As an industry that connects the country and levels the playing field, e-commerce empowers businesses to build their direct-to-consumer platform, especially MSMEs and start-ups. This democratization has resulted in the doubling of the e-commerce market last year and an expected market growth to US$24 billion (PHP1.2 trillion), or 5.5% of GDP, by 2022.
To help entrepreneurs get ahead of the curve and set them up for success, LOCAD CEO and co-founder Constantin Robertz revealed important trends in their seminal whitepaper Key E-Commerce Trends of 2022, which was discussed in the digital event “E-Commerce Trends 2022: What Online Entrepreneurs Need to Know” last April 26.
For example, customer expectations are going through the roof with more money than ever before being spent online and direct-to-consumer (D2C) presence in ASEAN consistently growing. Robertz gave a few important factors that businesses going into e-commerce should look at to draw in these customers.
“We are looking for four things. It starts with a great product and a great price. And then it’s about making people know about your product. And the third one is the customer experience, end-to-end. Then the back-end work wherein you’re doing all these things. That is what e-commerce is,” he shared.
He added that e-commerce is vital to SMEs by freeing them to focus on their core offerings: “As a business, you always have to ask yourself what it is that really drives value to the core of my business? Because as entrepreneurs, as much as we work hard, the day only has 24 hours and the week only has seven days. How are you going to use that limited amount of time?”
As an e-commerce enabler, LOCAD allows entrepreneurs to allocate their time to marketing and pursuing growth opportunities.
“Delivery can be a make or break for a business in this country. Despite the product being really good, if the delivery is horrible, it becomes a 1-star rating,” says Manila Athletica CEO Aencille Santos.
Opportunity for all
Meanwhile, the Department of Trade and Industry (DTI) – Philippine Trade and Training Center (PTTC)’s Executive Director Nelly Dillera laid down the need to tech up the MSMEs in the country while creating a secure and credible e-commerce ecosystem that they can use with full confidence.
“The holy grail of e-commerce is to trade beyond traditional borders, outside of the regular domain, starting locally, then moving nationally, regionally, and globally. These movements serve as the ultimate test of retail, digital, or online,” Dillera said.
One idea that came out of the event is that becoming the next e-commerce superstar is possible for any entrepreneur. It’s the ideal arena for the side hustlers who are building their business online and those who are now growing sizable SME businesses that generate employment and significant sales all the way up to their biggest brand reach.
The government’s support undoubtedly plays a significant role in supporting the growth of MSMEs.
“We’ve been fortunate to have been in partnership with government agencies such as DTI-PTTC in educating small business owners. We believe that continuing with these partnerships, webinars, and capacity-building projects, together with the private sector, will be helpful for MSMEs to grow even further. Ultimately, we can grow individually, when we grow together,” Robertz said.
Price of peace of mind
One of the greatest challenges for businesses this 2022 is acquiring and keeping customers. With 42% of consumers saying that they switch between e-commerce websites, consumers also consider better product availability and faster delivery time, other than pricing, as a determining factor in their loyalty to a brand.
In fact, according to Robertz, among the six key e-commerce trends of 2022, delivering exceptional customer experience to acquiring and keeping customers is definitely a low-hanging fruit for many MSMEs to boost their operations.
“By ensuring better product availability and faster delivery, an e-commerce business, no matter how small, can become a preferred shopping destination for customers,” he added.
E-commerce enabler Etaily CEO and co-founder Alexander Friedhoff pointed out, “It’s all about meeting and exceeding the customer expectations, and authentically engaging with customers where they are.”
Nuprene Brand Manager James Fernando added the importance of fulfillment in meeting customer expectations to fuel growth, “Fulfillment if not done well, could definitely be a really difficult situation for any business — whether it’s a big or a small one. For small businesses, a good experience in terms of ordering online results in repeat purchases, and if you don’t have repeat purchases, your customer acquisition cost goes up.”
In this highly competitive sector with demanding customers who ask for nothing but the best, a brand can stand out by positioning online shopping as a “full experience,” says Santos.
“From the time that you log in to your app, to clicking, browsing the products, checking out, and delivery, up to the Kuya driver coming to your house and delivering the parcel — that entire thing is worth reviewing by the customer,” she said.
She cites as an example the reviews on major online shopping sites that are peppered with customers lauding the courier or the rider who delivered their orders.
The surge of new players, discerning consumers, and the ubiquity of online shopping indicate proves the Philippines is primed for an online financial revolution. To become a globally-competitive economy, SMEs can offer customers their unique services and products, complemented by e-commerce capabilities that they do not have to build on their own.
As Robertz said, “It is very important that each of us entrepreneurs focus our time and attention on what moves a needle for our business. And to find partners, platforms and support for the areas that we don’t really necessarily need to focus on.”