{ "version": "https://jsonfeed.org/version/1.1", "user_comment": "This feed allows you to read the posts from this site in any feed reader that supports the JSON Feed format. To add this feed to your reader, copy the following URL -- /popular-economics/feed/json/ -- and add it your reader.", "home_page_url": "/popular-economics/", "feed_url": "/popular-economics/feed/json/", "language": "en-US", "title": "Popular Economics Archives - 大象传媒 Online", "description": "大象传媒: The leading and most trusted source of business news and analysis in the Philippines", "icon": "/wp-content/uploads/2024/09/cropped-bworld_icon-1.png", "items": [ { "id": "http://www.bworldonline.com/?p=146761", "url": "/popular-economics/2018/03/29/146761/are-filipino-women-having-fewer-children/", "title": "Are Filipino women having fewer children?", "content_html": "

The recent decades saw developing countries experiencing the so-called “demographic transition” — a transition from high birth and death rates to lower birth and death rates that are seen in more developed countries.

\n

This can be seen through the total fertility rate (TFR), a demographic indicator that estimates the average number of live children that a woman would have over her childbearing years of age 15-49 based on current birth trends.

\n

\"data-fertility-rate-1950\"To illustrate, estimates by the United Nations put the TFR of the Philippines at 7.42 live births per woman in the 1950-1955 period, higher than the Southeast Asian average of 5.93 live births per woman.

\n

While the Philippines managed to bring down TFR by 58.9% to 3.05 live births per woman in the 2010-2015 period, this is still above the regional average of 2.35 births per woman as other countries saw faster decelerations in their TFRs during those decades.

\n

\"data-fertility-rate-2010\"The Philippine TFR is also above the 2.1 births per woman replacement rate i.e. the rate at which women give birth to babies just enough to sustain population levels (assuming normal boy-girl sex ratio and low levels of mortality). —\u00a0大象传媒 Research / Christine Joyce S. Casta\u00f1eda

\n

Data Source: World Population Prospects: The 2017 Revision (United Nations, Department of Economic and Social Affairs, Population Division 2017)

\n", "content_text": "The recent decades saw developing countries experiencing the so-called “demographic transition” — a transition from high birth and death rates to lower birth and death rates that are seen in more developed countries.\nThis can be seen through the total fertility rate (TFR), a demographic indicator that estimates the average number of live children that a woman would have over her childbearing years of age 15-49 based on current birth trends.\nTo illustrate, estimates by the United Nations put the TFR of the Philippines at 7.42 live births per woman in the 1950-1955 period, higher than the Southeast Asian average of 5.93 live births per woman.\nWhile the Philippines managed to bring down TFR by 58.9% to 3.05 live births per woman in the 2010-2015 period, this is still above the regional average of 2.35 births per woman as other countries saw faster decelerations in their TFRs during those decades.\nThe Philippine TFR is also above the 2.1 births per woman replacement rate i.e. the rate at which women give birth to babies just enough to sustain population levels (assuming normal boy-girl sex ratio and low levels of mortality). —\u00a0大象传媒 Research / Christine Joyce S. Casta\u00f1eda\nData Source: World Population Prospects: The 2017 Revision (United Nations, Department of Economic and Social Affairs, Population Division 2017)", "date_published": "2018-03-29T06:22:51+08:00", "date_modified": "2018-03-29T06:22:51+08:00", "authors": [ { "name": "大象传媒", "url": "/author/blexticauldulack/", "avatar": "https://secure.gravatar.com/avatar/1311207d4ac1996cb586666fe3d56418ca9f007d735b74eb19d3fa440df5c8b4?s=512&d=mm&r=g" } ], "author": { "name": "大象传媒", "url": "/author/blexticauldulack/", "avatar": "https://secure.gravatar.com/avatar/1311207d4ac1996cb586666fe3d56418ca9f007d735b74eb19d3fa440df5c8b4?s=512&d=mm&r=g" }, "tags": [ "fertility rate", "Population", "Research", "Popular Economics" ] }, { "id": "http://www.bworldonline.com/?p=140115", "url": "/infographics/2018/03/08/140115/who-earns-more/", "title": "Who earns more?", "content_html": "

The country’s average daily basic pay \u2014 defined as the pay for normal/regular working hours before deductions for social security contributions and withholding taxes \u2014 increased 5.89% in 2016 to P400.95 with a 5.94% increase for men and 6.04% for women, according to the Philippine Statistics Authority’s (PSA) 2017 Gender Statistics on Labor and Employment.

\n

On a disaggregated basis, how much do the average wages of men and women workers differ? \u2014 via 大象传媒 Research

\n\n", "content_text": "The country’s average daily basic pay \u2014 defined as the pay for normal/regular working hours before deductions for social security contributions and withholding taxes \u2014 increased 5.89% in 2016 to P400.95 with a 5.94% increase for men and 6.04% for women, according to the Philippine Statistics Authority’s (PSA) 2017 Gender Statistics on Labor and Employment.\nOn a disaggregated basis, how much do the average wages of men and women workers differ? \u2014 via 大象传媒 Research", "date_published": "2018-03-08T17:30:04+08:00", "date_modified": "2018-03-08T17:30:04+08:00", "authors": [ { "name": "大象传媒", "url": "/author/blexticauldulack/", "avatar": "https://secure.gravatar.com/avatar/1311207d4ac1996cb586666fe3d56418ca9f007d735b74eb19d3fa440df5c8b4?s=512&d=mm&r=g" } ], "author": { "name": "大象传媒", "url": "/author/blexticauldulack/", "avatar": "https://secure.gravatar.com/avatar/1311207d4ac1996cb586666fe3d56418ca9f007d735b74eb19d3fa440df5c8b4?s=512&d=mm&r=g" }, "tags": [ "gender", "labor", "men", "Research", "salary", "wage", "women", "Infographics", "Popular Economics" ] }, { "id": "http://www.bworldonline.com/?p=129746", "url": "/popular-economics/2018/02/14/129746/bitcoin-two-cents-cryptocurrencies/", "title": "Bitcoin and cryptocurrencies: what you need to know", "content_html": "

By Mark T. Amoguis, Researcher

\n

So far, 2017 was Bitcoin\u2019s best year. From around $450 per unit in May 2016, it shot up to almost $20,000 in December \u2013 a record-high on account of investors\u2019 increased risk-on sentiments. This quick climb led some economists to tag Bitcoin as a bubble waiting to burst similar to tulipmania in the 1630s and the dot-com bubble almost 20 years ago.

\n

Since then, Bitcoin has fallen about 70% from last year\u2019s peak and below the $10,000 mark amid concerns of increased regulation in developed economies such as South Korea and China. Since then, its price hovered around the $10,000 per unit mark.

\n

This degree of volatility, however, was not the first time Bitcoin\u2019s stability was put to the test. Like any tech-based platform, Bitcoin exchanges were prone to security breaches with the most prominent being that of Tokyo-based Mt. Gox in 2011. In 2014, Mt. Gox, which at the time held 70% of all bitcoin transactions worldwide, filed for bankruptcy.

\n

In the Philippines, meanwhile, the Bangko Sentral ng Pilipinas (BSP) \u2013 the country\u2019s monetary authority \u2013 is in the process of approving entities seeking to operate as a Bitcoin exchange after authorizing two \u2013 Betur, Inc. (also known as Coins.ph) and Rebittance, Inc. \u2013 last year, which are considered as remittance companies and thus required to comply with regulations such as rules on anti-money laundering.

