The Philippines often comes second by various factors when compared to its peers in Southeast Asia. It’s the second most populous country in the region after Indonesia with 103 million civilians. It’s also the second poorest country after Vietnam and currently has the second smallest ecommerce market at $0.5 billion.

Google & Temasek predicted a rosy future for the Philippines’ ecommerce market to become bigger than that of Singapore, Vietnam and Malaysia by 2025 at $9.7 billion.

However, there are several signs indicating online retail has a long way to go before it picks up in the country:

  • Low ecommerce spending
  • Lack of local ecommerce players
  • Slow internet

Can the Philippines’ ecommerce actually reach its predicted potential? We take a deeper look at some of the reasons why it will be challenging.

First, the good things

The Philippines population is projected to increase by 13% to 116 million by 2025, presenting a bigger market for businesses to sell their products.

Beneficial for ecommerce growth is also the 10 million Filipinos living and working overseas.

Around 3.5 million of them work and live in the US, which has advanced their online shopping behaviour and paved the way for innovative cross-border logistics businesses offering deliveries from the US to the Philippines.

Overseas workers have also facilitated the birth of many digital payments businesses in the country as they send remittances home to their family.

Filipino overseas workers sent home $29.7 billion in 2015.

These money transfers have made the Philippines the top third remittance-receiving country in the world after India and China and spurted the growth of fintech startups providing transfer services, such as Ayannah,, BloomSolutions, using blockchain technology to serve the unbanked.

The innovative payments and logistics solutions work in favor for ecommerce development as online companies are dependent on the ease of payments and the efficiency of logistics networks for speedy delivery to attract customers.

As a result, Lazada, the Southeast Asia’s marketplace for everything, ranks as the 7th most visited website in the Philippines.

No money, no honey?

Despite the mentioned factors, ecommerce has not yet picked up as quickly in the Philippines as it has elsewhere in Southeast Asia. Although 30 million people reported shopping online in 2016, the Philippines has the lowest average annual retail ecommerce spending per person.  

A Filipino spent on average $33 shopping online in 2016.

Even the Vietnamese, who are the poorest of Southeast Asian nations spent 67% more per person shopping online and Malaysians with two times less online shoppers spent twice as much as Filipinos in 2016.

According to Statista, people shopping online in the Philippines are expected to increase by 42% to 48.8 million in the next five years and the average annual spend on ecommerce per person will reach only $48 in 2021.

For comparison, the Vietnamese are expected to spend on average $96 and Malaysians – $129 in 2021.

Where are the local players?

Low online spending per person is not inspiring local businesses to invest in ecommerce  as seen by presence of a few local ecommerce players.

The Philippines is a market where Southeast Asia’s darling Lazada is dominating ecommerce with around 40 million monthly visits.

Local ecommerce players, be it marketplaces or vertical webstores, are not even close to Lazada in terms of number of visitors.

And overall, the competition is rather thin in any category but more brands are working to capture the growing ecommerce potential.

There are a few first movers that are choosing a full ecommerce strategy such as local telecommunications service provider Globe Telecom and retail brand Bench, or global brands Payless ShoeSource and Adidas, and performing quite well. It’s also common for traditional brick-and-mortar retailers such as SM Store to open a shop-in-shop on Lazada to test the ecommerce waters first before investing in a strategy.

Slow and slower

Filipinos are connected to and browsing the second slowest internet connection in the Asia Pacific region. While a speedy internet doesn’t guarantee strong ecommerce behavior, it does impact a good user experience. Who would be willing to browse for a new phone or a pair of shoes if it takes ages to load pictures and product descriptions?

On top of this, the country ranks lowest among its Southeast Asian neighbors in terms of ease of doing business because of slow and complex procedures of starting a business, enforcing contracts and protecting minority investors, which doesn’t help to boost online trade either.

So how to reach its golden potential?

While the large population, familiarity with cross-border deliveries and digital payments offers a great foundation for ecommerce growth, projections of its future market growth greatly vary.

Statista projects the Philippines ecommerce will reach only $2.345 billion in 2021 making the country the smallest of markets in Southeast Asia, while Google and Temasek expect the market to be $9.7 billion by 2025.

The difference will depend on the number of first-movers that kick off the snowball effect.

