PH ‘hot’ mart for online commerce

MANILA, Philippines–The Philippines is quickly becoming one of the four “hottest e-commerce markets” in the Association of Southeast Asian Nations, as the local economy presents a lucrative market for online sales, according to the Hong Kong-headquartered Dezan Shira and Associates.

In the May edition of the Asia Briefing Magazine entitled, E-Commerce across Asia: Trends and Developments 2014, Matthew Zito of Dezan Shira and Associates pointed out that the regulatory environments, cultural and linguistic make-ups, and states of infrastructure development in Singapore, Malaysia, Indonesia and the Philippines were seen leading to “important differences.”

As it is, online shopping in these four countries is already experiencing a meteoric rise.

According to Zito, the Philippines stood out in Asean because of its large number Internet users, thus making it the largest English-language online market in Southeast Asia.

Zito said that this meant that foreign online retailers had less work to do in adapting their websites to the local market.

He cited the case of Amazon, which ranked as one of the top 20 most visited sites among Filipinos despite having no local presence.

Filipinos are also among the “biggest users of social media worldwide and the penetration of Facebook in particular is second to none,” he added.

Based on data from the International Telecommunications Union as presented by Asia Briefing, Internet penetration in the Philippines remained small at only 36 percent, but the country’s online population stood at a huge 35 million.

In contrast, Singapore had a better Internet penetration at 74 percent but the online population was only 3.9 million.

In Malaysia, penetration was 65.8 percent while the population stood at 19 million.

Zito also noted that the characteristics of the Filipino economy presented an especially lucrative market for online sales.

“In contrast with the export-driven economies of much of Asia, over 70 percent of the Philippines’ GDP comes from consumption. The Philippines performs considerably well in terms of logistics, where foreign companies such as FedEx and DHL have brought down prices and streamlined the delivery of consumer goods,” Zito explained.

“Considerations such as these should play a central role in foreign investors’ strategic planning for entry into the country’s e-commerce market,” he added.

Zito cited some of the more notable online retailers in the country which included Sulit.com.ph, rebranded as OLX.ph (a classifieds site where payment is arranged directly between the buyer and seller); AyosDito (a competing classifieds site); Lazada (consumer electronics, home and living, clothing and accessories); Cebu Pacific (low-cost airline tickets); and Hallo Hallo Mall (a classifieds-style site with its own online payment system).

“As evidenced by this list, payment systems remain a problem in the Philippines. This is gradually improving, however, with the spread of ATM machines, direct debit, prepaid cards, and even cash-on-delivery options,” he said.