By Nickky Faustine P. de Guzman
Fridays and the numbers 15 and 30 are usually deadly combinations. They mean one thing, and it’s a word written in bright red boldface: SALE. The red tag heralds both the coming of an empty wallet and gridlock in Mandaluyong or Makati where the giant shopping malls are. Mall sales also mean a hefty surcharge on the price of your Uber or Grab car ride — if you even manage to book one.
But the word “sale” means a good kind of traffic in online Web sites.
In anticipation of the holiday and the hassles that go with it, some online shopping Web sites in the Philippines, including the biggest names like Lazada, Zalora, and Shoppee, offered a simultaneous 11.11 (or Nov. 11) markdown, and will be offering more sale as Christmas approaches.
I was among the millions who logged on through my phone, swiped left and right, and shopped in the comfort of my own home. I bought my brother a Casio leather watch which was on sale for P1,000 and received it two days later.
Online sales are win-win: shoppers save time and energy while the Web sites cash in.
“It’s the Netflix generation. People just want to chill. They don’t want to go out to the mall and elbow their way through the crowd or sit in traffic,” Macy Castillo, Shoppee head of business, told BusinessWorld at the sidelines of its thanksgiving event on Nov. 16.
Shoppee is a relatively new mobile marketplace in the e-commerce industry, having started operations only last year, but it already has a presence in six other countries: Taiwan, Singapore, Malaysia, Indonesia, Vietnam, and Thailand.
Vince Flores, public relations head of Zalora, agreed. “Online shopping is available 24/7 so customers don’t even need to wait until the weekend to get their shopping done. They can do it on their mobile, during their lunch at work, or before they turn in at night — all without having to suffer through terrible weekend or payday traffic,” he said in a separate interview.
They said they are seeing “a big shift from people who want to go online shopping.”
And the “big shift” is translated very well online. The 11.11 sale amassed five million page visits on Lazada alone, which translated to 400,000 shipped items, Inanc Balci, Lazada co-founder and CEO, told BusinessWorld in an interview on Nov. 17.
According to Alexa, a California-based company that provides commercial web traffic data and analytics, Lazada is the seventh biggest Web site in the Philippines in terms of traffic, or page views, and has the biggest market share in the country for online shopping. Facebook remains the top go-to Web site in the Philippines followed by Google, Youtube, Yahoo, and Twitter.
Other online shopping players also did well during the sale. “Our sales for 11.11 went beyond our projections, though we can’t disclose any specific figures just yet,” said Zalora’s Mr. Flores.
Zalora is a shopping Web site dedicated to fashion items while Lazada is a bigger marketplace, offering all kinds of merchandise except for food which may spoil easily.
SHOPPING OUTSIDE METRO MANILA
The online shopping sites said they do not compete against shopping malls, rather, they are enablers to the growing e-commerce industry in the country and are good options for people outside Metro Manila who do not have access to a shopping mall nearby.
Ms. Castillo said Shoppee is strong outside the metro, particularly in places without easily accessible malls like Quezon Province, Nueva Ecija, and Cagayan de Oro.
“More than half of our customers come from outside Metro Manila,” added Mr. Balci.
This is why delivery dates depend on where the merchandise is coming from and where it is being shipped to Lazada, for instance, adds a P700 delivery fee when shipping to remote areas outside regular delivery zones, and is ready to ship items as small as a headphone or a bracelet to far-flung places, like Bongao in Tawi-Tawi, where it shipped an item during the 11.11 sale.
“We don’t compete against malls. What we do is we enable retailers. Think of yourself as a retailer. There are over 7,000 islands in the Philippines and you cannot open a store in every street and island. It is not feasible,” said Mr. Balci.
He said shopping Web sites are “sort of like an additional channel to offline retailers [and to] shopping malls, like a second floor. We enable.”
“It helps people to have options, but in the end, I don’t think we steal sales from offline retailers,” he said.
I pass by the Makati shopping malls Greenbelt, Landmark, Glorietta, and SM — in this order — every time I make my way to the MRT to go home. And there, written on their doors are announcements of the extension of mall hours until 11 p.m. for the holidays. And as their shops stay open longer because of the extended hours, some big retail brands like Samsung, Penshoppe, Mango, Loreal, Nivea, and Bench, which are traditionally housed inside airconditioned malls, have also started placing products in the online shopping sites.
