MANILA, MARCH 1, 2013 – (PART 1 of 2) The Philippines’ digital commerce future looks bright. Once thought of as a difficult area for the industry to penetrate, the Philippines is now ripe ground. “Most of the barriers that have stopped Filipinos from buying online have now eroded,” Dave Condon, CEO of Axon IT Consulting, said.
A study done in conjunction with Effective Measure showed that out of a sample size of 300 plus respondents, around 95 percent said that their online shopping experience has been between somewhat and very satisfactory. While 85 percent of the respondents believe that online buying security is between safe and very safe.
As for the other barriers, such as access to the internet and ability to pay, they have already been addressed. Some 92,000 Filipinos have been reported to own a smartphone and the Philippines has also ranked the 15th most number of smartphone users around the world. “Given the wealth profile of the country, we shouldn’t be that high up the ranking,” Condon said. “But apparently, Filipinos are willing to spend a disproportionate amount of money to buy cellphones.”
Couple this whopping number with the ubiquity of internet shops and dirt-cheap wifi-enabled phones, internet access is pretty much within every Filipinos’ reach.
The other barrier that has been banished is the low number of Filipinos who own a credit card. Online shops have addressed this problem by allowing customers to pay for the items in person through bank transfers and the use of remittance centers like LBC and Cebuana Lhuillier, etc.
Hunting for good deals on the internet
One interesting thing to note is that Filipinos flock to the internet to research first about a product and then go to the store to buy the item from the online shopping behaviour in other countries such as Japan, where people are known to do their research offline then make the purchase online.
An eShopper survey released by Nielsen during the fourth quarter of last year showed that around 61 percent of Filipino online shoppers were actively in search of deals in August 2012 alone. This was deemed to be significantly higher than the average in the Asia-Pacific region which averaged at 39 percent.
Nielsen also found that 72 percent of online consumers in the Philippines said they used the Internet for grocery shopping research in the past month. Almost half or 47% of these consumers did so on a daily basis. This was higher than the 39% average in the Asia Pacific region.
The Filipinos’ instinct to conduct a product search online is driven primarily by the desire to get the best deal for their money.
However, the study recorded that only 34 percent of internet users made actual purchases online for the month of August 2012. This was still significantly lower than the 62 percent that Nielsen recorded in the Asia-Pacific region and the 49 percent recorded globally.
The industry, which most experts agree is still in its infancy, is expected to grow steadily. A 40 percent growth in the digital commerce industry is hard to sustain, Condon said. But at least, the main barriers have already come down.
