Allison*, 27, has a folder on her phone which she opens whenever she needs some retail therapy or when she’s bored. She calls it her “sin folder.”
It’s complete with all the e-commerce platforms present in the Philippines as well as the mobile applications of several retailers and brands. And since more businesses are strengthening their online presence while the country’s in quarantine, her “sin folder” keeps getting bigger.
“I know having the option to easily buy anything you want can hurt you financially if you’re not mindful about your purchases,” of which Allison admits to be guilty “sometimes.”
“But I think,” she continues, “it’s a really great thing that shopping for clothes, accessories, food, groceries, and even furniture can be conveniently done online, especially when many establishments were closed to customers.”
The evolution of online shopping
Online shopping is not the child of the ongoing pandemic. It has been around for decades. Several accounts say it was an invention of English innovator and entrepreneur Michael Aldrich in 1979, when he connected a modified television to a real-time transaction processing computer via a domestic phone line.
But it was not until the growth and development of the Internet as a secure shopping channel in the early ‘90s that online shopping was developed to what we know today (Amazon launched its online shopping site, Amazon.com in 1995, while eBay was introduced in the same year). The evolution has been continuous since—from Michael’s modified TV to Allison’s mobile phone.
Big chains and small brands were quick to take advantage of the Internet as a wide-reaching retail channel. Interactive web pages that offer a seamless e-commerce experience, from browsing to checkout, allow customers to shop anytime, anywhere.
Retail apps then entered the field, driving mobile sales and offering an interactive way to bring the physical shopping experience to the digital sphere.
E-commerce platforms such as Galleon.ph, Carousell, Zalora, Shopee, and Lazada, meanwhile, serve as an online department store or mall, either specialized (e.g. fashion) or diversified. They enable big brands and small retailers to sell their products to the site’s visitors—much like how businesses rent a space in malls.
Social media services such as Facebook and Instagram—initially used as a marketing tools by businesses to build and promote their brands and interact with customers—have also become a marketplace, where the sale of products and services happens on the sites.
The item is posted and promoted on Facebook or Instagram, and the buyer can directly send the seller a message, place an order, and pay for the item depending on which mode is available. The emergence of sellers on both sites has led to the creation of Facebook Marketplace, Facebook Shops, and Instagram Shop.
Inclusive retail spaces
Business-to-consumer e-commerce platforms and social media have both made it easier for mom-and-pops with little to no budget for marketing to sell goods online. All aspiring online sellers need is a camera, phone or computer, an account, and Internet connection to sell their products and connect with customers.
Seeing an opportunity in the huge demand for vitamins and supplements last year, Elijah Lazaro decided to buy five boxes of multivitamins from a local distributor and signed up on Shopee and Lazada. “I had time to focus on it because my small business, considered non-essential, was ordered to close,” he relates.
Although he started a bit late, making his first sale on Shopee in July and on Lazada in August, his target customers found him on both platforms. From then, he increased his sales by offering good quality and authentic products that are packed safely, providing good customer service (responding to every query), and shipping early.
“I had no budget to offer promos or discounts to attract customers, so I had to build a good reputation, making sure that they get the product they paid for and that it arrives to their doorsteps in good condition,” shares Lazaro.
Although a percentage of his revenue goes to the platforms’ transaction fees, he says the shipping convenience and the protection for both sellers and buyers they provide “let me conduct my business easily especially when I had no other source of income.”
The pandemic has indeed contributed to the growth of e-commerce platforms. In his yearend report, Lazada Philippines chief executive officer Ray Alimurung said more sellers and brands joined in 2020 compared to the previous year.
“Lazada saw a 2x growth of sellers on-boarded year-on-year on the platform. The platform now has 4,000 local and international brands available on LazMall and 100,000 active sellers monthly,” he said in a virtual press conference in December.
Social media giants Facebook and Instagram likewise enable independent sellers to sell products or offer services. During the early days of the pandemic, when many establishments were closed, home bakers, food sellers, and those looking to sell a few items to earn extra income took advantage of social media.
Cami* launched her online thrift shop Muli on Instagram in July 2019, but it was during the first few months of the quarantine that she hit record sales, “mainly because,” she believes, “everyone was stuck at home and was immersed in social media.”
“The pandemic favored online businesses and all businesses that are anchored on social media,” opines Cami. “The lockdown favored Muli in terms of exposure but sourcing products has become a challenge because of the closing of some establishments.”
However, exposure, which social media affords its users, Cami says “does not always equate to sales.” She adds, “The pieces still have to be of quality.”
Users of the photo and video sharing social networking service have innovated ways using the features already available on the site to increase exposure and grow their following.
“When I entered business on Instagram, I was actually amazed how the community has created very efficient techniques to grow following and, eventually, sales. Some examples are Story for Story (SFS) and grow-together groups which host giveaways. Others do Instagram promotion or advertisement, influencer marketing, TikTok, etc.,” shares Cami.
Seeing the growth of online shopping on their platforms, Mark Zuckerberg in May 2020 introduced Facebook Shops to “make it easy for businesses to set up a single store for customers to access on both Facebook and Instagram.” The feature was first launched in the US. Facebook automatically sets up the shop once the seller has already set up their product catalog.
Instagram Shopping maximizes the “70 percent of shopping enthusiasts [who] turn to Instagram for products discovery.” It lets customers shop the photos or videos “no matter where they are in the app.” In addition to in-app shopping feature, it also allows businesses to highlight the products from their catalog in their Stories or feed.
Live selling on Facebook and Instagram is another way sellers make a sale online.
From the mall to your home
According to United Nations Conference on Trade and Development (UNCTAD) secretary general Mukhisa Kituyi, “the pandemic has accelerated the shift towards a more digital world,” triggering changes in the online shopping behaviors of consumers.
UNCTAD and NetComm Suisse eCommerce Association’s survey revealed a 6- to 10-percent increase in online purchases across most product categories, albeit spending declined due to the pandemic, with travel and tourism taking the brunt at 75 percent. In the Philippines, tourism spending plummeted 72 percent in the first seven months of 2020.
The global health crisis has not only accelerated the shift to digital, but has also changed the retail landscape. The latest data from McKinsey and Company show that consumer behaviors adopted during the pandemic are seen to persist post-COVID, with 40 percent of those surveyed planning to spend online and 64 percent not planning to resume “normal” out-of-home activities.
Brick-and-mortars, especially huge chains, are keeping up with the needs and wants of consumers in this digitally driven time.
Department store giant The SM Store, for instance, has strengthened its online presence and introduced its Call to Deliver service that lets customers get in touch with a personal shopper who will look for the product/s they’re looking for in the store they’ve chosen, and arrange payment and delivery for them. The personal shopper service, which spawned other variations, is also available in other SM-operated specialty stores.
Rustan’s likewise offers a personal shopper service through which orders can be delivered or picked up at designated locations. Ayala Malls, meanwhile, launched “a digital and mall companion” app called Zing whose features cover both online and offline shopping.
*Names have been changed.