\n

Transactions of so-called virtual currencies in the country reached a monthly average of over $8.8 million per month in the first half of 2017 from $2 million and $6 million in the entire 2015 and 2016, respectively, according to Reuters, citing BSP data.

\n

What is Bitcoin?

\n

Born from the wreckage of the 2007-2008 Global Financial Crisis, a hacker (or a group of them — nobody really knows) created the trustless financial medium — the bitcoin.

\n

Bitcoin\u2019s origins can be traced to 2008 when Satoshi Nakamoto, a pseudonym of an anonymous programmer wrote a whitepaper that year outlining the mathematical theory of a peer-to-peer currency. This materialized a year later into what we know now as the Bitcoin software.

\n

In its early days, it was used only by cryptography geeks with its price next to $0 in 2009. In 2010, the trading of Bitcoin started according to BuyBitcoinWorldwide.com.

\n

There are also other cryptocurrencies as well with those like Ethereum, Litecoin, and Ripple gaining popularity.

\n

They are also open-source, meaning that nobody owns or controls these cryptocurrencies, not even monetary authorities.

\n

While different in value and appeal, they all hinge on one technology \u2013 the blockchain.

\n

The Blockchain

\n

Blockchain is a distributed public ledger where all confirmed transactions (in chronological order) can be verified and being maintained by numerous computers all around the world. It is enforced with cryptography to keep it secure.

\n

\u201cThat’s really the most important breakthrough to me, when bitcoin arrived,\u201d John Bailon, co-founder and chief executive officer of SCI Ventures, Inc., said in an interview, referring to the blockchain technology. \u201cIt’s not so much the currency behind it.\u201d

\n

\u201cBlockchain is the best way to record digital transactions of anything not just money, it can be information, it can be land titles, any sort of assets, anything that you need to track in a secure manner, blockchain is the best technology for these,\u201d he added.

\n

SCI is the local company behind bitcoin-related products such as Rebit (remittance service using bitcoins), Bitbit (bitcoin wallet), and Buybitcoin (bitcoin exchange).

\n

Creation

\n

The computers that maintain the blockchain can\u2019t create one all at the same time. These computers must compete in solving a mathematical problem that takes around 10 minutes to process a block \u2013 a process called \u201cmining.\u201d

\n

By design, only 21 million bitcoins will be \u201cmined\u201d at some point, making the cryptocurrency deflationary in nature.

\n

SCI\u2019s Mr. Bailon said that transacting via bitcoin is quick, but it also depends on the volume of transactions that are happening in the network.

\n

\u201cFor example, if you send bitcoin to me right now, it would hit the network within seconds. But the best practice there, if I don’t know you, not that distrust you but I just don’t know you, I need one confirmation. A confirmation takes about 10 minutes. Sometimes it can go an hour depending on the volume of the traffic. Sometimes it happens within seconds,\u201d Mr. Bailon explained.

\n

\u201cThe nature of bitcoin is that there’s always a fee market. Meaning the higher the fee you pay, the quicker your transaction to be confirmed…,\u201d he added.

\n", "content_text": "By Mark T. Amoguis, Researcher\nSo far, 2017 was Bitcoin\u2019s best year. From around $450 per unit in May 2016, it shot up to almost $20,000 in December \u2013 a record-high on account of investors\u2019 increased risk-on sentiments. This quick climb led some economists to tag Bitcoin as a bubble waiting to burst similar to tulipmania in the 1630s and the dot-com bubble almost 20 years ago.\nSince then, Bitcoin has fallen about 70% from last year\u2019s peak and below the $10,000 mark amid concerns of increased regulation in developed economies such as South Korea and China. Since then, its price hovered around the $10,000 per unit mark.\nThis degree of volatility, however, was not the first time Bitcoin\u2019s stability was put to the test. Like any tech-based platform, Bitcoin exchanges were prone to security breaches with the most prominent being that of Tokyo-based Mt. Gox in 2011. In 2014, Mt. Gox, which at the time held 70% of all bitcoin transactions worldwide, filed for bankruptcy.\nIn the Philippines, meanwhile, the Bangko Sentral ng Pilipinas (BSP) \u2013 the country\u2019s monetary authority \u2013 is in the process of approving entities seeking to operate as a Bitcoin exchange after authorizing two \u2013 Betur, Inc. (also known as Coins.ph) and Rebittance, Inc. \u2013 last year, which are considered as remittance companies and thus required to comply with regulations such as rules on anti-money laundering.\nTransactions of so-called virtual currencies in the country reached a monthly average of over $8.8 million per month in the first half of 2017 from $2 million and $6 million in the entire 2015 and 2016, respectively, according to Reuters, citing BSP data.\nWhat is Bitcoin?\nBorn from the wreckage of the 2007-2008 Global Financial Crisis, a hacker (or a group of them — nobody really knows) created the trustless financial medium — the bitcoin.\nBitcoin\u2019s origins can be traced to 2008 when Satoshi Nakamoto, a pseudonym of an anonymous programmer wrote a whitepaper that year outlining the mathematical theory of a peer-to-peer currency. This materialized a year later into what we know now as the Bitcoin software.\nIn its early days, it was used only by cryptography geeks with its price next to $0 in 2009. In 2010, the trading of Bitcoin started according to BuyBitcoinWorldwide.com.\nThere are also other cryptocurrencies as well with those like Ethereum, Litecoin, and Ripple gaining popularity.\nThey are also open-source, meaning that nobody owns or controls these cryptocurrencies, not even monetary authorities.\nWhile different in value and appeal, they all hinge on one technology \u2013 the blockchain.\nThe Blockchain\nBlockchain is a distributed public ledger where all confirmed transactions (in chronological order) can be verified and being maintained by numerous computers all around the world. It is enforced with cryptography to keep it secure.\n\u201cThat’s really the most important breakthrough to me, when bitcoin arrived,\u201d John Bailon, co-founder and chief executive officer of SCI Ventures, Inc., said in an interview, referring to the blockchain technology. \u201cIt’s not so much the currency behind it.\u201d\n\u201cBlockchain is the best way to record digital transactions of anything not just money, it can be information, it can be land titles, any sort of assets, anything that you need to track in a secure manner, blockchain is the best technology for these,\u201d he added.\nSCI is the local company behind bitcoin-related products such as Rebit (remittance service using bitcoins), Bitbit (bitcoin wallet), and Buybitcoin (bitcoin exchange).\nCreation\nThe computers that maintain the blockchain can\u2019t create one all at the same time. These computers must compete in solving a mathematical problem that takes around 10 minutes to process a block \u2013 a process called \u201cmining.\u201d\nBy design, only 21 million bitcoins will be \u201cmined\u201d at some point, making the cryptocurrency deflationary in nature.\nSCI\u2019s Mr. Bailon said that transacting via bitcoin is quick, but it also depends on the volume of transactions that are happening in the network.\n\u201cFor example, if you send bitcoin to me right now, it would hit the network within seconds. But the best practice there, if I don’t know you, not that distrust you but I just don’t know you, I need one confirmation. A confirmation takes about 10 minutes. Sometimes it can go an hour depending on the volume of the traffic. Sometimes it happens within seconds,\u201d Mr. Bailon explained.\n\u201cThe nature of bitcoin is that there’s always a fee market. Meaning the higher the fee you pay, the quicker your transaction to be confirmed…,\u201d he added.", "date_published": "2018-02-14T14:26:29+08:00", "date_modified": "2018-02-14T14:26:29+08:00", "authors": [ { "name": "大象传媒", "url": "/author/blexticauldulack/", "avatar": "https://secure.gravatar.com/avatar/1311207d4ac1996cb586666fe3d56418ca9f007d735b74eb19d3fa440df5c8b4?s=512&d=mm&r=g" } ], "author": { "name": "大象传媒", "url": "/author/blexticauldulack/", "avatar": "https://secure.gravatar.com/avatar/1311207d4ac1996cb586666fe3d56418ca9f007d735b74eb19d3fa440df5c8b4?s=512&d=mm&r=g" }, "tags": [ "bitcoin", "Popular Economics", "Research" ] }, { "id": "http://www.bworldonline.com/?p=129743", "url": "/popular-economics/2018/02/14/129743/philippines-ranks-second-asia-terms-fulfilling-relationships/", "title": "The Philippines ranks second in Asia in terms of fulfilling relationships", "content_html": "