Recently Ayala Group, one of the largest conglomerates in the country, acquired a 49% stake in online fashion retailer Zalora Philippines. The group hopes its footprint in banking, real estate and telecommunications will generate synergies throughout the ecommerce value chain.

If the takeover proves successful, it could inspire others to follow and contribute to ecommerce growth.

To increase ecommerce growth in the country, there are several things needed to be done. Some of the issues are up to the Philippines government, such as increasing the internet speed by breaking the existing telecommunications market duopoly and opening it up to competition or easing the company registration process.

There are few things businesses themselves can also do to add to the growth:

  1. Invest in market education to explain how ecommerce works and provides convenience
  2. Training workshops for small and medium sized sellers, as well as larger traditional players can nudge more businesses to explore different channels for sales
  3. Improving security of their sites and adding secure payment methods to build trust   between businesses and consumers concerned about fraud
  4. Attract more customers online by selling ‘lifestyle’ services, insurance, etc.

The collaborative effort in the entire ecosystem between brands, retailers, service providers, logistics players, marketing agencies, consumers, etc. will help take the Philippines ecommerce market to the billions.

By: Aija Krutaine

Here’s what you need to know today.

1. Foursquare is launching an analytics platform to help retailers understand foot traffic

Foursquare predicted that Chipotle same-store sales would fall 29%  after the Mexican chain was hit with E. coli outbreaks. The actual decline announced by Chipotle ended up being a spot-on 30%.

These analytics can be very valuable to retailers, allowing them to better understand customers’ habits as well as predict store traffic.

From its accuracy in predicting Chitpole, came  the idea that Foursquare should launch a full time analytics app. The company has launched “Foursquare Analytics”, a foot-traffic dashboard for brands and retailers. The platform is available for retailers with any number of stores, no matter how small.

Retailers will be able to use the dashboard to see foot-traffic data across metrics like gender, age and new versus returning customers — on a national or citywide scale.

Read the rest of the story here.


2. Adidas steps away from TV advertising as it targets $4 billion growth

Adidas is leaving behind TV advertising as it seeks to quadruple its ecommerce revenues by 2020, according to Kasper Rorsted, CEO of Adidas.

Rorsted has placed increased digital retail sales at the center of his overhaul strategy, aiming to grow revenues from $1.06 billion in 2016 to $4.25 billion by 2020.

The firm also announced last week that it is investing heavily in the digitization process, including 3-D printing and smart manufacturing methods.

Read the rest of the story here.


3. In one month, Thailand saw the closures of 67 banks and non-bank branches

ฺBank of Thailand has revealed the multiple closures of banks and non-banks, rounding up to 67 in February alone. 36 banks closed down, and 31 non-banks, which refers to financial institutions that provide limited banking services, also closed down.

Kasikorn Bank saw the most closures, with 17 branches shut down, and Thanachart Bank with 16. Most of the closures were n Bangkok, and represents a global trend of declining needs for banking services. Does this mean that digital banking will be given more room to grow?

Read the rest of the story here.


It’s another beautiful day and here’ s what you need to know.

1. Alibaba partners with one of China’s largest retailers Bailian

Alibaba has teamed up with one of China’s largest retailers, Shanghai-based Bailian Group to explore new forms of retail opportunities across each other’s ecosystem.

Alibaba’s planning to help upgrade some of Bailian’s 4,700 stores across the country integrating everything from customer relations to payment and logistics, reports Bloomberg.

“Our partnership with Bailian is an important milestone in the evolution of Chinese retail, where the distinction between physical and virtual commerce is becoming obsolete,” Daniel Zhang, Alibaba’s chief executive officer.

Read the rest of the story here.


2. Indonesia is among Twitter’s top five user markets worldwide

The Asia-Pacific region is a key growth engine for Twitter with Japan, Indonesia and India being among top five user markets worldwide.

It [Asia-Pacific region] is our largest and fastest-growing region by users and revenue, says Twitter APAC VP Aliza Knox.

One of the platforms most engaging ad formats is video and it’s growth in APAC outpaced the world over the past six month.

Read the full interview Aliza Knox had with Campaign-Asia here.


3. Bangkok-based angel investors lo launch own venture fund

Shift Ventures, Bangkok-based angel investment platform, is raising at least $10 millions to launch a venture capital fund.

In November 2016, Shift Ventures launched the 1000x Club as a matching platform between individual investors and startup companies. Investors would commit at least $1 million and they would have the right to choose the startups to invest.

