In photo during the BusinessWorld Insights (clockwise, from top left) are moderator Keren Concepcion G. Valmonte of BusinessWorld; and panelists Atty. Ruth B. Castelo, Department of Trade and Industry undersecretary for consumer protection group; Anna Melissa Nava, 1EXPORT co-founder and CEO; and Bennett Aquino, Bain & Company associate partner.

By Bjorn Biel M. BeltranSpecial Features Writer 

E-commerce has reached a tipping point at the height of the pandemic, with many consumers turning to digital avenues to purchase products they cannot due to physical restrictions imposed in quarantine. But, such a rapid shift in consumer behavior has left many businesses struggling to adapt. How can businesses use the tools at their disposal to effectively reach consumers in the growing e-commerce market? 

BusinessWorld Insights, the online video conference series by the country’s most respected business daily, has gathered experts in the e-commerce field to attempt to answer this question in a discussion themed “Meeting the evolving needs of consumers in a hyperconnected world” held last Sept. 15. 

To kickstart the discussion, Atty. Ruth B. Castelo, undersecretary for consumer protection group at the Department of Trade and Industry said that the Philippines currently has over a hundred thousand businesses registered for online or internet retail. Illustrating the rapid adoption of e-commerce among Filipinos, registered businesses in the said category surged from 1,663 in 2019 to 88,575 in 2020. 19,673 more were registered, as of August 2021. 

“Especially now during the pandemic, we have limited operating hours of stores. So, consumer need is not being met 100% by physical stores, and so they resort to online transactions. There are also limited public utility vehicles available for transportation right now and the limited available stocks of products. These are some of the reasons why people resort to online retail shopping,” she said. 

Bennett Aquino, associate partner at global consulting firm Bain & Company, noted that the Philippines is not alone in this regard. 

“In 2020, Southeast Asia’s migration from the offline to the online economy broke all estimates. Changes that were expected to take place over half a decade took place in only one year, in large part because of the consumption habits brought about by the pandemic,” he said. 

“So, the question for 2021 was which of these changes are transient and which ones will last, and how will consumer patterns change over time?” 

According to Bain & Company research, by the end of 2021 there will be projected 350 million digital customers in Southeast Asia. For the Philippines, this equals to 61 million customers, representing 78% of the population older than 15, the second highest percentage in the region behind Indonesia. Average spending for digital consumers expected to grow by 60% this year, and by 2026 this number will nearly double. 

This suggests that e-commerce will become a certainty in the retail landscape for the years to come. Mr. Aquino pointed out that the future challenge for businesses will move from ‘How do I acquire new digital customers?’ to ‘How do I gain a share of their wallets as their spending online increases?’ 

“While it’s obvious that demand has been a clear driver for the growth of this online economy, the fact that it’s growing at hyper-speed has been in large part to the less friction in supply,” he said, noting that 1.7 times more online shoppers pay via the prevalence of e-wallets, the $2.5 billion in investments in logistics startups, as well as the quality assurance that has emerged in the market. 

Anna Melissa Nava, co-founder and CEO of end-to-end exporting platform 1EXPORT, pointed out that the paradigm shift has also caused newfound issues in exporting, as micro, small and medium enterprises (MSMEs) face challenges in global trade such as heightened competition, inaccessibility to sales channels, high prices, and logistics issues. This has resulted in emerging trends such as dropshipping and community-based markets. 

“Dropshipping is a fulfillment method where a store doesn’t keep the products it sells in stock, but it’s the manufacturers that delivers the products to wherever the buyer is. This has grown significantly over time, to a hundred billion-dollar market,” she said. 

An interesting trend that has emerged in the Philippines in particular was the use of balikbayan boxes among MSMEs. Balikbayan boxes, Ms. Castelo noted, has seen an increase in usage during the pandemic as people ask relatives and associates to put products in the boxes as personal effects to get them cleared through customs. 

“This is a trend that is significantly increasing and it is disrupting the exporting industry because they don’t go through traditional means,” she added. 


Recognizing the issues concerning e-commerce, Ms. Castelo suggested that businesses adopt new strategies to take advantage of the opportunities e-commerce offers. 

“Get social. Take advantage of all the social media pages that are available for free. It is a very good way of doing word-of-mouth marketing and customers that are satisfied with your service will be able to share their experience and promote you without knowing it. And then, please make sure that your audience is very specific — from interests to purchasing behavior,” she suggested. 

“Most importantly, please comply with the law. It’s very important that you build consumer confidence, [because] that will not be there if they know that the business is not registered or does not comply with the law.” 

“Businesses must rewrite a multi-year digital-first strategy. There are many things needed for the immediate term, but digital is also for the long game,” Mr. Aquino of Bain & Company added. “Brands need to develop a holistic digital strategy and invest ahead of the curve when it comes to enablers such as data analytics, digital marketing, account management, and supply chain. There needs to be a reimagining of consumer engagement, because consumer behavior and the purchase journey is constantly evolving,” 

“Disruptions to business models are happening across all industries, and this will not change. Instead of waiting for a moment or a pause to make plans, businesses must learn how they can adapt now and have a plan for future disruptions via partnerships, agility, and other solutions.” 

This session of #BUSINESSWORLDINSIGHTS is presented by Globe.