Christine Joyce S. Casta\u00f1eda, Senior Researcher

\n

The Philippines was in the top three of nine countries in terms of meeting needs and expectations in their relationships, according to a study by Prudential Corp. Asia.

\n

The Philippines\u2019 average Prudential Relationship Index (PRI) score \u2014 a measure of how satisfied people are with their primary relationships with partners, children, family and friends \u2014 is 79/100 In 2017 against a PRI average score of 71/100 among the nine Asian economies being surveyed.

\n

This means that, on average, people\u2019s primary relationships fulfill 79% of their desired needs. Compared to its peers, the Philippines is tied with Vietnam at second place, only behind Cambodia (86/100).

\n

Rounding up the nine Asian markets in the survey are the following:

\n

Indonesia (75/100)
\nThailand (70/100)
\nMalaysia (68/100)
\nHong Kong (66/100)
\nSingapore (64/100)
\nChina (54/100)

\n

In terms of average relationship scores that people have with their partners, the Philippines scored 75/100, the third highest in the region and was above the 67/100 average score for the nine countries. Put it another way, those in relationships have approximately 75% of their relationship needs provided for by their partners.

\n

\u201cExpressions of love are important in some markets in Asia but not others. People in the Philippines, Indonesia and Malaysia are highly likely to value this, but expressions of love are not as influential in relationships in Cambodia or Hong Kong,\u201d the report read.
\nAlso noted in the study is the Filipinos\u2019 high preference of making their partners laugh: \u201cFilipinos are the most likely to think it important that partners make them laugh (83%) and they are also the most likely in the region to laugh at least once a week with their partners (90%).\u201d

\n

For Shiela May T. Julianda, sociologist at the University of the Philippines: \u201cFilipinos are social beings that culturally and naturally are happy people. Compared to other countries, we have a high tolerance to problems.\u201d

\n

The sociologist professor also noted the Filipinos\u2019 tendency to \u201cbeing a collectivist\u201d and being family-oriented that contributed to this high score of relationship satisfaction.

\n

\u201cIf we’re going to base the article’s result on Abraham Maslow’s hierarchy of needs and use the social exchange framework as basis for our explanation, we can say that Filipinos are fulfilled with their relationships because both their physiological needs, safety and security and love and belongingness needs are all met by their loved ones.\u201d

\n

Ms. Julianda hypothesized that the changes in the economic conditions may have played a role: \u201cWe can say that our economy may be becoming better and that more Filipinos have occupations and that their salaries are higher that they provide their needs…\u201d

\n

On the other hand, she also noted the changing dynamics in relationships given the improving economic conditions and digital literacy: \u201c[I]f we are going to compare our society today than before, hindi na tayo masyado sa [We are not more into] face-to-face interactions. With all the gadgets and applications found in our mobile phones and the internet, we can already build a relationship with a stranger or a relationship out of convenience.\u201d

\n

\u201c[W]ith the development in our technology and other innovations and influence brought by other countries, nagbago na ito [this has changed]\u2026 [S]ome relationships become shallow – one week in love na or one week sila na agad.\u201d

\n

The study also noted that across Asia, technology can be a disruption to relationships with \u201cspending too much time on the phone or computer\u201d being the fourth-highest reason for arguments. The Philippines (37%) have the highest recorded proportion among respondents citing this reason as well as saying that mealtimes would be improved if phones were turned off (90%).

\n

Going forward, most of the respondents believe that their relationships will improve in the future.

\n

In Asia, 56% said that their love life will improve within the next five years. Respondents from Indonesia and Philippines were the most optimistic, with 72% or 7 out of 10 saying that they believe their love life will get better in five years\u2019 time.

\n", "content_text": "Christine Joyce S. Casta\u00f1eda, Senior Researcher\nThe Philippines was in the top three of nine countries in terms of meeting needs and expectations in their relationships, according to a study by Prudential Corp. Asia.\nThe Philippines\u2019 average Prudential Relationship Index (PRI) score \u2014 a measure of how satisfied people are with their primary relationships with partners, children, family and friends \u2014 is 79/100 In 2017 against a PRI average score of 71/100 among the nine Asian economies being surveyed.\nThis means that, on average, people\u2019s primary relationships fulfill 79% of their desired needs. Compared to its peers, the Philippines is tied with Vietnam at second place, only behind Cambodia (86/100).\nRounding up the nine Asian markets in the survey are the following:\nIndonesia (75/100)\nThailand (70/100)\nMalaysia (68/100)\nHong Kong (66/100)\nSingapore (64/100)\nChina (54/100)\nIn terms of average relationship scores that people have with their partners, the Philippines scored 75/100, the third highest in the region and was above the 67/100 average score for the nine countries. Put it another way, those in relationships have approximately 75% of their relationship needs provided for by their partners.\n\u201cExpressions of love are important in some markets in Asia but not others. People in the Philippines, Indonesia and Malaysia are highly likely to value this, but expressions of love are not as influential in relationships in Cambodia or Hong Kong,\u201d the report read.\nAlso noted in the study is the Filipinos\u2019 high preference of making their partners laugh: \u201cFilipinos are the most likely to think it important that partners make them laugh (83%) and they are also the most likely in the region to laugh at least once a week with their partners (90%).\u201d\nFor Shiela May T. Julianda, sociologist at the University of the Philippines: \u201cFilipinos are social beings that culturally and naturally are happy people. Compared to other countries, we have a high tolerance to problems.\u201d\nThe sociologist professor also noted the Filipinos\u2019 tendency to \u201cbeing a collectivist\u201d and being family-oriented that contributed to this high score of relationship satisfaction.\n\u201cIf we’re going to base the article’s result on Abraham Maslow’s hierarchy of needs and use the social exchange framework as basis for our explanation, we can say that Filipinos are fulfilled with their relationships because both their physiological needs, safety and security and love and belongingness needs are all met by their loved ones.\u201d\nMs. Julianda hypothesized that the changes in the economic conditions may have played a role: \u201cWe can say that our economy may be becoming better and that more Filipinos have occupations and that their salaries are higher that they provide their needs…\u201d\nOn the other hand, she also noted the changing dynamics in relationships given the improving economic conditions and digital literacy: \u201c[I]f we are going to compare our society today than before, hindi na tayo masyado sa [We are not more into] face-to-face interactions. With all the gadgets and applications found in our mobile phones and the internet, we can already build a relationship with a stranger or a relationship out of convenience.\u201d\n\u201c[W]ith the development in our technology and other innovations and influence brought by other countries, nagbago na ito [this has changed]\u2026 [S]ome relationships become shallow – one week in love na or one week sila na agad.\u201d\nThe study also noted that across Asia, technology can be a disruption to relationships with \u201cspending too much time on the phone or computer\u201d being the fourth-highest reason for arguments. The Philippines (37%) have the highest recorded proportion among respondents citing this reason as well as saying that mealtimes would be improved if phones were turned off (90%).\nGoing forward, most of the respondents believe that their relationships will improve in the future.\nIn Asia, 56% said that their love life will improve within the next five years. Respondents from Indonesia and Philippines were the most optimistic, with 72% or 7 out of 10 saying that they believe their love life will get better in five years\u2019 time.", "date_published": "2018-02-14T13:33:28+08:00", "date_modified": "2018-02-14T13:33:28+08:00", "authors": [ { "name": "大象传媒", "url": "/author/blexticauldulack/", "avatar": "https://secure.gravatar.com/avatar/1311207d4ac1996cb586666fe3d56418ca9f007d735b74eb19d3fa440df5c8b4?s=512&d=mm&r=g" } ], "author": { "name": "大象传媒", "url": "/author/blexticauldulack/", "avatar": "https://secure.gravatar.com/avatar/1311207d4ac1996cb586666fe3d56418ca9f007d735b74eb19d3fa440df5c8b4?s=512&d=mm&r=g" }, "tags": [ "Prudential", "Prudential Relationship Index", "ranking", "relationship", "Popular Economics", "Research" ] }, { "id": "http://bwiewp.www.bworldonline.com/?p=15789", "url": "/popular-economics/2017/06/28/15789/consumers-give-e-commerce-leg/", "title": "Consumers give e-commerce a leg up", "content_html": "

