Understanding E-commerce & Opportunities in the Philippines

54 Pages·2016·2.84 MB·English

EUROASIA RESEARCH EXPERTS, INC.
Understanding E-commerce &
Opportunities in the Philippines
T A B L E O F C O N T E N T S
WWHHAATT IISS EE-CCOOMMMMEERRCCEE
Definition 2
How does it work 4
Payment Methods 4
Who are the customers 5
AAddvantages andd ddiisaddvantages ffor customers 66
Advantages and disadvantages for retailers 6
OVERVIEW OF THE E-COMMERCE MARKET WORLDWIDE
E-commerce market 8
Main Players 13
Market Trends 16
OVERVIEW OF THE E-COMMERCE MARKET IN ASIA
EE-ccoommmmeerrccee mmaarrkkeett 1188
Main Players 20
Market trends 21
OVERVIEW OF THE E-COMMERCE MARKET IN THE PHILIPPINES
E-commerce Market 23
Main Players 36
Success Stories 37
Challenges 41
Online grocery shopping focus 44
MMaappppiinngg AAnnaallyyssiiss 4499
SWOT 50
Conclusion 51
W H A T I S E - C O M M E R C E ?
D E F I N I T I O N
E-COMMERCE : DEFINITION
E-commerce is short for electronic commerce, and it is defined as the use of electronic systems to engage in commercial
transactions. With this system the parties do not need to meet physically, transactions are completed over the internet.
E-COMMERCE : DIFFERENT TYPES
1. Business to Consumer (B2C)
This is where the business sells goods or services directly to the final costumer without going through any
middleman ((ex : fashion retailer Zara))
2. Business to Business (B2B)
Both buyer and seller are businesses. Products or services are intended for other businesses as opposed to
consumers (ex : Alibaba)
3. Consumer to Consumer (C2C)
This is where consumers conduct transactions with other consumers without any kind of involvement from
businesses. E-commerce sites of this type are generally auction sites or online marketplaces (ex: Ebay).
4. Peer to Peer ((P2P))
This type of e-commerce is used by people who share computer content like files and software with each other
(ex : online torrent website kat.cr).
5. Mobile commerce
This is a form of e-commerce that uses mobile devices to conduct transactions. Everything else about the
webbsite remains thhe same, except thhey are ddispllayedd in a mobbille-frienddlly llay-out, makking it easier for
smartphone users to make purchases through their mobile phones.
2
Source: Slideshare, Bloomidia, Wikipedia
H O W D O E S I T W O R K ?
OORRDDEERR VVAALLIIDDAATTIIOONN
The e-merchant validates the
order and transfers the order
files to the logistic platform
ONLINE PAYMENT LOGISTIC PLATFORM
The customer validates Receives and processes the
his order orders transferred by the e-merchant
oonn tthhee wweebbssiittee
ORDER PREPARATION
CUSTOMER The logistics crew prepares
the orders
DELIVERY TO
CUSTOMER
3
Source: www.ca-logistiques.com
P A Y M E N T M E T H O D S
CARDS PAYMENT ALTERNATIVES DIGITAL
The shopper purchases PAYMENT WALLETS
goods or services using
Alternative Payments Digital Wallets allow
their credit or debit
MMeetthhooddss ddoo nnoott rreellyy oonn sshhooppppeerrss ttoo aassssoocciiaattee tthheeiirr
card online.
cards. Examples credit cards or other
include Online Bank alternative payment
Transfers, Checks, Direct methods to a virtual wallet
Debits, Invoices, Mobile (ex : Paypal). Consumers
Carrier Billings, Offline can then pay using stored
Cash Payments (cash on money in their wallet or
delivery) and Crypto- instantly pay with their
currencies (ex : Bitcoin). virtual card or alternative
method.
4
Source: www.about-payments.com
W H O A R E T H E C U S T O M E R S ?
