From Where We Sit

Up for success: Banking on e-commerce profitability

Edcel Costales
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Edcel Costales
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Not too keen on seeing Facebook live selling, Instagram paid promotions, and TikTok product reviews? Get used to it. We are living in a digital nation where e-commerce apps and services are trumping traditional advertising and marketing platforms.

In the Philippines alone, e-commerce is expected to further flourish as the government continues to take active steps in digitalizing government processes. The Department of Information and Communications Technology (DICT) continues to ramp up initiatives in accelerating free internet connectivity especially in remote areas, while the DICT’s attached agency, the Cybercrime Investigation and Coordinating Center, is finalizing its roadmap with amendments to the country’s existing National Cybersecurity Plan.

Amidst these developments, a 2022 eMarketer report shows the Philippines ranking high in the list of countries poised to see retail e-commerce sales growth this year, ahead of other countries like India where e-commerce platforms are also booming. E-commerce sales growth is projected to be at 25.9 percent by the end of this year, with a Rakuten Insight showing that the preferred e-commerce platforms of Filipino consumers are Shopee, Lazada, and Zalora. Top products patronized in 2021 were in the categories of beauty, electronics, fashion, furniture, health, and household care.

This came despite a joint study by the World Bank and the National Economic and Development Authority showing that the Philippines has “among the slowest internet services in the world”, a setback that does not seem to deter Filipinos from logging on to their favorite social media sites and opening their e-shopping apps to make quick retail transactions. The onset of the COVID-19 pandemic made online shopping even more alluring and forced more households to make cashless transactions with the help of e-wallet service providers. The convenience offered by these digital modes of shopping and payment has made them more attractive to consumers, making the e-commerce industry thrive even more. In fact, an e-Conomy SEA Report by Google, Temasek, and Bain & Co. shows that e-commerce is projected to be the main driver of the Philippine’s digital economy by 2025.

E-commerce: definition and advantages

E-commerce covers activities that involve buying or selling products and services through online platforms. These transactions are akin to usual business transactions done in physical stores. The difference is that they are done online.

For brick-and-mortar retail stores, the growing popularity of e-commerce services is a looming threat. For businesses intent on boosting sales through e-commerce, it is a significantly profitable investment and business model – and for good reason.

The advantages of banking on e-commerce to drive sales are many. For consumers, it allows them greater ease and comfort when choosing and buying a service or item, done with a few clicks on a laptop or mobile device and minus all the hassle of going through product shelves and getting in long lines to pay. For businesses, particularly start-ups and micro, small and medium-sized enterprises or MSMEs, e-commerce opens new avenues for growth and increased profit. No need for a physical store to rent or own and without store upkeep costs for companies solely focused on doing business online. On top of these, e-commerce provides a more affordable and flexible marketing strategy, as well as client data that can be used for insights and analysis. The Department of Trade and Industry cited in an article that small businesses stand to benefit a lot, as engaging in e-commerce will allow them to make an easy market entry at lower operation costs and the potential for higher revenue.

Making the shift to employ e-commerce is a profitable move for business owners, especially for those engaged in retail. For companies making their first foray in utilizing e-commerce strategies, the task may seem daunting but doable, nonetheless, especially with help from the government. The Department of Trade and Industry launched the E-Commerce Philippines roadmap, which highlights strategies geared towards accelerating e-commerce transactions by developing the country’s digital infrastructure.

If you are interested in developing your company’s e-commerce program, here are a few helpful tips.

Keep an eye on your customers

One of the advantages of using e-commerce platforms is that they come with built-in data analytics programs. These data help a lot in identifying client behavior and purchasing patterns, information that businesses can use to offer products and services patterned to suit the needs of their clients better. A McKinsey article reiterated the role e-commerce plays in reengaging customers and adding value to businesses’ product offerings, a game play that worked well for retailers during the height of the COVID-19 pandemic. In fact, research shows that in 2021, fashion companies that used customer insights to “personalize customer e-commerce experiences” saw their digital sales grow between 30 to 50 percent.

Get updated on latest trends

Investing in e-commerce initiatives requires being updated on current and upcoming trends, easily achieved by teaming up with other companies with established e-commerce programs. This is an imperative rather than an add-on, considering that collaboration and sharing of best practices are part of continuous learning on how to better leverage products and services through e-commerce. A Forbes article adds that this is vital, particularly for small businesses and start-ups taking a leap into offering their products and services in e-commerce platforms.

Invest in cybersecurity

As businesses make a pivot toward digitalization, cybersecurity threats, like denial-of-service attacks and data stealing by use of automated bots, plague their operations and put confidential business data and consumers’ financial and personal information at risk. Ensuring cybersecurity protocols are in place is part of the whole transition to utilizing e-commerce as part of business strategy.

Be mobile-friendly

Mobile shopping is a trend that known retailers and new businesses must take advantage of. And with the variety of apps and sites intent to preserve customer loyalty and patronage, it is best to keep up to date with ways on how to offer improved services. These include finding new ways to boost user experience, done by actions as simple as putting up a website for products and services and ensuring that your business site’s page loads quickly. Creating an app will be a good investment too.

Grow through social media

Another helpful tip: boost your presence in social media. A Hootsuite article highlighted 2021 data showing that more than 80 percent of global internet users aged 16 to 24 have searched a product or service online, and more than 50 percent said they used “social media to research brands”. Social media marketing and e-commerce go hand-in-hand, and what better way to advertise than through social media platforms available and accessible to clientele of different demographics across the globe.

The right social media e-commerce strategy depends largely on your business model and goals. The same Hootsuite article cited that you could use social media to drive traffic to your brand, sell products and services, and gather data on your target market, competitors, and the industry where your business operates.

Banking on traditional marketing strategies that may have worked wonders for your business several years back is clearly not enough to expand your business today. The new principle to abide by that could very well help a business grow is to keep the old and welcome the new. E-commerce strategies, with their variety of benefits, are profitable initiatives that can help organizations grow, established companies and small businesses alike.

 

As published in The Manila Times, dated 16 November 2022

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