By Leo Jaymar G. Uy Senior Researcher

\n

CONSUMPTION has been a strong point of the Philippine economy, as household spending makes up 60% of the country\u2019s gross domestic product (GDP). With this, many are looking at new frontiers for growth. This next frontier, many say, can be found in electronic commerce (e-commerce).

\n

\n

Forecasts made in a 2014 report by Ken Research Ltd. show the Philippine e-commerce market growing at a compounded annual growth rate (CAGR) of 101.4% from 2013 through 2018. The online retail market is also seen to grow 189.2% during the same period.

\n

A May 2016 report by Google/Temasek said the country\u2019s e-commerce market is expected to be valued at $9.4 billion by 2025, at a 34% CAGR. In 2015, the e-commerce market was valued at $500 million.

\n

The appeal of e-commerce, which refers to the selling of goods or services by means of exchange through the Internet, is said to be convenience. With a click of a mouse (or a tap on a smartphone), you can obtain the desired good or service without having to worry about shipping costs exceeding the item itself.

\n

Raffy Montemayor, general manager of consumer-to-consumer (C2C) platform OLX Philippines agrees: \u201cIt\u2019s definitely the convenience.\u201d

\n

Mr. Montemayor points to cars and real estate, two of the most popular categories sold on OLX: \u201cBoth usually require on-site inspection, but thanks to listings on our platform with photographs, users save time since they get to see the vehicles or properties through pictures. They eliminate what they don\u2019t find attractive and then allot time to check in person the listings that they truly like.\u201d

\n

E-Commerce is nothing new in the Philippines. Its advent can be traced back to 2000 when electronic marketplaces were introduced to businesses. At the time, however, local firms were reluctant to use the medium, driven by anxiety over the platform\u2019s ability to deliver goods and services, the lack of a legal framework and the possibility of e-commerce firms closing shop.

\n

Fear about the last one is not unfounded as recent years saw episodes of e-commerce shop closures (often without much fanfare). Multiply.com, which was initially a social networking site, shut down in 2013. Two years later, logistics firm LBC Express, Inc. shuttered TheShop.ph, its e-commerce platform after only a year of operations. The latest casualties were Ensogo Philippines and Thai-based Ascend Group\u2019s iTrueMart, both of which closed shop last year.

\n

Notwithstanding these cases, other companies are expanding their reach. Alibaba Group Holding Ltd., the company founded by China\u2019s richest man Jack Ma, acquired Singapore-based Lazada Group SA, the parent company of Lazada Philippines in April last year, marking Alibaba\u2019s foray into Southeast Asia and its biggest overseas investment to date. Lazada set up shop in the Philippines in 2012 and has since dominated the local e-commerce space, with an 85% market share.

\n

Another case is the Ayala Group, which earlier this year, acquired a 49% stake in the owner and operator of Zalora Philippines, the country\u2019s largest online fashion platform. SM Investments Corp. likewise acquired a 30.47% interest in transport solutions provider 2GO Group, Inc.

\n

To accommodate the industry\u2019s growth, the Department of Trade and Industry (DTI) last Feb. 2016 launched the Philippine e-Commerce Roadmap spanning five years to 2020, covering infrastructure, laws, additional investments, data privacy, consumer education and regional integration. The roadmap aims to support small- and medium-enterprises (SMEs), as only 1% of is said to have a working website according to a 2014 finding of Google\u2019s Global Index Study. SMEs comprise 99% of the country\u2019s establishments and employ 62% of the workforce.

\n

The roadmap also aims to bring e-commerce\u2019s contribution to 25% of GDP by 2020, coming from an estimated 10% share in 2015.

\n

\u201c[The growth of e-commerce here] is private sector-led,\u201d said Janette Toral, founding president of the Philippine Internet Commerce Society and site owner of DigitalFilipino.com, an e-commerce advocacy site.

\n

\u201cWhatever we have right now is all thanks to them. Of course, you have to thank the early players that were not afraid to push the market to rethink on how they do e-commerce. With all the developments happening right now, e-commerce in the Philippines has really started to take-off so I\u2019m very optimistic about it.\u201d

\n

OF SMARTPHONES AND MILLENNIALS
\nBesides sound economic fundamentals, e-commerce would also stand to benefit from the Filipinos\u2019 technology-savviness, thus the adoption of e-commerce more likely would be a question of when rather than if.

\n

\u201cFirst and foremost, 95.4% of Filipinos access the internet using mobile phones,\u201d said Georgette Tan, senior vice president of communications at MasterCard for the Asia-Pacific region. \u201cIn the Philippines, those who made a purchase through their mobile phone significantly rose from 34% in 2014 to 53.5% in 2016.\u201d

\n

\u201cMobile banking apps also make it easier to shop and pay for goods online — it is the technology used most often. In comparison, digital wallets, in-browser apps and in-app shopping are significantly lower in terms of usage. However, we see that people are open to using these new mobile technologies in the future,\u201d she added.

\n

Latest data from the International Telecommunication Union point to the number of mobile-cellular subscriptions exceeding the country\u2019s population at 116 subscriptions for every 100 persons in 2015. The country\u2019s internet penetration is likewise high at 58%, above the global average of 50% in a January 2017 report by We Are Social and Hootsuite.