Yet, with the new venture capital fund the idea is that investors would put their money in and Shift Ventures would manage it choosing which startups to invest.

Read the rest of the story here.


4. Community Chatter: Voice First systems may hurt Google’s search dominance

Google has dominated the search on the web and built a winning business model of pay-per-click based on its supremacy. But will it be able to keep its positions also in the future?

Brian Roemmele argues that the concept of search has shifted since Google started in 1998 and the future lies in the Voice First search which combines general search with task completion. Already now Voice First devices like Amazon’s Alexa answer simple questions that Google used to do.

Read on his reflections here.

Welcome back from the weekend. Here’s what you need to know.

1. Drone delivery startup Flirtey raised $16 million

What has Flirtey done? Last year, Flirtey generated a buzz in food and retail when its unmanned aerial vehicles began delivering Slurpees from 7/11 to thirsty denizens of Nevada. The startup has also flown pizzas to Dominos customers in New Zealand.

Who did they raise money from? VC’s are bullish on drone related tech and services, 95 drone tech companies raised equity funding rounds of at least $500,000 in 2016.

Flirtey’s Series A round was led by the company’s seed investors, Menlo Ventures and Qualcomm Ventures.

What will the funding be used for? Run more deliveries for its existing clients, and to get in front of new potential customers in retail in the US, New Zealand and later, in Japan.

Read the rest of the story here.


2. Malaysia’s RHL Ventures invests in Beyonce backed Sidestep

Malaysia-based venture capital firm RHL Ventures has invested an undisclosed amount in US-based technology startup Sidestep Technologies Inc along with other A list co-investors in Hollywood.

What is Sidestep? Sidestep is a mobile commerce application with the slogan “Skip the Line” and creates a platform that allows their users to skip long queues during live music events when buying merchandise and other exclusive items.

What is RHL aiming to do now? Expand their investments further into Southeast Asia, meaning that Sidestep is their first foray into the west.

Read the rest of the story here.


3. Recommended Reading: Retailers turn to Silicon Valley to attract customers

What’s the secret? Personalization “is the Holy Grail,” says Salesforce Commerce Cloud Chief Executive Jeff Barnett, who works with brands such as L’Oreal and Under Armour.

Amazon: Deep-pocketed Amazon has been investing in technologies like these for years, aiming to make it easy to find items and click buy. Tech providers are filling that gap for other traditional retailers that don’t necessarily have the means to do the same.

Nordstorm: The retailer is now piloting in-store beacon technology that will direct shoppers to express checkout lines or alert them when a fitting room opens up via an app on their phone with Bluetooth turned on.

 Read the rest of the story here.

Indonesia’s groceries market is plentiful but fragmented. While traditional supermarkets still reign, wet markets and independent grocery stores are gradually being replaced by modern retail chains and hypermarkets, a superstore that combines a supermarket with a department store or moving to ecommerce.

With a population of more than 258 million and an emerging middle class with surging purchasing power, hypermarkets, supermarkets and online players are working hard to capture the Indonesian potential.

How will they compete for the attention of shoppers? Data. Consumer insights are valuable to  retailers and marketers because it provides them a peek into the population’s purchase patterns and product preferences, which allows implementation of successful marketing strategies.

Startup from Indonesia Snapcart aims to do exactly this for their clients. The app offers shoppers cashback and rewards in return for photos of their offline shopping receipts. Data from the receipt is then collected by Snapcart, providing a window into the shopping behavior of Indonesians, Southeast Asia’s largest market.

Snapcart has shared exclusive data with ecommerceIQ to reveal what consumers are buying on a monthly basis at the country’s top five offline grocery stores: Alfamart, Carrefour, Hypermart, Indomaret and Super Indo.

By understanding offline retail trends, retailers can adjust sales campaigns or push out creative marketing strategies to make ecommerce more attractive to shoppers. What do we mean? Here’s how marketers can improve their online marketing tactics through Snapcart offline data:


Bundling refers to the grouping of products to maximize sales and often an effective strategy used by marketers. By selling complementary products together, it incentivizes shoppers to make a larger purchase at one time to save money and time.

Fast food companies such as McDonald’s and Burger King have seen a significant rise in sales due to the introduction of combo deals. Approximately 35% of customer visits to these chains have been to purchase a ‘meal’. Starbucks also cashes in on the bundle deal, offering a customizable $8 ‘power lunch’ that combines a sandwich, popcorn, fruit bar and a bottle of water.