Tyyppes of Customers Who are theyy Catchingg their attention
Product focused • They have a target product in mind and are • Clear identification of products
focused to find it. • Effective search browser
• Once they do, they buy it and won’t stay on the • Easy access to previously purchased items for simple
online platform. reorder
• Their goal is speed and efficiency • A streamlined checkout to get shoppers in and out as
qquuiicckklly aass ppoossssiibbllee
Browsers • Browsers are leisure shoppers • Strong presence on social media
• They go online for: fun, inspiration, passing • Listings of new, popular, and sale products
time, trend hunting • Easy access to new merchandise through related links
• They usually look at the products online et then and recommended products
ppuurrcchhaassee tthheemm iinn aa pphhyyssiiccaall ssttoorree
Researchers • They are goal driven but don’t need the product • Clear and detailed product descriptions
instantly • User reviews
• They collect information on the products and • Easy comparison between products
prices • Easy-to-edit shopping carts that retain products
• They are focused on buying their product at the between visits
riighht priice on thhe riighht webbsiite
• They will check for reviews
• Researchers flag items of interest, in order to
narrow options and compare. They use the
shopping cart for that matter
Barggain hunters • Look for the best deals • Dispplayyingg sale items alonggside full-ppriced inventoryy
• Need to locate the deals • Listing product prices and associated discounts and
• Available discounts must be easy to use savings
• Allowing easy coupon redemption or applying discounts
automatically when criteria are met
One time shoppers • They may be all of the above • Clear site navigation
• TThhey can bbe giifftt cardds reciipiientts or bbuyers • CCompllette prodductt ddescriipttiions
• One-time need buyer • Checkout without registration
• They appreciates websites where they don’t
need to create an account
5
Sources : nngroup
A D V A N T A G E S A N D D I S A D V A N T A G E S
CUSTOMERS RETAILERS
ADVANTAGES DISADVANTAGES ADVANTAGES DISADVANTAGES
• Practical / Easy access • Privacy and security • Increasing • Privacy and security
• Open 24/7 • Quality : Difficulty to check customer base • Difficulty to maintain
• Time saving products’ quality • Attracts new users security and privacy on the
• Limitless options • Internet Access : Not • Better knowledge of web platform
• Effortless having internet or very slow customers • Credit card fraud
• International access • Open 24/7 all year • Internet Access : Lack of
• PPriices compariison • PPaymentt iissues : HHaviing no •• PPrreesseennccee oonn mmuullttiippllee iinntteerrnneett uusseerrss oorr vveerryy ssllooww
• Reviews credit cards, bank market segments access
• Coupons and deals account, not willing to pay • International • Payment issues :
by card • Drives sales Customers with no credit
• Problems with delivery : • Saves operational costs cards, no bank
CCoosstt,, ddeellaayy,, lloosstt • No pphyysical ppresence accounts,, not willingg to ppayy
items, returns required online
• Hidden Cost : Customs • (Brick & Mortar) • Problems with delivery :
fees, extra handling fees Cost, delay, lost items,
• Customer Service returns
Hard to reach and talk to • Customer Service
• Lack of human interaction • Constant upkeep ((products
• Scams offering, new
deals, software etc.)
6
Sources : Enkiviillage, Business2community, Ecommerce.About, Teach-Ict, Esalestrack, Triua, Argentaire, CreationSitesInternet
O V E R V I E W O F T H E E - C O M M E R C E M A R K E T W O R L D W I D E
E - C O M M E R C E M A R K E T
EECCOONNOOMMIICC IINNDDIICCAATTOORRSS PPEERR RREEGGIIOONN
The growth of global activity should be slower than expected, mainly enhanced by emergent countries and sustained by
minor improvements in Europe. But China’s GDP growth is slowing down, the decline of basic products prices and tensions
in emerging countries will continue to weigh on the growth performance in 2016/2017. The share of e-commerce in GDP is
ssttiillll vveerryy ssmmaallll bbuutt iiss hhiigghheerr tthhaann aavveerraaggee iinn AAssiiaa-PPaacciiffiicc rreeggiioonnss, wwhhiicchh ccaann bbee eexxppllaaiinneedd bbyy hhiigghheerr ppuurrcchhaassiinngg ppoowweerr iinn
China and top Chinese e-commerce players (Alibaba, JD.com etc..)
REGIONS IN TERMS OF SHARE E-GDP
GGrroowwtthh RRaattee ooff tthhee GGlloobbaall GGDDPP
GDP AT SHARE OF
REGION MARKET E-COMMERCE
3.6%
PRICES IN GDP
3.4% 3.4%
Global $73,479bn 2.6%
Asia
$23,215bn 3.3%
Pacific*
3.1%
North
$20,488bn 2.6%
America
EEuurrooppee $$2222,666633bbnn 22.55%%
Latin
2014 2015 2016 2017 $4,494bn 0.8%
America
Mena $2,619bn 0.8%
*The GDP for the major Asian-Pacific economiesare actual. The othercountries
(includingTaiwan, Philippines and Thailand) are basedon EcommerceFoundation’s
calculationfromthe 2012 figures fromthe Worldbank.
8
Sources: WorldBank, TradingEconomics, Statista, 2015, Ecommerce Foundation 2015, IMF