\n

Then there\u2019s the year-on-year increase in internet users, which at 27% is above the global average of 10%. The number of hours spent on the internet per day was tallied at 3 hours and 36 minutes, the eighth highest among the countries surveyed.

\n

Zalora Philippines cofounder and Chief Executive Officer (CEO) Paul Campos III said the Philippines is beginning to catch up with its Asian neighbors: \u201cI could even see us overtake some of our neighbors just based on the number of people online.\u201d

\n

Inanc Balci, Lazada Philippines\u2019 CEO, said that 60% of Lazada\u2019s sales are coming from the mobile ecosystem, both iOS and Android.

\n

\u201cThis is a very important trend especially for the Philippines and the rest of Southeast Asia. I\u2019d say that for emerging markets where GDP per capita is not very high because not everyone can afford a laptop. What we see is that people are leapfrogging the laptop — they become internet users for the first time through their cheap Android mobile phones,\u201d Mr. Balci said.

\n

\u201cThat opened a huge door for everyone to become internet users and potentially e-commerce users,\u201d he added.

\n

The growing use of digital banking apps by young Filipinos also presents a strong point, according to a report by KPMG R.G. Manabat and think tank Institute for Development and Econometric Analysis, Inc.

\n

\u201cThere are signs of a significant shift in consumer behavior with some seeing internet shopping reaching a tipping point, boosted in part by changing demographics as tech-savvy millennials replace baby-boomers as top consumers,\u201d the report read.

\n

The Philippines boasts of a relatively young population with 31.95% belonging to the 0-14 year old cohort. This figure compares to that of its Asian neighbors whose proportion ranges from 27.6% (Indonesia) to as low as 14% (Korea).

\n

The report also noted that there is an opportunity for businesses to improve their market presence through online and smartphone transactions, with 42% of companies polled saying that consumers prefer to shop online.

\n

The increasing exposure to the digital platforms has made possible the entry of ride-hailing apps like Uber and Grab which have managed to grab sizeable market shares within a few years of establishing a beachhead in the Philippines. Financial technology (FinTech) startups that use the Bitcoin cryptocurrency are also cropping up in the Philippines with their services catering to the internet-savvy and overseas Filipino workers, who regularly send remittances to their families.

\n

COD
\nWhile e-commerce was introduced in the Philippines years ago, it was only recently that it started to pick up when companies allowed customers to cash out upon the delivery of their ordered item, to so-called cash-on-delivery (COD) scheme.

\n

This was what made it possible for Lazada to grow its share of the market, a position that the company doesn\u2019t enjoy in other countries where it also operates.

\n

\u201cThe [introduction of COD] led to a significantly high target base for Lazada. Now, we could easily target anyone who has no internet connection and anyone who knows who has internet connection — and that worked really well. Today\u2019s significant majority of our orders are coming from COD,\u201d Lazada\u2019s Mr. Balci said.

\n

With an 85% market share, the company allows its five to six million customers in the Philippines to choose from over 8.4 million available products from big market players to SMEs at any time.

\n

\u201cIt\u2019s [COD] an amazing thing,\u201d Mr. Balci said. \u201cIt\u2019s not really that Filipinos distrust electronic payments, but that electronic payment adoption has been very slow. It\u2019s not because of the people, it\u2019s because of the circumstances.\u201d

\n

The COD model thus has become a go-to scheme for other market players. Shopee, a C2C online marketplace, offered free shipping and COD in April last year, a promo that supposedly increased its seller base and product listings by over 40% and 60%, respectively.

\n

It is no surprise that COD would thrive since 99% of financial transactions are paid either in cash or check, according to studies conducted by the public-private group Better Than Cash Alliance. Data from the Bangko Sentral ng Pilipinas (BSP) recorded the country\u2019s unbanked population and credit card users to be around 70% and 2%, respectively.

\n

\u201cWhen Lazada and Zalora popularized COD a few years back, e-commerce started to grow like crazy because people saw it and thought \u2018I don\u2019t have to take that risk and deposit in a bank account first.\u2019 They can actually pay for it once it arrives in their doorstep,\u201d said Bjorn R. Pardo, founder and CEO of logistics startup Xend.

\n

\u201cCOD is going to be there for the next 5-10 years. There\u2019s nothing you can do about it. It\u2019s great that there are companies like PayMaya and all these kinds of wallets out there, but that is not going to pick up 5-10 years from now. It\u2019s good that they\u2019re staking their claim now and they\u2019re going to be there when it\u2019s ready, but we\u2019re not ready for it yet. It\u2019s cash for now.\u201d

\n

DigitalFilipino\u2019s Ms. Toral agreed that COD as a payment option offers upsides: \u201cIn COD, cash is king because when you look at cash, there is only a fixed fee for payments.\u201d

\n

\u201cSupposed in cash payments, there\u2019s a fixed fee of P25. If the sales payment to be made is P5,000 or P100,000, (the fee) is still P25 unlike in credit cards where it\u2019s 3.5%. So actually, what we need is a more efficient system in processing cash payments.\u201d

\n

Ms. Toral said there is less fraud involved in cash payments due to direct involvement by both the buyer and the seller.

\n

OLX\u2019s Mr. Montemayor agrees: \u201cOLX\u2019s business model as an online classifieds platform supports direct contact between buyers and sellers. Because these transactions happen directly between the two parties outside already of our platform, we highly encourage meetups and COD transactions for the security of both parties\u2026 It allows the buyers to inspect the items they\u2019re buying and the seller gets the payment in full.\u201d

\n

\u201cIt simply eliminates the potential of fraud and there\u2019s also a chance to back out if they\u2019re not happy with the transaction,\u201d he said.

\n

CHALLENGES
\nIt\u2019s not all rosy for the industry, however, as challenges remain in fully realizing its po tential. Two barriers stick out: physical (logistics and payments) and cultural (hesitance to use electronic payments among Filipinos in general.)

\n

\"\"

\n

\u201cThere\u2019s this perception that logistics is the dirty part of e-commerce,\u201d Xend\u2019s Mr. Pardo said. \u201cWell, it is. And you know, being in the service business, it\u2019s hard. It\u2019s much harder than just playing logistics because now, you\u2019re dealing with people who are expecting parcels and are excited to receive parcels. At the same time, these might be first time buyers, so that means they are a little apprehensive if the item ordered hasn\u2019t arrived and they think if they just got scammed.\u201d

\n

Mr. Pardo recounted his early years in the e-commerce logistics business: \u201cWhen we first started offering domestic shipping, the bottleneck that we saw is that no one was helping the SMEs. If the SME wanted to ship something, they would have to go to the couriers based in malls and literally waste two hours of their day. At the same time, it\u2019s very expensive. So at that time, we said e-commerce will never grow if it\u2019s like this. We have got to make it more convenient and affordable.\u201d

\n

Lazada\u2019s Mr. Balci also faced the same ordeal in the early years of the company\u2019s operations in the country: \u201cThe logistics companies back then were doing a fairly okay job in traditional logistics, but e-commerce logistics is really different.\u201d

\n

Mr. Balci would have preferred using third-party firms to service their operations, but that the inadequate services provided by logistics players at the time forced Lazada to create them from scratch. This led to Lazada Express, their in-house logistics firm.

