentatively reached about market segmentation here. (There is market segmentation here. Hoo, yes.) Also, the coffee was excellent.
Maybe -- this just occurred to me -- maybe when you're doing development work, you spent too much time around institutions that are severely screwed up and people that need help. So when you run into people and businesses that are doing well, thriving even, and just getting on with things, no assistance needed... well, it feels good.
Also: the Philippines outside Manila seems to be much nicer than Manila.
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