By Miguel Hanz L. Antivola, Reporter
THE e-commerce industry in the Philippines needs to build a strong community of skilled entrepreneurs, alongside tech talent and regulators, to support its growth, according to an industry player.
“The majority of e-commerce people right now are focusing on profitability, not on the spirit of entrepreneurship,” Nani Razon, co-founder of the Ecommerce Thrive Asia-Philippines Movement and chief executive officer of Gencys Digital Trading, Inc., said in an interview with BusinessWorld.
“[We’re] still a baby,” he added on the current state of Philippine e-commerce. “The community is still small in terms of numbers. When it comes to technology, we are still behind.”
“In e-commerce, you just have to learn what buttons you’re pushing and you can sell. But we want to put the essence of entrepreneurship because there are a lot of people who just want money making.”
According to the e-Conomy SEA report by Google, Temasek Holdings, and Bain & Co., the Philippine e-commerce market reached a gross merchandise value (GMV) of $16 billion last year, matching that of Vietnam.
Indonesia saw the highest GMV with $62 billion, followed by Thailand ($22 billion), it added.
It projected a $24-billion GMV for the Philippine e-commerce next year, rocketing to about $60 billion by 2030.
Raffy G. Canare, Ecom Thrive co-founder, noted the rapid development of trends in the e-commerce space, which necessitates training and open knowledge sharing for market players for sustainability while recognizing its huge potential for both business and economic growth.
“If they are still not online and maximizing online platforms, their business will really die,” he said on traditional businesses who refuse digital adoption.
“The industry can really help the economy in terms of GDP,” Mr. Razon said, eyeing a 30% e-commerce contribution upon full cooperation of stakeholders.
HOW THE MOVEMENT STARTED
When he was invited by his mentor and co-founder Charlie Gengos to shift to retail e-commerce from network marketing in 2018, Mr. Razon witnessed firsthand the problems faced by the industry.
“The scarcity mentality that time was higher,” he said on the overwhelming amount of entrants, who simply brag about their achievements during knowledge-sharing events. “They are not genuine in their sharing.”
“The majority of e-commerce companies earn, but their income doesn’t last that long, and they jump to different industries,” he added.
“So why not establish a training platform and initiatives that not only focus on sales and marketing but also on building an enterprise?”
With this advocacy, Mr. Razon started Gencys Digital Trading, Inc., which is built on doing its own product and market research, creating automated systems for improved processes, and management training.
“We created a small internal community where we provide training for business longevity… What if we opened it to the public?” he said on inviting all e-commerce players to local and international events and trade missions through the Ecom Thrive movement.
“Profitability, sustainability, and leverage,” he added on the three core values imbibed by the movement, which need to be upheld through the community.
Currently, the meetings and events of Ecom Thrive are freely attended by up to 1,000 people, with participation from startups, corporations, and even banks, Mr. Razon noted.
However, building an industry-wide community begs an acknowledgment of the gaps that prevent it from realizing its full growth potential.
Mr. Razon noted that the country needs to hone its technology talent, regulations, and overall mindset to elevate its place in the region.
“The majority of the tools that we use here in automation, around 80%, is Vietnamese software,” he said.
“Based on our observation and case study, e-commerce in the Philippines is behind by five to six years in terms of technology, community, and mindset from that of Vietnam,” he added on Vietnam being the Philippines’ closest competitor.
“There are a lot of good Filipino programmers, but they are still programming on the software of international companies,” he noted on their integral role in hoisting the industry.
The e-Conomy SEA report projected Vietnam’s continued manufacturing and exports as drivers for overall digital economy growth.
For the Philippines, the shift to organized e-commerce platforms, from those informal and unorganized, is expected to benefit the industry, it added.
Mr. Razon has seen an opportunity for the government to collaborate with the private sector and build a sustainable ecosystem for e-commerce, which includes the necessary tech talent for its software, alongside a community of skilled entrepreneurs.
When reviewing the Philippine seller base of the top Vietnamese e-commerce software, Mr. Razon saw only 9,000 subscribers, which he said is indicative of only a small volume of e-commerce businesses in the country. This pales in comparison to the 200,000 in Vietnam.
“There are still a lot of people who don’t know about e-commerce,” he noted traders, who have been around for almost 30 years, failing to innovate and maximize online platforms.
“Consumers also lack awareness, and there are a lot of sellers who are scammers, contributing to the stigma toward online platforms,” he added.
Mr. Razon also urged the government to establish regulations for e-commerce sustainability and consumer safety, focusing on proper systems and processes.
The Internet Transactions Act, a priority of President Ferdinand R. Marcos, Jr., which aims to tighten e-commerce regulations, was approved by the Senate on second reading in September last year.
It will classify entities involved in e-commerce in the Philippines as businesses operating within the country, making them subject to domestic laws, alongside the establishment of an e-commerce bureau at the Department of Trade and Industry.
“They didn’t bring it close to stakeholders. Who they consulted more are the big players,” Mr. Canare said on the bill.
“It’s about time that we also include the MSME sector because they are more influential and part of the ecosystem,” he added.
“The government should also benchmark on the countries like Vietnam, Singapore, and India in terms of e-commerce, so they can see how they can regulate or help grow our industry.”
Mr. Razon also advocated for international collaborations to elevate the industry. “We need to reshift to the mindset that the e-commerce industry is played by skilled businesses and professionals, including the programmers.”
“We need to spread awareness, hold trainings, and have a solid community in the Philippines because that is what we see other countries do,” he added.
“Nowadays, a lot of people are inspired to do business. And the best way to do business without entailing too much cost and expertise is doing e-commerce properly.”