\n

\u201cThe [kind of fulfillment done in e-commerce logistics] was not being done in the Philippines, and the ones who can did not provide good service. So, this makes it difficult for e-commerce companies to provide nationwide service and at the same time, to provide good service overall,\u201d he said.

\n

\u201cIn the beginning, we did it out of survival. Today, we deliver 70% of our orders ourselves in majority of the metro areas even in North and South Luzon, enabling us to deliver faster and cheaper orders and provide better customer experience\u2026\u201d

\n

Zalora likewise had to build its own delivery fleet. \u201cIf we were in the US or in China or anywhere else that has a more developed ecosystem, we would not want to build the courier, we would use what the third-party logistics firms already provide,\u201d Mr. Campos said.

\n

Mark Joseph Panganiban, executive director of Digital Commerce Association of the Philppines (DCOM), said the dependence on COD for business transactions is a mixed bag: \u201cWhat are you going to do if you don\u2019t do COD? You lose much of your transactions. In the Philippines, 90% of transaction is still COD especially the likes of Lazada and Zalora\u2026[T]hat\u2019s good on the part of the customer because they have less risk, they are not that afraid to make a purchase.\u201d

\n

\u201cOn the other hand, it is not necessarily good on the entrepreneur\u2019s side. Based on logistics figures, I have seen return rates as high as 40%… Regardless of whether the customer accepts the item or not, for the logistics company, the service is already tendered. So, who are they going to charge for the delivery that was just facilitated? Generally, it\u2019s the seller and it\u2019s not a good thing.\u201d

\n

Mr. Panganiban said the problem is that Filipinos \u201cfear the unknown.\u201d

\n

\u201cIt\u2019s only until they experience it themselves that they would say \u2018Ah madali\u00a0pala\u2019 (it\u2019s easy after all). Once they found out that somebody they know uses that, then they will be more comfortable,\u201d he said.

\n

Another factor behind low usage rate is the slow internet connection.
\n\u201cFrom what I see now, the resistance is less than before.\u00a0Kung may\u00a0resistance\u00a0man,\u00a0mabagal anginternet\u00a0sa lugar nila\u2026 So, it\u2019s not a resistance, it\u2019s more of a barrier,\u201d DigitalFilipino.com\u2019s Ms. Toral said.

\n

The average speed of fixed internet connections in the Philippines is said to be around 4.2 megabytes per second, which is below the global average of 6.3.

\n

The whole process that started from the \u201cclick-to-buy button to receiving the product in every consumer\u2019s doorstep\u201d is projected to become a multi-billion peso industry by 2020.

\n

Based on the latest e-commerce roadmap, the government expects the industry to contribute 25% to GDP, a feat that is not difficult to achieve if the 100,000 additional e-commerce businesses could be reached. Enough room for new entrants and aspiring e-commerce entrepreneurs.

\n

While online retail is disrupting its brick-and-mortar counterpart, 54.9% of Filipinos still prefer to look at the physical product in-store, according to a research conducted by MasterCard.

\n

De spite Lazada being the current leader in the industry — not just locally, but also in Southeast Asia — the company encourages SMEs to contribute to the growth and promote more competition to tap the full potential of the e-commerce in the Philippines.

\n

The inflection point of online shopping happened two to three years ago in the country, according to Mr. Balci. This also means that the trend is still young and is on an upward slope, as users of the platform would keep on increasing over the years.

\n

\u201cI think it has become a part of people\u2019s lives and what will happen over the next couple of years, more and more millions of people will start using it.\u201d

\n

Department of Trade and Industry Assistant Secretary Arturo P. Boncato, Jr. agrees that the low penetration rate of e-commerce in the Philippines remains a challenge.

\n

\u201cThe amount of our mobile subscribers is considered one of our comparative advantages when it comes to our neighbors. The main challenge here is that we have a low penetration rate when it comes to using e-commerce and for us, it is an indication of the lack of trust. Our challenge then is to make sure that we convert that presence into actually purchasing something using e-commerce,\u201d he said.

\n

Mr. Boncato said Filipinos are accustomed to lining up to pay, adding that even big corporations still pay with their checkbooks for the most part.

\n

\u201cWe can\u2019t change everybody overnight, but we can start with the digital natives, that is, the millennials, because we can convince them to pay taxes through their mobile phones and they will have no issues about it. But when you ask your parents or grandparents, there is no way that you can c onvince them,\u201d he said.

\n

\u201cDarating din tayo doon\u00a0(We\u2019ll get there),\u201d he added.

