The digital-commerce industry in the Philippines is expected to balloon to more than $10 billion in less than a decade despite roadblocks, such as the relatively slow Internet speeds, the lack of trust in online purchasing and minimal engaging content from brands.
Zoe Lawrence, who sits as the digital director for market-research company Kantar Taylor Nelson Sofres (TNS), said the Philippine digital market will even surpass its peers in Asia and the Pacific, all of which are expected to have an e-commerce market value of $5 billion each.
“One of our colleagues from Kantar Retail shared that by 2025 e-commerce will be a $5-billion business in every market in Asia Pacific, but the estimates show that the number will more likely be $10 billion in the Philippines by 2025,” she said in a media briefing on Friday.
Documents from Kantar Retail showed that in 2015, the e-commerce industry in the Philippines booked $1.32 billion in revenues. This is expected to double to $3 billion in the next four years.
There are certain barriers to achieving such a surge, however, and these must be addressed
to fully harness the huge potential the industry currently holds.
“What is clear is that there are certain consistent barriers to e-commerce adoption, and the first is access, and not just access to the Internet, but access to the whole ecosystem around e-commerce that should be working effectively,” Lawrence explained.
She listed the requirements as efficient logistics networks, reliable payments systems and user-friendly applications.
“You need to have logistics network, and the payments network in place and, of course, you need to have the sites and the ability to access the sites that are delivering or offering you product in a clear and compelling way,” the official said.
And once access to all these is there, there remains barriers around trust.
“People don’t necessarily feel secure when they get started on shopping online—that what they’re buying will arrive, be of good quality, or be genuine,” she said.
During the same briefing, Lawrence also emphasized the need for businesses to rethink how they connect with consumers online, as Filipinos become averse to intrusive brand advertising.
Citing the findings from Kantar TNS’s Connected Life 2016 study, she said brands should embrace disruptive approaches to leverage the full impact of digital and mobile technologies, creating marketing strategies that engage consumers and power businesses toward success.
“Today it’s all about engaging consumers in new ways. Brands must understand their market and develop content that is of value to them,” she said. And, with the rise of social-media platforms, brands should be mindful of evolving consumer attitudes, as they look to take advantage of the diversifying social-media landscape, Kantar Media and Digital Effectiveness CEO Gonzalo Fuentes said separately.
The Connected Life results further revealed that a quarter—about 23 percent—of connected consumers in the Philippines “actively ignore” social posts or content from brands. Businesses need to avoid being invasive as a third already feel “constantly followed” by online advertising.
“With so many tools available for their use, brands must be strategic in developing campaigns that cater to the needs and wants of their consumers. Their marketing campaigns don’t necessarily need to be viral all the time. What they always need to be is memorable,” he said.
The Philippines is touted as the social-media capital of the world. It was also the texting capital of the world, back when basic mobile phones were first introduced.
Today smartphone penetration in the country is around 40 percent, and data from research agency Ericsson showed that more than 30 percent of Filipinos use their smartphones for social networking, 40 percent for instant messaging, and around 30 percent for online videos on a daily basis.
Smartphone penetration is expected to increase to 50 percent by year-end.