E-commerce comes of age amid pandemic

By Linda B. Bolido, 5 Jul 2021

@InquirerBizUnknown to many, the Philippines pioneered mobile money, adding it to applications for cellular phones.

Angelito Villanueva, chair and founder of FinTech Alliance.ph, executive vice president and chief innovation officer at Rizal Commercial Banking Corp. and chief digital transformation officer for the Yuchengco Group of Companies, said Filipinos were introduced to e-money or e-cash as early as 2001.

Orlando Vea, president and chief executive officer (CEO) of Voyager Innovations and cofounder of Smart, described as “first in the world” and “ahead of its time” the trailblazing SmartMoney, which Villanueva helped develop. Vea’s claims were validated by the Mobile World Congress that declared in 2001 that the Philippines’ groundbreaking digital wallet was “the first mobile wallet in the world.”

But because adoption of the app was slow at first, the Philippine feat was eclipsed by the successful rollout of Kenya’s M-Pesa in 2004.

Devices

Things were steadily picking up for online or electronic commerce (e-commerce) and cashless payments by 2019 but it took the COVID-19 global pandemic last year to get things really hopping.

As Filipinos endured lockdowns and quarantines and avoided face-to-face interactions, both merchants and consumers turned more and more to their digital devices to sell and buy.

At the most recent Inquirer Project Rebound Webinar, panelists Martin Yu, director of Shopee Philippines; John Januszczak, president and CEO of UBX, the financial technology spinoff of Union Bank; and Paolo Azzola, chief operating officer of PayMaya Philippines, all agreed that digital was the future of retail in the country.The webinar’s theme was “Retail Disrupted: How Online Platforms Changed the Way We Shop.” It was hosted by Pam Pastor, Inquirer Lifestyle assistant editor and Dax Lucas, senior reporter for Inquirer Business.

Yu said, because of the pandemic, consumers wanted to do more online. “We had to introduce new services in response to the needs of consumers,” he said. The online shopping platform also spotlighted local sellers. Shopee, he said, helped its sellers improve their online presence and engage more effectively with customers.

While the COVID-19 pandemic was a major crisis, Januszczak said it ushered in the “Golden Age of E-commerce”.

Even micro-, small- and medium enterprises (MSMEs) went online. Digital payments expanded. UBX, he said, set up a digital lending platform to help small entrepreneurs which, before the pandemic, were underserved by financial institutions.

Azzola said, in the past, most Filipinos preferred retail transactions in cash. But cashless transactions had now been adopted even by government agencies. “Digitization has accelerated in the last year,” he said.

Shopee’s menu of products expanded, Yu said, as people spent more time indoors because of health restrictions. Initially, he said, sellers were intimidated by the idea of going online. The pandemic hastened the growth of online selling.Januszczak said, while he did not think brick-and-mortar establishments should close, they should establish their presence online. “If they don’t get online, they will be in trouble,” he said.

The pandemic might have been disruptive in general, but Azzola said there were segments that benefited. Onboarding of MSMEs into digital payment systems, like PayMaya, grew exponentially and payments to government agencies spiked.

The COVID-19 pandemic, Januszczak said, “forced the hands” of retailers to go online. Although still a heavily cash-based economy, the Philippines had since gone a long way, he said. “The Philippines now has a very healthy e-commerce economy.”

Azzola said, “The pandemic brought a lot of companies to look at other (business) ecosystems to thrive. They had to go beyond their (traditional) circles).”

But “online sellers should be able to adapt. They need to change over time,” Yu stressed.

Participants in the country’s economy, Januszczak said, had pivoted. Their mindset had changed. The new buzzword was “coopetition”, cooperation with competitors for the greater good of the economy.

As the Philippine economy inexorably moves toward digitization, Azzola said the biggest challenge was what companies could do online and how the government could regulate the new retail setup.

Yu said Shopee’s goal was to make e-commerce accessible to all and make online shopping available to all. Opportunity and access were also the goals of UBX, Januszczak said, in order to make a positive impact on the economy and advance inclusive prosperity.

Azzola said, with all the digital platforms available and the insights gained, they hoped to inspire more people to go online and take part in e-commerce.