ONLINE SHOPPING CHALLENGES
While online shopping seems as easy as scrolling through the virtual items, the shopping Web sites said electronic commerce in the Philippines faces two hardships: logistics and payment infrastructure.
According to the joint report “Can Southeast Asia Live Up to Its E-commerce Potential” by Google and Bain and Co., a management-consulting firm, the growing e-commerce sector in Southeast Asia is projected to be worth $70 billion by 2020, which is small in comparison with China’s market which is worth more than $500 billion.
The report said Indonesians are the largest digital consumers with 51 million shoppers, followed by Vietnam (31 million), the Philippines (28 million), Thailand (23 million), Malaysia (14 million), and Singapore (three million).
But the challenges are the logistics, especially in island nations like the Philippines, and the payment infrastructure. In this country, the majority of shoppers still prefer paying cash-on-delivery (COD).
At Zalora, 75% of the customers still prefer COD, while Shoppee and Lazada both said a “significant majority” still opt for COD. There is nothing wrong with COD — “people want to see the items first, they like touching things before they part with their money. It’s part of our culture,” said Ms. Castillo — but going cashless also has its benefits.
According to reports previously published in BusinessWorld, credit and debit card penetration in the country was 9.2% in 2010 and increased slightly to 11.4% by 2015. Cash is still king with 82.3% of business transactions done with bills and coins. According to Pia Bernadette Roman-Tayag, head of the Bangko Sentral ng Pilipinas (BSP) Inclusive Finance Advocacy Staff, of the 2.5 billion payment transactions in the country, only 1% is done electronically while 99% are through cash or check.
The BSP is pushing a shift to e-payment under the National Retail Payments System, because e-payments promote financial stability and inclusion. “…Cash is very expensive and cash is also not very safe… We hope to see more digital inclusion because what we see is promising figures. Technology has the promise to increase that,” Ms. Tayag said in the BusinessWorld report.
Worried if the online sellers are legitimate? The experts advise clicking on the Web site profile to check the background of the company. It also helps that some online shopping platforms offer a chat room for possible buyers.
“For the buyers we remind them to be prudent in shopping. We have a chat feature so we encourage them to chat before they buy,” said Ms. Castillo.
The country’s biggest online shopping Web sites also have a buyer and seller guarantee, which ensures that a product is genuine and the seller is legitimate.
“[From] time to time, there are merchants that try to sale fakes. I kick them out and we refund our customers to make them happy,” said Mr. Balci.
Shop ‘til you drop: 5 online shopping sites
IT’S less than 30 days before Christmas and the holiday cheer is palpable: the malls are jampacked and the streets are congested (as always). But as more and more shopping malls and online sites offer holiday sales, you might miss out on the good deals, so we curated five online shopping Web sites you should bookmark on your phone or laptop.
Sale: Today until Dec. 12
Items: 4.1 million
Plus points: Tracks your order online and free delivery within Metro Manila
It has the largest number of merchandise options in the country, catering to people of all ages and lifestyles, spanning fashion and sports to gadgets, appliances, and even pet accessories. The only things Lazada does not sell are “illegal things and food items with near-date expiration,” said its co-founder and CEO, Inanc Balci.
Sale: Today until Dec. 24
Items: One million
Plus points: Lets you chat with the seller
With over three million mobile application downloads in the Philippines, Shoppee lets you be a buyer and a seller at the same time. Do you have a pre-loved shirt you want to dispose of or an unopened book you are no longer interested in? Sell them online — just be sure to mark items as brand new or used.
Sale: Dec. 12-15
Items: 120,000 fashion items
Plus points: It has a pop up store in Bonifacio Global City where you can try things on.
Looking for a Christmas gift for mom or dad? Zalora covers all fashion items from bags and watches to shoes and fancy tops. It has free delivery when the items in your shopping bag exceeds P995.
Sale: Ongoing while the item lasts
Items: Over 1,000 beauty products
Plus points: Buy-one-take-one items up for grab.
The make-up fans would be ecstatic to know that Althea, an online store specializing in Korean make-up brands, offers free shipping on orders above P999. So buy that lip and cheek tint you’ve been eyeing.
Items: Over 500,000
Plus points: Includes real estate.
One of the biggest online platforms for selling used goods, OLX, which started in 2006 in New York, USA and Buenos Aires, Argentina, offers a variety of listings ranging from gadgets to furniture to cars, and even real estate. Fancy a house and lot for Christmas?