However, there’s a catch. If a retailer is looking to purely sell through bundling strategy, it may backfire. Researchers from Carnegie Mellon University found that:

Companies profited best when the bundle strategy was coupled with an option to buy each piece individually.

Looking at customer data from Alfamart, baby diapers, cookies, fresh milk and cooking oil rank in the top 10 categories consistently every month.  It would be simple for the retailer to bundle fresh milk and cookies together or formula milk and diapers together to boost the sale of both category items. (see fig.1)


Bundling is also used to sell less popular products. For example, cooking oil was a best seller every month at Super Indo and could be paired with an underperforming frozen package food at a promotion, to nudge shoppers with their grocery choices.

Other data also shows that Indonesians love to snack. Online retailers could offer shoppers the option to customize a snack basket online and increase basket size.  

Subscription Model

At Carrefour, instant noodles outperform every other product category each month (see chart). If consumers are purchasing large amounts of instant noodles regularly, Carrefour could introduce a subscription model.

[show-rjqc id=”61″]


For example, online shoppers would be able to order a customized instant noodle box, with variations in both brands and flavors, to be delivered to their homes once a month. Global brands in Southeast Asia such as NESCAFE are already adopting a subscription model strategy for everyday necessities people buy regularly such as coffee. 

Another startup from the US called Love with Food is expanding globally with a subscription-based service that sends consumers a box of all-natural, organic, and gluten-free snacks. Everything in the box comes from smaller food brands that want to get their product in front of customers.

Supermarkets lacking an online presence can create a simple popshop that will allow shoppers to sign up to have instant noodles or diapers in bulk delivered monthly to their homes.

Special Sales

Both the supermarket and distributor have the ability to push out a sale. But a sales strategy isn’t only about lowering the price of a product, it should effectively increase sales.


A discount strategy should be used sparingly, and is effective only when a retailer awards loyal customers or happens occasionally.

Adjust pricing to increase short term sales or to boost impending dead stock to increase inventory turnover. This also means that as a retailer, you have a chance at negotiating a good deal with your product supplier as you will have increase in stock order.

For some grocery stores, they tend to offer discounts just before closing time, so discounts usually begin around 7pm-8pm.


The ‘buy one get one free’ strategy is arguably one of the most effective psychological pricing strategies that is used with shoppers. Consumers are typically drawn to the word ‘free’, which makes them buy more than they initially wanted but a lot of doubt surrounds this model.

British supermarkets such as Sainsbury’s and Tesco have started to phase out BOGOF deals, following the release of a report highlighting how it misleads shoppers.

Retailers actually increase the price of the product customers think they’re getting a deal on. Instead of BOGOF, a ‘buy 5 get 2 free’ strategy seems to be more effective because the price isn’t deliberately pushed up as high for the sake of luring customers. For retailers that want to adopt this strategy, choose to promote everyday items such as shampoo or cleaning detergent.

The future of groceries

The data collected from Indonesian shoppers can enhance marketing campaigns both online and offline for retailers. As grocery retailing in Southeast Asia begins to move online, chains without a digital strategy such as Carrefour and Super Indo should consider transitioning to ecommerce.

There is still potential in the country for disruption as 69% of surveyed online shoppers are millennials, which means an upcoming generation of shoppers will be accustomed to using various online channels. Retailers should be ready to capture this audience by using offline customer behavior data they already possess to align their digital strategies and effectively enhance sales across channels.

BY anutra chatikavanij

Here’s today’s key headlines to start your day.

1. PayPal ramps up mobile payments business

Since spinning off from eBay last year, the company has doubled down on its mobile business, focusing on its Braintree and Venmo brands.Venmo has recently begun working with businesses, in an effort to monetize the service. Read the rest of the story here.


2. eBay is testing a Facebook Messenger chatbot

The chatbot is powered by artificial intelligence (AI) that gathers information from questions it asks and users’ Facebook profiles. ShopBot then uses those details to help customers find more relevant items. Read the rest of the story here.


3. Can Chinese ecommerce companies save retailers?

A recent report in Tech in Asia details why up to 1/3 of shopping malls in China as well as thousands of other retailers will close their doors, in large part due to online shopping. Read the rest of the story here