Much has been said about the Philippines and its internet usage.
With around 60 million of its citizens—58% of the population—having
access to the internet, the country’s penetration rate scores above
the global average. When it comes to the actual amount of time spent
online, Filipinos record the highest in the world at 8 hours and 59
minutes per day on average.
The Digital in 2017 Global
Overview report reveals fascinating data about the behavior of
netizens. Just what do we Filipinos do with all of that time,
exactly? Aside from social media (47% of online activity), online
shopping comes in 2nd with a 29% share. The popular national pastime
has found home within the digital landscape.
the Philippines has been showing promise: total revenue of
businesses selling online in 2017 is projected to reach an estimated
$1.2B (P59.7B)—a 22% increase from 2016. And many experts are
optimistic: roughly 30.3 million people (29% of the population) have
made a purchase via e-commerce in the past year. With an active
online community (we’re currently Facebook’s most engaged market
with 57 million users), the odds are stacked in e-commerce’s
Given this, there’s ripe opportunity for businesses to
take advantage of e-commerce, especially in such a promising market.
Below are a few of its many benefits—along with case studies—to get
Benefit # 1: Gain new customers as you go beyond location
One of the game-changing features of e-commerce is
the lack of geographical barriers. Traditionally, brick-and-mortar
stores could only reach customers who were within the vicinity; in
turn, customers could only shop by making a trip to their favorite
With an e-commerce website, all you need is an internet
connection: due to drop-shipping, digital payments, and online
security, it’s now easier than ever for companies to set up a
digital storefront that complements their physical one. With the
benefit of reaching customers who were held back by physical
distance before, e-commerce is an efficient way to widen your market
Take The SM Store for example. In 2014, the mall
conglomerate digitized their department store brand with a
complementary e-commerce website. The tactic was part of the
company’s strategy to deepen their penetration in an emerging,
lucrative demographic: digital-savvy, millennial shoppers.
“We hope that with this new e-commerce site, we will be able to
reach out to more of our customers by bringing more attractive
brands online and provide them a more exciting and diverse shopping
experience with SM,” Jorge Mendiola, President at SM Retail Inc.,
said during its launch.
Now on its 3rd year, The SM Store’s
site has complementary offline services for all its shoppers.
Door-to-door deliveries are available for most of the Philippines,
and customers have the option of picking their online purchases up
at many SM stores near them. Coverage includes Manila, Luzon,
Bacolod, Cagayan de Oro, Cebu, General Santos, and Mandurriao, to
name a few.
With the ultimate aim of providing accessibility
and convenience through innovation, SM’s execution is a great
example of how an established retail brand can still widen its
market reach through e-commerce—and do it well.
Benefit # 2: Lower costs as you increase the efficiency of
another revenue stream
Another great aspect of
e-commerce is its potential in decreasing your expenses. There are
many items that affect physical storefronts: storage costs, utility
fees, and even salaries for salespersons to man them.
comes to e-commerce, a lot of these costs are slashed. Instead of
holding inventory in multiple retail locations, businesses can
simply store them all in one warehouse and only pay for utilities
there. For salaries, sales personnel are taken out of the equation:
as an end-to-end shopping experience, e-commerce websites let
customers conduct their own research, find for their preferred sizes
and colors, and even facilitate their own checkouts.
businesses, shifting the shopping experience to an automated system
doesn’t just lessen costs. It also reduces margins for error, allows
for easier scaling, and streamlines processes—all of which
contribute to the bottom line.
One company that’s benefited
from such efficiency is Max’s Group Inc (MGI). As the country’s
leading casual dining chain operator, they operate many well-loved
brands: Max’s, Jamba Juice, Teriyaki Boy, etc. To maximize the
potential of their portfolio (currently 500 stores across 13
brands), they’ve also launched their own website dedicated to
Serving customers all over the Philippines, the
site includes Yellow Cab, Pancake House, Krispy Kreme, and more.
Users simply have to create an account, place an order, and
facilitate their own delivery. And this execution has paid off: in a
disclosure made to the Philippine Stock Exchange last March 2017,
MGI’s online and delivery revenues stood 24% higher than the
previous year’s at P1.08B.
As they attributed this jump to a
centralized ordering and dispatch platform, it’s clear that the
efficiency of e-commerce has reaped great rewards for the food
Benefit # 3: Beat the competition by being accessible whenever
consumers feel like buying
Another great thing about
e-commerce? Round-the-clock operation. You never have to close your
e-commerce store simply because you don’t have to. As long as its
infrastructure is solid, it can run on its own. With the exception
of deliveries having a fixed window, e-commerce websites operate on
any time frame.
In fact, the co-founder and CEO of Lazada
Philippines can attest to this. At the Mobile Moves Business event
last January 2017, Inanc Balci shared, “We get the most number of
orders within work hours.”. Describing how orders spiked in the
morning and afternoon, he emphasized that this insight is uniquely
applicable to e-commerce users in the Philippines.
million products sold in Lazada today, and as one of the few tech
companies in the country with annual revenues of P1B, being an
e-commerce business that’s available when consumers want it to be
certainly benefits the shopping behemoth.
The Promise of Digital
E-commerce is definitely
exciting and here to stay. It not only serves as another platform to
expand your business, but it’s also a totally new playing field for
the best and the brightest.
Are you ready to take your
business further, maximize opportunities, and expand towards this