Business models that work in the Philippines

Learning goal

Not every business model that works abroad will work here.

The Philippine market has its own behavior, infrastructure, and limitations.
Low trust in online payments, strong word-of-mouth marketing, and regional differences all shape what kinds of models succeed.

Founders who understand this early are more likely to find traction and grow sustainably.

Why it matters

1. Understand the context before choosing a model
   Before copying what works in Silicon Valley or Singapore, ask:

• do my customers have access to tech or credit cards?

• will they trust a new brand to handle money or data?

• can I make money without burning too much on education?
  In the Philippines, simple, low-friction models tend to win early.

2. Popular models that work well in the PH

a. Transaction-based
You sell something, they pay.
Works for: e-commerce, food brands, freelancers, events
Why it works: it’s simple, familiar, and builds trust fast

b. Dubscription (only when value is clear)
Recurring payments for consistent value
Works for: education platforms, tools, media
Tip: support GCash or COD, and clearly justify the cost

c. Commission or marketplace
You connect buyers and sellers, and take a cut
Works for: travel, delivery, logistics, real estate
Needs: trust, quality control, clear policies

d. Service-based
You charge for your time, expertise, or packages
Works for: design, dev, marketing, consulting
Bonus: use this to fund your product or build early traction

e. Freemium-to-paid
Free basic access, paid upgrades
Works for: apps, content tools, SaaS
Tip: make the upgrade path obvious and valuable

3. Models that struggle without adaptation
   These can work, but only with the right local strategy:

• ad-based – needs scale and trust

• peer-to-peer – trust is a barrier without strong systems

• buy now, pay later – growing, but still needs education and controls

4. Test the model before committing
   Before you build around a model, ask:

• can I test this on a small scale?

• how do users react to the way I charge?

• can I break even, or profit, on one customer?
  Remember: validation is not just about the product. It’s about whether the model works.

Quick checklist

• model is easy to explain to a Filipino customer

• backed by local success stories

• accounts for trust, access, and payment behavior

• tested with real users

• open to pivot based on what works in-market

What to do next / StellarPH tip

Sketch your business model and ask 3 users:
“Does this make sense to you?” and “Would you pay this way?”
Your users are your best test.