4. Title: e-Distribution pays off for Philippine Delicacies Firm                 

        Company: Pinoydelikasi.com

        Sector: Specialty Foods           

        Location: Manila, Philippines

        Employees: 8

        Yearly turnover: $400,000  

        Export sales : 75 % export; 25% local

        Current export markets: US, Europe, Japan

        http://www.pinoydelikasi.com/main.php

        Lessons Learned: Coordination is important between what the web site (front end) offers and what the supply side (back end) delivers. A website cannot be successful if its processing, packing, quality control and delivery system is deficient. Marketing and production functions should be integrated and complement each other.

        Pinoydelikasi.com is the first Filipino online delicacies store. As a specialty food company in the Philippines, it set out in 1999 to provide exotic foods and specialty items for Filipinos living outside main cities and in ex-pat communities around the world.

        But it needed to learn how to develop an efficient online payment mechanism and organize incoming distribution from suppliers and outgoing distribution to customers.

        Eventually, it chose an integrated online payment system through Pay Pal. The company then had to find reliable sourcing and distribution networks.

        Some of the challenges of running such a business, and the technologic solutions used to overcome them, are illustrated by the example of Pinoydelikasi's fresh fish suppliers. Fishermen supplying fish to the company are mostly located on Bantayan Island, off the main island of Cebu, where communication is limited to the village's single telephone operator. To improve communication, Pinoy was able to offer the fishermen subsidized cellular telephones to expedite order placements. With the increased sales, fishermen could afford to invest in the technology so a virtuous circle was created.

        By improving processing and delivery time, lowering its costs, and serving its customers better, the company went on to enjoy considerable success. From an initial capitalization of PhP 10,000 (less than $200) in 1999, Pinoydelikasi had grown to a Php20 million (around $400,000) with an average monthly profit of $2000 and a growth rate of 15 to 20% in three years. Moreover, it has provided fishermen on Bantayan Island a regular income that is at least three times what they used to earn.