Text | Zheng Cancheng
Edit | elegant
If you can advance your salary, will the happiness of the workers be higher? This may become possible in the Philippines.
The first people to experience the service are the freelancers in the Philippines, who are unable to access banking financial services due to their relatively variable sources of income. According to the data of Beijing Zhiyan Consulting, the "2021-2027 China Digital Economy Industry Market Depth Analysis and Investment Direction Research Report" shows that 80% of Filipino adults are still unbanked, credit card holders are even fewer, and up to 90% of Filipinos still do not have credit cards.
Based on this, "FRESH APP" is a software developed for freelancers in the Philippines, which provides freelancers in the Philippines with financial services including BNPL (buy-before-pay), EWA (payroll advance) and (Installment) installments by connecting front-end emerging banks and back-end flexible employment platforms.
In the "FRESH APP" backend, the flexible employment platform refers to a platform where freelancers can take orders according to their own situation, and enterprises can publish employment information according to their own needs. After the flexible employment platform receives the order, the freelancer can complete the corresponding work content and receive the corresponding remuneration after the employer reviews it. In general, gig platforms can roughly provide four types of work: travel service platforms (such as Uber), specialized service platforms (Upwork), housekeeping service platforms (such as Etsy), and asset sharing service platforms (such as Airbnb).
According to the data of the information platform obvis, Upwork, Toptal, Fiverr, Catalant, 99Designs, Freelancer.com, Guru.com, Skyword, TaskRabbit, etc. are well-known flexible employment platforms. Among them, the three companies that have been listed on the secondary market are Upwork in the United States, Fiverr in Israel and Freelancer in Australia, accumulating more than 17 million, 7 million and 31 million users respectively, with market capitalizations of about 1.5 billion, 10 billion and 400 million US dollars.
In addition, the gig economy group is still growing. According to Mastercard (the organization that issues Mastercard credit and debit cards), the total gig economy is expected to reach $455 billion by the end of 2023. This is also reflected in Deloitte's survey data, such as millennials in developed countries, for example, 64% of full-time employees want to develop side jobs, and 54% show an attitude towards greater independence. This means that gigs seem to be the only choice for these people, a trend that Mastercard predicts will have more than 900 million freelancers worldwide by 2023.
Another allure of the gig economy is rising wages. According to the "2020 Freelancer Income Report" issued by Payoneer, a one-stop cross-border payment platform in the United States, the average hourly wage of freelancers rose from $19 in 2018 to $21 in 2020, which is much higher than the average hourly wage in most countries, indirectly illustrating the shortage of supply in the gig labor market.
In addition, the COVID-19 pandemic is also affecting the gig economy. According to the Huajing Industry Research Institute, the proportion of unemployed people in the Philippines surged to 3.36% in 2020, and a look at historical data shows that this proportion has been in a downward trend in the first five years, with only 2.24% in 2019. Gig work is one of the places where the unemployed go, which also means that the increase in unemployment will bring about structural changes in the employment population.
At the forefront of the "FRESH APP", the development of financial technology is also helping these people enjoy financial services, and digital banks are one of the representatives of financial technology. Lu Shibei, founder of "FRESH APP", told 36Kr that emerging banks can be divided into two types: "digital bank" and "Neobank", the difference between the two is whether there is a digital bank license, the digital bank is the party holding the digital bank license, and Neobank obtains the lending qualification through grafting with the digital bank.
At present, "FRESH APP" already has the qualification to borrow from outside, and hopes to graft with digital bank in the future to become Neobank, which can also import its customers into the bank, and the bank is responsible for the credit process, thereby reducing the loan overdue risk of "FRESH APP".
Emerging banks are also promoting the reform of traditional payment methods, in the process of global digitalization and information development, the global banking industry has experienced automation, electronic and digital promotion, and is currently in the 4.0 stage, according to the "2021 Global Digital Banking Report" data issued by FinTech And Micro Insights, it is expected that by 2024, the penetration rate of digital payment in the Philippines can exceed 30%, and the trend of digitalization of traditional banks is getting deeper and deeper.
In November 2021, the "FRESH APP" was officially launched two months after its establishment. Lu Shibei told 36Kr that as of the end of January 2022, its registered users had exceeded 10,000, and the re-borrowing rate reached 90%. (Note: The re-borrowing ratio refers to the proportion of people who continue to apply for a loan after paying off the loan)
In addition, the younger demographic structure and the high proportion of freelancers are the reasons why "FRESH APP" chose the Philippines as an entry point. Lu Shibei told 36Kr that about 10% (11 million) of the 110 million people in the Philippines are freelancers, and this freelancer group is more concentrated and young in the Philippines, so they are more willing to do freelance jobs. For example, thanks to the advantage of native English, 70% of the world's customer service agents are from the Philippines, and such geographical characteristics create favorable conditions for users to fission.
In the future, "FRESH APP" hopes to be able to work directly with gig platforms to share user data and improve the platform's ability to find potential users; in terms of market expansion, "FRESH APP" hopes to choose the second stop of its business model in India, in part because India, which has the world's second largest population, is also the largest gig provider, according to the report of KellyOCG (a brand of human resources consulting company Kelly), 56% of Indian companies have hired more than 20% Meanwhile, India has a higher degree of Internet-based education, with OII (Oxford Internet Institute) data showing that India provides 30% of the world's Internet gig workers.
In terms of team, founder and CEO Lu Shibei served as the CBO of mobile phone loans, co-founder of Second White Strip and COO of his salary friend, serving millions of industry users; CRO (Chief Risk Officer) David MA received a master's degree from the Chinese Academy of Sciences, a doctorate in statistics from Yale University, and was a senior vice president of Citibank Credit Card and vice president of Bank of America; COO (Chief Operating Officer) Yi Meng was the head of the approval department of China Tengxin under CITIC Industrial Fund, and the head of the risk policy department of Bai Qian. Co-founder of SCOREONE; CSO (Chief Strategy Officer) Jeong Wai-mu graduated from the University of Leeds in the UK and was formerly JadeValue's Senior Director of Strategic Investments.