(Source: Business Mirror | May 24, 2018)
E-commerce will continue to gain ground in the Philippines as Filipino online shoppers are projected to reach up to 42 million by 2025—all willing to shell out P918 billion for purchases they make on the Web, a recent study conducted by Google and Temasek showed.
Such positive outlook for the industry opens more opportunities for local retailers, especially since this sector is not saturated yet.
Helping promote further developments in the online retail space is the Department of Trade and Industry (DTI) via its Philippine E-Commerce Roadmap.
This guideline is aimed at enabling the Web-based marketplace account for at least a quarter of the country’s GDP by 2020.
Per the DTI, e-commerce is poised to become bigger than ever as the country currently enjoys the fastest Internet-users growth. The agency said the young population and improving buying power in Manila and other cities nationwide will further drive its growth potential.
For Payo CEO and Founder Ofri Kadosh, today’s local consumers are capable of shopping anything they want at any given time—thanks to the emergence of digital technologies.
These modern tools have provided them the convenience of browsing through items while in the comfort of their own homes or even on the go.
With mobility on the rise, merchants reach out and deal with customers not only from the country’s major e-retailers, such as Lazada, Zalora and Shopee, but also through social-media sites like Facebook and Instagram.
Despite these platforms and the booming e-commerce sector, however, many merchants remain reluctant to take full advantage of opportunities to cater to the demand of local online buyers.
“This is due to the low credit-card penetration in the country, where only 8 percent of Filipinos are credit-card holders, while 72 percent still do not have bank accounts—a challenge that merchants in the Philippines have to face,” he said.
What also holds back the local market from embracing e-commerce are stories of online shopping scare like not receiving the ordered items or getting something that looks different from what the buyers wanted.
These veer away potential clients from using other payment methods besides cash on delivery (COD). In fact, 93 percent of online shoppers in the country at present still prefer paying in cash, Kadosh cited.
“Fifty percent of the world’s population is unbanked, and merchants miss out on customers and billions of dollars, especially in developing markets, such as the Philippines, where cash on delivery is still preferred,” he explained.
The top executive emphasized the importance of a COD gateway system in opening the e-commerce market to the Filipinos, even if they do not have bank accounts.
“It is understandable why online shoppers are not willing to risk their money when shopping online. However, merchants also find it hard to integrate COD into their payment system due to high cancellation rates and unsuccessful deliveries,” Kadosh said.
“This is exactly why we are also trying to build consumer trust by providing a COD gateway system that merchants can use in their respective e-commerce platforms. It is a win-win situation. The merchants get to earn more, and consumers get to shop online without any worries,” he added.
With Payo, consumers can now place their orders and a pool of data scientists will then process every sale, all the while recording and analyzing the client’s order history to determine likely problematic accounts to help reduce cancellation rates and increase revenues.
Read More: Here