\n", "content_text": "By Leo Jaymar G. Uy Senior Researcher\nCONSUMPTION has been a strong point of the Philippine economy, as household spending makes up 60% of the country\u2019s gross domestic product (GDP). With this, many are looking at new frontiers for growth. This next frontier, many say, can be found in electronic commerce (e-commerce).\n\nForecasts made in a 2014 report by Ken Research Ltd. show the Philippine e-commerce market growing at a compounded annual growth rate (CAGR) of 101.4% from 2013 through 2018. The online retail market is also seen to grow 189.2% during the same period.\nA May 2016 report by Google/Temasek said the country\u2019s e-commerce market is expected to be valued at $9.4 billion by 2025, at a 34% CAGR. In 2015, the e-commerce market was valued at $500 million.\nThe appeal of e-commerce, which refers to the selling of goods or services by means of exchange through the Internet, is said to be convenience. With a click of a mouse (or a tap on a smartphone), you can obtain the desired good or service without having to worry about shipping costs exceeding the item itself.\nRaffy Montemayor, general manager of consumer-to-consumer (C2C) platform OLX Philippines agrees: \u201cIt\u2019s definitely the convenience.\u201d\nMr. Montemayor points to cars and real estate, two of the most popular categories sold on OLX: \u201cBoth usually require on-site inspection, but thanks to listings on our platform with photographs, users save time since they get to see the vehicles or properties through pictures. They eliminate what they don\u2019t find attractive and then allot time to check in person the listings that they truly like.\u201d\nE-Commerce is nothing new in the Philippines. Its advent can be traced back to 2000 when electronic marketplaces were introduced to businesses. At the time, however, local firms were reluctant to use the medium, driven by anxiety over the platform\u2019s ability to deliver goods and services, the lack of a legal framework and the possibility of e-commerce firms closing shop.\nFear about the last one is not unfounded as recent years saw episodes of e-commerce shop closures (often without much fanfare). Multiply.com, which was initially a social networking site, shut down in 2013. Two years later, logistics firm LBC Express, Inc. shuttered TheShop.ph, its e-commerce platform after only a year of operations. The latest casualties were Ensogo Philippines and Thai-based Ascend Group\u2019s iTrueMart, both of which closed shop last year.\nNotwithstanding these cases, other companies are expanding their reach. Alibaba Group Holding Ltd., the company founded by China\u2019s richest man Jack Ma, acquired Singapore-based Lazada Group SA, the parent company of Lazada Philippines in April last year, marking Alibaba\u2019s foray into Southeast Asia and its biggest overseas investment to date. Lazada set up shop in the Philippines in 2012 and has since dominated the local e-commerce space, with an 85% market share.\nAnother case is the Ayala Group, which earlier this year, acquired a 49% stake in the owner and operator of Zalora Philippines, the country\u2019s largest online fashion platform. SM Investments Corp. likewise acquired a 30.47% interest in transport solutions provider 2GO Group, Inc.\nTo accommodate the industry\u2019s growth, the Department of Trade and Industry (DTI) last Feb. 2016 launched the Philippine e-Commerce Roadmap spanning five years to 2020, covering infrastructure, laws, additional investments, data privacy, consumer education and regional integration. The roadmap aims to support small- and medium-enterprises (SMEs), as only 1% of is said to have a working website according to a 2014 finding of Google\u2019s Global Index Study. SMEs comprise 99% of the country\u2019s establishments and employ 62% of the workforce.\nThe roadmap also aims to bring e-commerce\u2019s contribution to 25% of GDP by 2020, coming from an estimated 10% share in 2015.\n\u201c[The growth of e-commerce here] is private sector-led,\u201d said Janette Toral, founding president of the Philippine Internet Commerce Society and site owner of DigitalFilipino.com, an e-commerce advocacy site.\n\u201cWhatever we have right now is all thanks to them. Of course, you have to thank the early players that were not afraid to push the market to rethink on how they do e-commerce. With all the developments happening right now, e-commerce in the Philippines has really started to take-off so I\u2019m very optimistic about it.\u201d\nOF SMARTPHONES AND MILLENNIALS\nBesides sound economic fundamentals, e-commerce would also stand to benefit from the Filipinos\u2019 technology-savviness, thus the adoption of e-commerce more likely would be a question of when rather than if.\n\u201cFirst and foremost, 95.4% of Filipinos access the internet using mobile phones,\u201d said Georgette Tan, senior vice president of communications at MasterCard for the Asia-Pacific region. \u201cIn the Philippines, those who made a purchase through their mobile phone significantly rose from 34% in 2014 to 53.5% in 2016.\u201d\n\u201cMobile banking apps also make it easier to shop and pay for goods online — it is the technology used most often. In comparison, digital wallets, in-browser apps and in-app shopping are significantly lower in terms of usage. However, we see that people are open to using these new mobile technologies in the future,\u201d she added.\nLatest data from the International Telecommunication Union point to the number of mobile-cellular subscriptions exceeding the country\u2019s population at 116 subscriptions for every 100 persons in 2015. The country\u2019s internet penetration is likewise high at 58%, above the global average of 50% in a January 2017 report by We Are Social and Hootsuite.\nThen there\u2019s the year-on-year increase in internet users, which at 27% is above the global average of 10%. The number of hours spent on the internet per day was tallied at 3 hours and 36 minutes, the eighth highest among the countries surveyed.\nZalora Philippines cofounder and Chief Executive Officer (CEO) Paul Campos III said the Philippines is beginning to catch up with its Asian neighbors: \u201cI could even see us overtake some of our neighbors just based on the number of people online.\u201d\nInanc Balci, Lazada Philippines\u2019 CEO, said that 60% of Lazada\u2019s sales are coming from the mobile ecosystem, both iOS and Android.\n\u201cThis is a very important trend especially for the Philippines and the rest of Southeast Asia. I\u2019d say that for emerging markets where GDP per capita is not very high because not everyone can afford a laptop. What we see is that people are leapfrogging the laptop — they become internet users for the first time through their cheap Android mobile phones,\u201d Mr. Balci said.\n\u201cThat opened a huge door for everyone to become internet users and potentially e-commerce users,\u201d he added.\nThe growing use of digital banking apps by young Filipinos also presents a strong point, according to a report by KPMG R.G. Manabat and think tank Institute for Development and Econometric Analysis, Inc.\n\u201cThere are signs of a significant shift in consumer behavior with some seeing internet shopping reaching a tipping point, boosted in part by changing demographics as tech-savvy millennials replace baby-boomers as top consumers,\u201d the report read.\nThe Philippines boasts of a relatively young population with 31.95% belonging to the 0-14 year old cohort. This figure compares to that of its Asian neighbors whose proportion ranges from 27.6% (Indonesia) to as low as 14% (Korea).\nThe report also noted that there is an opportunity for businesses to improve their market presence through online and smartphone transactions, with 42% of companies polled saying that consumers prefer to shop online.\nThe increasing exposure to the digital platforms has made possible the entry of ride-hailing apps like Uber and Grab which have managed to grab sizeable market shares within a few years of establishing a beachhead in the Philippines. Financial technology (FinTech) startups that use the Bitcoin cryptocurrency are also cropping up in the Philippines with their services catering to the internet-savvy and overseas Filipino workers, who regularly send remittances to their families.\nCOD\nWhile e-commerce was introduced in the Philippines years ago, it was only recently that it started to pick up when companies allowed customers to cash out upon the delivery of their ordered item, to so-called cash-on-delivery (COD) scheme.\nThis was what made it possible for Lazada to grow its share of the market, a position that the company doesn\u2019t enjoy in other countries where it also operates.\n\u201cThe [introduction of COD] led to a significantly high target base for Lazada. Now, we could easily target anyone who has no internet connection and anyone who knows who has internet connection — and that worked really well. Today\u2019s significant majority of our orders are coming from COD,\u201d Lazada\u2019s Mr. Balci said.\nWith an 85% market share, the company allows its five to six million customers in the Philippines to choose from over 8.4 million available products from big market players to SMEs at any time.\n\u201cIt\u2019s [COD] an amazing thing,\u201d Mr. Balci said. \u201cIt\u2019s not really that Filipinos distrust electronic payments, but that electronic payment adoption has been very slow. It\u2019s not because of the people, it\u2019s because of the circumstances.\u201d\nThe COD model thus has become a go-to scheme for other market players. Shopee, a C2C online marketplace, offered free shipping and COD in April last year, a promo that supposedly increased its seller base and product listings by over 40% and 60%, respectively.