E-commerce Thrives in the Philippines During the COVID-19 Lockdown
By Kyra Dalizon
The COVID-19 pandemic has changed the way we shop. With all the imposed restrictions, it is not easy to go out and continue to shop as normal, as the fear of contracting the virus or violating social distancing protocols is apparent. In today’s world, it is undeniable that online shopping thrives even more than it did before. The Philippines is no exception when it comes to this popularity of the e-commerce industry.
The Philippines is a country fond of bargains and all things cheap but functional. There is a large area in the capital Manila called Divisoria, a one-stop commercial center for every item you can think of. This is where Filipinos find the cheapest items available in the city. Full of shops selling similar items, competitive pricing is apparent, and shoppers can take advantage of wholesale prices with big discounts, or haggle with the sellers to reach the best price point. Filipinos are very fond of this large shopping center, surrounded with friendly sellers and the cheapest and most interesting finds. Those who are not from Manila, make it a point to visit Divisoria each time they come to the capital. Not only individuals shop in this enormous commerce hub, but businesses also source their items from here. Now that the pandemic has taken a toll on public activities and more, how are individuals and businesses coping? Yes, it is still possible to have arrangements with sellers, and some still prefer this. Recently, however, even Divisoria businesses have set up their online shops to adapt not only to the pandemic situation, but also to the rising demand for e-commerce activities in the country.
Online Shopping: Retail and Wholesale
In a previous blog post, I talked about the thriving FinTech Industry in the Philippines. This boom in the industry is also related to the above mentioned restriction brought about by COVID-19. Contactless solutions are very much sought after nowadays, even by small businesses. QR codes are easily becoming a popular payment option. With just one scan from your phone’s camera, all purchases can be paid for. Similarly, the efficiency and time-saving qualities of online shopping are taking the Philippines by storm. With just a few clicks, the hottest and latest items will now be yours, and most people like the convenience that online shopping platforms offer.
The most popular ones are the sites that also shoulder the logistical processes, as picking up and delivering items could take more time if done by third parties. On these e-commerce websites, “shops” are easily set up, and after a few verification steps, successful applicants can start operating. The in-house logistics and the courier partners -if the area is out of coverage- will then pick up the items directly from the seller’s warehouse. These websites are not strict and don’t require certifications, so even stay-at-home sellers can open shops, and the same pick up and delivery processes apply to them.
Wholesaling has become very easy now, thanks to e-commerce websites such as Shopee and Lazada. As they allow international sellers to ship to the Philippines at minimal costs, high delivery prices are now eliminated. The majority of the buyers of wholesale items belong to the resellers group, and more often than not, they also have online shops. It seems like nowadays, people prefer online operations not only because of the pandemic, but also since a physical shop involves a lot more requirements, higher costs, and it will only be limited to the residents of its location and nearby ones. This shows that entrepreneurs in this setting prefer online shops more and more.
Direct from Supplier - Great Prices!
It is undeniable that China is the largest commerce hub, not only in Asia but in the whole world. As these platforms support wholesaling and merchandising, vast differences in prices await the Filipinos targeting to resell and repack these items bought in bulk. Filipinos love bargains, and what other way can you get the lowest price offered than to buy directly from the commerce king? This is why e-commerce wholesale continues to be a choice for most merchants. There simply is less stress in having everything ready on one website. To reiterate what I said above, the internet makes sourcing and procurement a whole lot easier. This comforts the Filipino business owners.
Today, everything you see on social media is ready to be purchased after just one search. For each item, there are tons of varieties to choose from, and if you’re particular with prices, it is very easy to find the cheapest one, just by using filters. This makes online shopping more fun and convenient, especially to those starting a business, or those who simply want to get the most out of their money. Online reviews are also very helpful in assessing if a shop is legitimate, or if it keeps its promises, since the comments come from buyers themselves. For buyers, the reviews are very helpful, as they will be able to see actual pictures of the items instead of the beautified, photoshopped ones posted by sellers. On the other hand, it can be a double-edged sword on the seller’s end, as they can get positive reviews that encourage potential buyers, or negative reviews that will sway buyers away from their offers, just by reading one unsatisfied customer’s comment.
This article covered the popularity of online shopping in the Philippines brought about by e-commerce platforms from Asia Pacific, such as Shopee, Lazada, and Zalora. The most popular items are actually the ones that come from abroad, and that consumers won’t find in local grocery shops or shopping malls. Prices on these platforms are much lower than store prices because the products come directly from the supplier. In the Philippines, these websites are more popular than Amazon because they offer a Cash on Delivery payment method, which is very important for a country reliant on cash. These websites also offer free shipping, and frequent discounts, urging more users to buy. Social media also play a big role in its popularity.
There are many e-commerce opportunities for exporters, as Filipinos continue to prove their interest in goods found abroad. It has become a habit for both individual consumers and businesses to explore online trade, as its convenience tops the ability to see and feel the items in person. Even before the stay-at-home situation, online shops were already popular because, as mentioned, Filipinos love bargains. In this practice, everyone wins - buyers, sellers, and e-commerce websites alike.
Kyra Dalizon is an intern at M74 from the Philippines. She studies Management and Politics at Ateneo de Manila University. Her interests include marketing, financial technology, and Southeast Asia’s socioeconomic development.
The views expressed above are those of the author and do not reflect the official position of the M74 Group, which remains neutral on all matters. Publishers assume no liability for content.