Gen Z formula reshaping small businesses in Philippines

Special report

MANILA, Philippines — If you want to understand how Gen Zs are reshaping small businesses in the Philippines, don’t start with an economist, but with a 20-year-old who edits a 15-second promotional video to earn a percentage of the basket without owning a physical store.

Let us talk about the new generation, or what they call Gen Z. Born in the era of smartphones, high-speed internet and algorithm-driven platforms, they have become an unexpected economic catalyst for micro, small and medium enterprises (MSMEs).

It is not just a simple income stream; it is a pattern. A woven culture of digital fabric where trends, short-form videos, livestream, e-commerce and influencer-style marketing activities create a new product – new business opportunities.

The rise of Tiktok Shop, Facebook Marketplace, Shopee and Instagram as MSME hubs enabled these opportunities to appear as visible as ever, reshaping the ecosystem of small businesses.

Now heavily driven by Gen Zs, content creators operate as sellers, marketers and influencers in one, or what they call ‘nano-influencers.’

The numbers speak for themselves: TikTok’s ad reach in the Philippines reached 62.3 million in early 2025, while TikTok Phl’s gross merchandise value soared to $1.99 billion in the first half of 2025. For MSMEs, these platforms are not only marketplaces but also the main component of today’s e-commerce.

But digital fluency aside, digital instincts modernize MSMEs marketing strategies, expand audience reach and reshape the entrepreneurial landscape, creating content that can go viral, attention-grabbing hooks, aesthetics and humor style engagement.

MSMEs make up 99 percent of business in the Philippines and contribute more than 60 percent in employment, which means that Gen Zs’ digital influence has a ripple effect on a large slice of the economy.

Formula 1: Capture attention

Traditional advertising costs millions to capture attention, but Gen Zs can capture it in just 15 to 30 seconds at no cost.

Their short-form videos can generate thousands of views, often outperforming big brand advertisements along highways. This becomes a free advertising engine for MSMEs through unboxing, quick reviews, product reactions, before-and-after shots and POV-style storytelling.

Wouldn’t you be curious when a Tiktok post says, “For only P183, this multifunctional clothes and shoe rack organizer is definitely worth it for its price?” The funny thing is, this often builds more credibility than a thousand-peso ad.

The truth is, Filipinos trust people more than brands, which underlines endorsements’ credibility greater than traditional ads.

So, if you wonder why MSMEs no longer rely solely on posters or paid promotions, now you know why.

Trend awareness drives visibility, and knowing how the wave of new trends affects sales means understanding even the simplest elements of a video content including sounds, camera angles and product setup.

Formula 2: Convert sales

Trends come in waves. It could be through trending audios, meme formats, relatable POVs, Get Ready with Me, ‘budol’ content or product reactions, using e-commerce tools like link-in-bio stores, shop affiliates link and reseller networks.

For many MSMEs, this means modernizing strategies, allowing them to gain publicity without paying upfront marketing fees.

Hazel Cruz, 22-year-old shop affiliate, shared that while product availability affects what she promotes, it is often the brands themselves that reach out to creators like her.

She says that partnering with small businesses is more personal and collaborative, adding that they are more open to ideas and are flexible. She added, “I feel more that I am part of their growth.”

Affiliates use trackable links that direct customers to the product, where they can get a share once the item has been sold. And the impact on consumers is clear.

For online shoppers like Tresha Montero, seeing affiliate content videos influences her purchases, especially when combined with reviews, noting “If many people are buying it, it might be effective.”

Through this process, Gen Zs not only reduce MSMEs’ marketing costs but also shorten the path to purchase, transforming video contents into income streams.

Formula 3: Sustain growth

Now, shift the lens to MSMEs.

For Nhiam Doña Renacia, owner of Bandanna Manila Clothing, affiliates and resellers are not just partners – they are an extension of his marketing team, minus the payroll.

“Affiliates and resellers are a big help because it’s like my marketing team grew without me having to pay them. They just buy my product and then create videos and content,” he said.

He notes that there’s a significant effect on sales, especially when Gen Z creators promote and strategize the products in Tiktok and Shopee, the way they demonstrate the product and the quality of videos they produce.

In a competitive apparel industry, riding the trend is crucial to make the product interesting. But still, innovation and consistency are key factors to staying visible despite intense market competition.

Beyond marketing, digital modes of payments allow MSMEs to cater to more customers and modernize the sale process through e-wallets, loans, credit cards and bank transfers.

Formula 4: ‘Budol’ culture

Filipinos have always been impulsive buyers, and Gen Zs, through their content, just proves it. For many shoppers who rely on peer content and reviews, the formula is simple: see, click and check out.

“Budol” works because it blends entertainment and shopping in one motion while MSMEs benefit the most. Why would you need a storefront when you can create a 10-second video and a tap?

That is also why platform algorithms are scary. While it can boost product visibility, it can also fluctuate and impact sales overnight. But virality is unpredictable, and so are sales.

The new generation MSMEs

Gen Z shop affiliates do more than just create demand, ride trends and increase sales, they also drive innovation. They introduce MSMEs into the new marketing formula that amplify products and build connections.

But now that AI has been rapidly evolving as evident with new abilities like creation of realistic images, videos and even manipulated content, it raises the question: will AI change the formula for content creation?

In a world where algorithms and digital trends constantly fluctuate, there’s only one thing certain for the Gen Zs and MSMEs – change is the only constant.