\nIt is no surprise that COD would thrive since 99% of financial transactions are paid either in cash or check, according to studies conducted by the public-private group Better Than Cash Alliance. Data from the Bangko Sentral ng Pilipinas (BSP) recorded the country\u2019s unbanked population and credit card users to be around 70% and 2%, respectively.\n\u201cWhen Lazada and Zalora popularized COD a few years back, e-commerce started to grow like crazy because people saw it and thought \u2018I don\u2019t have to take that risk and deposit in a bank account first.\u2019 They can actually pay for it once it arrives in their doorstep,\u201d said Bjorn R. Pardo, founder and CEO of logistics startup Xend.\n\u201cCOD is going to be there for the next 5-10 years. There\u2019s nothing you can do about it. It\u2019s great that there are companies like PayMaya and all these kinds of wallets out there, but that is not going to pick up 5-10 years from now. It\u2019s good that they\u2019re staking their claim now and they\u2019re going to be there when it\u2019s ready, but we\u2019re not ready for it yet. It\u2019s cash for now.\u201d\nDigitalFilipino\u2019s Ms. Toral agreed that COD as a payment option offers upsides: \u201cIn COD, cash is king because when you look at cash, there is only a fixed fee for payments.\u201d\n\u201cSupposed in cash payments, there\u2019s a fixed fee of P25. If the sales payment to be made is P5,000 or P100,000, (the fee) is still P25 unlike in credit cards where it\u2019s 3.5%. So actually, what we need is a more efficient system in processing cash payments.\u201d\nMs. Toral said there is less fraud involved in cash payments due to direct involvement by both the buyer and the seller.\nOLX\u2019s Mr. Montemayor agrees: \u201cOLX\u2019s business model as an online classifieds platform supports direct contact between buyers and sellers. Because these transactions happen directly between the two parties outside already of our platform, we highly encourage meetups and COD transactions for the security of both parties\u2026 It allows the buyers to inspect the items they\u2019re buying and the seller gets the payment in full.\u201d\n\u201cIt simply eliminates the potential of fraud and there\u2019s also a chance to back out if they\u2019re not happy with the transaction,\u201d he said.\nCHALLENGES\nIt\u2019s not all rosy for the industry, however, as challenges remain in fully realizing its po tential. Two barriers stick out: physical (logistics and payments) and cultural (hesitance to use electronic payments among Filipinos in general.)\n\n\u201cThere\u2019s this perception that logistics is the dirty part of e-commerce,\u201d Xend\u2019s Mr. Pardo said. \u201cWell, it is. And you know, being in the service business, it\u2019s hard. It\u2019s much harder than just playing logistics because now, you\u2019re dealing with people who are expecting parcels and are excited to receive parcels. At the same time, these might be first time buyers, so that means they are a little apprehensive if the item ordered hasn\u2019t arrived and they think if they just got scammed.\u201d\nMr. Pardo recounted his early years in the e-commerce logistics business: \u201cWhen we first started offering domestic shipping, the bottleneck that we saw is that no one was helping the SMEs. If the SME wanted to ship something, they would have to go to the couriers based in malls and literally waste two hours of their day. At the same time, it\u2019s very expensive. So at that time, we said e-commerce will never grow if it\u2019s like this. We have got to make it more convenient and affordable.\u201d\nLazada\u2019s Mr. Balci also faced the same ordeal in the early years of the company\u2019s operations in the country: \u201cThe logistics companies back then were doing a fairly okay job in traditional logistics, but e-commerce logistics is really different.\u201d\nMr. Balci would have preferred using third-party firms to service their operations, but that the inadequate services provided by logistics players at the time forced Lazada to create them from scratch. This led to Lazada Express, their in-house logistics firm.\n\u201cThe [kind of fulfillment done in e-commerce logistics] was not being done in the Philippines, and the ones who can did not provide good service. So, this makes it difficult for e-commerce companies to provide nationwide service and at the same time, to provide good service overall,\u201d he said.\n\u201cIn the beginning, we did it out of survival. Today, we deliver 70% of our orders ourselves in majority of the metro areas even in North and South Luzon, enabling us to deliver faster and cheaper orders and provide better customer experience\u2026\u201d\nZalora likewise had to build its own delivery fleet. \u201cIf we were in the US or in China or anywhere else that has a more developed ecosystem, we would not want to build the courier, we would use what the third-party logistics firms already provide,\u201d Mr. Campos said.\nMark Joseph Panganiban, executive director of Digital Commerce Association of the Philppines (DCOM), said the dependence on COD for business transactions is a mixed bag: \u201cWhat are you going to do if you don\u2019t do COD? You lose much of your transactions. In the Philippines, 90% of transaction is still COD especially the likes of Lazada and Zalora\u2026[T]hat\u2019s good on the part of the customer because they have less risk, they are not that afraid to make a purchase.\u201d\n\u201cOn the other hand, it is not necessarily good on the entrepreneur\u2019s side. Based on logistics figures, I have seen return rates as high as 40%… Regardless of whether the customer accepts the item or not, for the logistics company, the service is already tendered. So, who are they going to charge for the delivery that was just facilitated? Generally, it\u2019s the seller and it\u2019s not a good thing.\u201d\nMr. Panganiban said the problem is that Filipinos \u201cfear the unknown.\u201d\n\u201cIt\u2019s only until they experience it themselves that they would say \u2018Ah madali\u00a0pala\u2019 (it\u2019s easy after all). Once they found out that somebody they know uses that, then they will be more comfortable,\u201d he said.\nAnother factor behind low usage rate is the slow internet connection.\n\u201cFrom what I see now, the resistance is less than before.\u00a0Kung may\u00a0resistance\u00a0man,\u00a0mabagal anginternet\u00a0sa lugar nila\u2026 So, it\u2019s not a resistance, it\u2019s more of a barrier,\u201d DigitalFilipino.com\u2019s Ms. Toral said.\nThe average speed of fixed internet connections in the Philippines is said to be around 4.2 megabytes per second, which is below the global average of 6.3.\nThe whole process that started from the \u201cclick-to-buy button to receiving the product in every consumer\u2019s doorstep\u201d is projected to become a multi-billion peso industry by 2020.\nBased on the latest e-commerce roadmap, the government expects the industry to contribute 25% to GDP, a feat that is not difficult to achieve if the 100,000 additional e-commerce businesses could be reached. Enough room for new entrants and aspiring e-commerce entrepreneurs.\nWhile online retail is disrupting its brick-and-mortar counterpart, 54.9% of Filipinos still prefer to look at the physical product in-store, according to a research conducted by MasterCard.\nDe spite Lazada being the current leader in the industry — not just locally, but also in Southeast Asia — the company encourages SMEs to contribute to the growth and promote more competition to tap the full potential of the e-commerce in the Philippines.\nThe inflection point of online shopping happened two to three years ago in the country, according to Mr. Balci. This also means that the trend is still young and is on an upward slope, as users of the platform would keep on increasing over the years.\n\u201cI think it has become a part of people\u2019s lives and what will happen over the next couple of years, more and more millions of people will start using it.\u201d\nDepartment of Trade and Industry Assistant Secretary Arturo P. Boncato, Jr. agrees that the low penetration rate of e-commerce in the Philippines remains a challenge.\n\u201cThe amount of our mobile subscribers is considered one of our comparative advantages when it comes to our neighbors. The main challenge here is that we have a low penetration rate when it comes to using e-commerce and for us, it is an indication of the lack of trust. Our challenge then is to make sure that we convert that presence into actually purchasing something using e-commerce,\u201d he said.\nMr. Boncato said Filipinos are accustomed to lining up to pay, adding that even big corporations still pay with their checkbooks for the most part.\n\u201cWe can\u2019t change everybody overnight, but we can start with the digital natives, that is, the millennials, because we can convince them to pay taxes through their mobile phones and they will have no issues about it. But when you ask your parents or grandparents, there is no way that you can c onvince them,\u201d he said.\n\u201cDarating din tayo doon\u00a0(We\u2019ll get there),\u201d he added.", "date_published": "2017-06-28T06:36:39+08:00", "date_modified": "2017-06-28T06:36:39+08:00", "authors": [ { "name": "大象传媒", "url": "/author/blexticauldulack/", "avatar": "https://secure.gravatar.com/avatar/1311207d4ac1996cb586666fe3d56418ca9f007d735b74eb19d3fa440df5c8b4?s=512&d=mm&r=g" } ], "author": { "name": "大象传媒", "url": "/author/blexticauldulack/", "avatar": "https://secure.gravatar.com/avatar/1311207d4ac1996cb586666fe3d56418ca9f007d735b74eb19d3fa440df5c8b4?s=512&d=mm&r=g" }, "tags": [ "Popular Economics", "Research" ] } ] }