Only six years ago, Southeast Asia’s leading digital commerce platform, Lazada, was hardly moving the wares of its merchants and was barely growing as a company, recalled Tristan De Belloy, its former chief marketing officer.
Today, Lazada handles and fulfils thousands of transactions daily between local and international merchants, small businesses and the biggest brands, and an increasing number of Filipino consumers across the country.
It took the Philippines quite some time to grow into the digital commerce industry, and the market is still maturing. But for Tristan De Belloy, his experience in Lazada and the positive outlook on digital commerce prompted him to start his own performance marketing agency, Quanta Digital.
In fact, this outlook was shared by the rest of the panel which sat down during the IMMAP’s 6th General Membership Meeting for 2019 to tackle the rapidly growing digital commerce industry in the Philippines. Chay Mondejar-Saputil, Client Partner of Facebook Philippines moderated the group composed of De Belloy; Anthony Thomas, CEO, Mynt; Jimson Gow, Performance Head, Google Philippines; Albet Buddahim, CEO, Katapult Digital; Bianca Sing, Digital and Media Lead, L’Oreal Philippines; and Bhong Bibi, Founder & CEO, Green Ink Solutions and Technology.
Getting into the digital commerce industry up and running in the Philippines was an uphill climb. While De Belloy and Lazada were encouraging consumers to shop on their platform, Thomas and GCash were trying to get Filipinos to adopt wireless cash transactions.
Considered as digital financial services pioneers, GCash wanted to bridge offline and online both for its merchants and for the average Filipino consumer. Several years ago, the platform was mostly used just to transfer or send money between individual merchants, small businesses, and consumers. “We went to offline merchants from different categories to have QR codes to move people from the offline world to the online world,” Thomas shared. And just two years ago, GCash decided to pivot its marketing towards younger consumers who are more trusting of technology and looking for more convenient options to store, transfer, and make cash transactions.
It was this trust (or distrust) of digital monetary transactions that was the biggest barrier according to Katapult Digital’s Buddahim. Filipinos are wary of either losing their money or not getting the right or expected product they bought online. “We are one of the markets that has high cash-on-delivery numbers because we don’t trust it,” he stressed. Yet, he was also seeing a shift in Filipinos’ online shopping behavior. As more consumers try and are satisfied with their transactions, they also act as digital commerce advocates to others. Today, more and more people start to trust in the technology and in online transactions.
A big part of gaining this trust is of course, fulfilling orders correctly and promptly. Gow cited logistics as an important cog in the wheel. For businesses, they need to send their products to consumers in the right condition at the time it was promised in order for their consumers to trust in the process. Mondejar-Saputil added to his point, “when the logistics portion got better, everyone started getting on board. When the nanny of my child got a delivery from Shopee, I knew a shift happened.”
On the brand side, knowing and doing digital commerce are two different things, explained L’Oreal Philippines’ Sing. While the company’s leadership in the country was encouraging of digital commerce, manpower and the availability of talent became an issue. “Yes, we wanted to do e-commerce but we didn’t have enough people. So many years ago, we didn’t know that e-commerce was going to be a thing, so hiring is also not that easy,” Sing shared. “Even if we hire enough people, the talent didn’t match,” she added. Mondejar-Saputil agreed saying, “digital commerce is flying but there is never enough people who can actually execute performance marketing.”
Green Ink’s Bibi summed up the barriers to digital commerce: payment, logistics, and consumers’ knowledge. Consumers from international markets are used to paying through PayPal and credit cards. Filipino consumers have less access to such financial services and prefer to pay cash-on-delivery. It also took several years for a logistics network to grow in the country. Today, it is encouraging to see multiple logistics options that also accept cash-on-delivery. Lastly, knowledge on how to buy and place orders is lacking especially for older consumers. However, younger consumers are leading the thrust in growing digital commerce.
Yet, it’s from the mistakes that the panelists learned the most of how to grow their digital commerce businesses. “One thing in common is the number of mistakes we’ve made in this industry,” Thomas enthused.
For Thomas and GCash, many financial institutions make the mistake of not knowing the customer, especially with their experience in making transactions with them. GCash wanted to solve consumers’ problems with their banking experience. With the platform, consumers can get their accounts verified as simple as providing a photo or copy of their ID and their own selfie. Facial recognition technology matches the ID with the person within minutes. The company saw an inflection point when it enabled payments through any bank. Instapay made it easy to make money transfers from any bank as well as payments. The platform has also made it easy for Filipinos to save and invest. Just a month ago, GCash launched the GForest which involved consumers in planting trees just by making paperless transactions on the app. “We give them rebates, cash backs, and now we’re planting trees. If you give something that matters to them, it produces a movement,” Thomas shared.
Overall, Thomas stressed the importance of solving problems for consumers. “It’s not just about our product but what problem I solve. We see there are problems paying bills, transferring to and from bank accounts, and making online payments. It’s not about the features, it’s about what problem we’re solving for the customer,” he said.
“E-commerce creates value just by making products accessible and available any time, anywhere,” added Buddahim. “There’s a factor of time, there’s also a factor of spending energy. It’s actually making time for consumers,” he stressed.
From the performance marketing side, Gow stressed the importance of measuring all efforts, but to also streamline these measurements to get the data that matters to the business. “Sometimes, you run your media campaign, you run your media strategy, and that’s the pit fall, you try to solve for this and that. But really, what are you trying to solve? What are you trying to test for?” he added.
Sing also stressed the importance of data in determining how to reach business objectives. “Data is important. We look at it and we see that okay this is the business we want to achieve to be profitable then we can see what channels are profitable for me,” she said. Secondly, she encouraged brands to keep on trying and learning how to execute digital commerce.
This continuous learning and re-learning is also what Bibi has held on to as he continues to grow his digital commerce businesses. Learn the basics and re-learn the developments of different digital channels to be able to adapt your strategy, he advised.
Mondejar-Saputil summed up the discussion by encouraging brands and big and small businesses alike to be part of the digital community so they can all leverage on learnings. IMMAP as this digital community, invites everyone to be part of that ecosystem that enables and propels all businesses to grow.