(Cebu Daily News | 15 May 2017)
Traditional retail stores in the country will continue to thrive despite the growing global digital commerce industry, which has seen the closure of big brands in the United States and other developed economies in recent years.
Robert Go, Philippine Retailers Association (PRA) Cebu Chapter president, said the “death” of traditional retail stores in the Philippines would not happen in the near future despite the growing global digital commerce trend.
Go said while the greater Manila and greater Cebu areas have started to adopt online shopping practices, especially among the millennials, the end of “brick-and-mortar” stores is not imminent yet.
“Big cities will adapt faster while rural areas have a long way to go. Electronic commerce (e-commerce) in the Philippines is lagging behind because of our economic environment,” Go told Cebu Daily News in an interview.
Go cited the cost of logistics in the country as a factor, which is presently more expensive than basic commodity margins.
He, however, said that this will change as the Philippines will gain a higher per capita income.
“E-commerce will grow exponentially, even faster than one could imagine,” said Go.
Go said that in Seoul, South Korea, people can shop for groceries online and have them delivered at their doorstep.
Maria Elena Arbon, Department of Trade and Industry (DTI) Cebu provincial director, said that it would take a while before the “death” of traditional retail stores in the Philippines happens due to several factors.
Among these are the current state of the country’s internet service, including speed, presence, and cost of data plans.
She also pointed out that culturally, malls are used differently here.
“The malls right now function as spaces for networking, meet-ups, as well as to launch advocacies and inclusive development initiatives such as trade fairs. People go to the malls here for various reasons other than shopping,” she said.
However, she said that the possibility of disruption in the retail sector should not be discounted, even more so now that local e-commerce and its entire ecosystem of players are growing.
Big retail stores and malls are also making their moves to play a prominent role in the e-commerce space, Arbon added.
The Philippine E-Commerce Roadmap 2016-2020 targets to contribute 25 percent to the country’s gross domestic product by 2020 from 10 percent in 2015 based on estimates made by iMetrics Asia Pacific Corporation.
In 2013, the Philippines logged $1.5 billion in e-commerce sales, and DTI’s Philippine E-Commerce Outlook for 2018 projects this figure to grow by 101.4 percent by next year.
DTI said that the country’s micro, small, and medium enterprises (MSME), which make up 99.6 percent of all businesses in the Philippines, will largely benefit from this initiative.
-Victor Anthony Silva