The shift of traditional businesses to the digital space and the growing number of online-based businesses that emerged since the outbreak of COVID-19 pandemic has helped accelerate the electronic commerce (e-commerce) industry in the local market, the academe and government observed.
Aside from the existing online-based shopping applications, delivery applications have also started to appear and the presence of online business owners has noticeably increased in social media platforms starting 2020.
Jonathan Dangan, college instructor of international and digital marketing at Palawan State University (PSU), stated that businesses have adapted to the changes brought by COVID-19.
“Ang tingin ko diyan, mas napabilis lang ‘yong ratio pero with or without pandemic, aabot din talaga tayo sa ganito, ‘yon ang tingin namin. Mas napabilis lang kasi nga, ano ba ang gagawin mo ngayon nakakulong ka sa kwarto mo? You have to evolve, hagilap ka ngayon kung paano ka makaka-evolve, paano ka makakasabay, paano mo malalabanan ang boredom mo,” he explained.
“Ang mga tao ay nag-stay sa kanilang mga bahay, that’s the best thing that we can do. Work from home or place our products using the advantages brought by the internet. Iyon ang pinaka-evolution kung bakit nagbo-boom ang digital marketing or whatever you wan to call it,” he added.
Dangan further explained that even before the pandemic, the existence of online shopping applications has already been noticed. As people stayed in their houses in compliance with the health protocols, informal mobile marketing appeared in the forms of live selling and caused a significant change to the market’s behavior.
Subscribing to the services offered by delivery applications was only an option before the pandemic started and some things were required to be done at home. The academe saw this behavior change out of necessity.
“Ang nakikita ko ay out of necessity. Kumbaga ito na ang nangyayari sa atin, wala tayong magagawa kung hindi we have to do at least everything at home to cater to the safety of family members that’s why nag-evolve sociologically pati ‘yong typical Filipino family just to adapt to it,” he said.
The business sector adapted to the changes to survive and followed the sociological movement, he said. Although the traditional businesses were affected in all forms of production such as in labor and capital that prompted their closures.
While pandemic hurt the health sector and global economy, online shopping has noticeably increased since 2020. He added that this could be a psychological factor as some individuals resort to online shopping as a form of coping mechanism with the effect of the pandemic.
“Another thing, ang nakikita ko ay somewhat psychological when it comes to consumer behavior, out of boredom. Kumbaga since may naiipon naman ‘yong iba, hindi makalabas, maka-shopping, magri-resort talaga sa online purchases,” he said.
In a previous story, Lorizza Mae Posadas-Gacott, registered guidance counselor and an officer of the Philippine Mental Health Association Inc. (PMHAI) Palawan Chapter, explained that individuals who are going through stress are looking for immediate relief or satisfaction that sometimes gets from purchasing an item or checking out online stores.
Dangan said people are already looking into the convenience of e-commerce but levelled up during the pandemic due to the need to adapt. Based on his view, COVID-19 could be one of the parameters on the growth of e-commerce, but is incidental, and it is not the only factor that triggered the movement of e-commerce.
“Hindi ko lubusang masabi na COVID ang nag-fuel pero in a way, pwede mo rin siya i-consider as one of the parameters kasi nga we have to sink or swim. You have to swim if you want to progress but if you don’t want to progress and you don’t want to answer the call to protect one another, then chances are you sink,” he said.
Department of Trade and Industry (DTI) Secretary Ramon Lopez said the department’s Business Name Registration System (BNRS) reported a significant increase in the number of online sellers. From 1,700 during the span of January to March 2020, online businesses increased to around 88,000 by year’s end. For the month of January 2021, the registration has hit 93, 318.
“This is a clear indication of Filipino resilience as many of our countrymen adapted to the challenging times,” the DTI stated.
Emma Quillope, division chief of DTI Palawan’s Business Development Division, said that the pandemic also became a way to notice the significance of e-commerce particularly by entrepreneurs even though it has been existing for years.
She, however, said that based on her observation, even with the growth observed in e-commerce, the local market has still a long way to go to completely establish in Palawan.
“Tingin ko malayo-layo pa, kung titingnan sa totoong e-commerce ay malayo-layo pa. Kasi ang e-commerce na tinutukoy natin ay nasa platform na, sa Lazada, Shopee. Although may ilan na rin na pumapasok pero medyo malayo pa,” she said.
Based on the new e-commerce Philippine roadmap 2022, DTI targets an increase to P850 billion in 2021 or 4.3% share to the gross domestic product (GDP) from a baseline of P599 billion that e-commerce contributed to the Philippine economy in 2020 or 3.4% share to the GDP. By 2022, it eyes e-commerce to value at P1.2 trillion in 2022 or 5.5% share to the GDP.
DTI also expressed hopes to increase the number of e-commerce enterprises from 500,000 in 2020 to 750,000 by 2021 and 1 million by 2022.
“In this light, we need to take advantage of how the pandemic has boosted e-commerce in the Philippines, given that people now accept the digital life as the ‘new normal’,” Lopez said during his keynote speech in the virtual launch of the Philippines e-commerce roadmap 2022.
Business opportunity to ordinary Palaweños
DTI said the online market created job opportunities for most individuals particularly those who were displaced from their previous jobs.
According to Key Maduro, the availability of time by staying at home made her decide to start her long-time plan of apparel business which she named as Love, Key. Using an online platform became convenient on her part to immediately sell her products.
“Dati ko na siya gustong gawin pero bago lang nagkaroon ng time. Last year lanng because pandemic started. I started planning it a month after the announcement of lockdown sa buong Pilipinas. Through online platforms ang selling kasi, I think this is the safest and mas madaling way para makabenta,” she said.
She focuses her market on working women who are in their early 20s. Aside from financial gains, it also gave her knowledge of business after she left her job.
“Nakatulong sya sa akin not only financially, but also nakadagdag ng learnings when it comes to business. Especially nitong pagpasok ng year kasi I left my job and focused for a while on my online business, bale dito ako kumukuha ng pang araw-araw ko, at the same time ang dami kong nalalaman when it comes to business world,” she said.
Venturing into the online business and selling apparel and accessories also helped May Joy Vasquez to augment income aside from her earnings in teaching. And while she knows the risk of online selling, she was surprised how her business became even better through digital marketing compared to the period when there was still no quarantine.
“Risky siya because I invested extra money on it. Nagbabakasakali na kumita, which is I think okay naman,” she said.
Digital market is not for all
But even if some businesses have shifted to digital marketing to adapt to changes brought by the pandemic in movement, Dangan said there is still a barrier, and this is if the business owner is not well-versed with the technology.
“Kapag hindi maalam ang isang may-ari ng isang traditional business, there is somehow a high barrier of entry sa online,” he said.
“Usually, kapag medyo matatanda na ‘yong may-ari ng isang traditional business, hindi sila ganoon kabilis mag-subscribe sa technology. They rather stick to the traditional method and sila talaga ang pinaka-hesitant if not somewhat afraid to use technology,” he added.
Aside from the generation gap, he added that not all businesses have the same appeal on a face-to-face as online basis.
“Mas naging open source ang digital marketing, kumbaga kahit informal, kahit hindi registered, mag-facebook live ka lang, mag-sell ka ng relief. Sa sinasabing hindi para sa lahat (digital marketing), oo, generation-wise, hindi talaga para sa lahat. Kasi when you subscribe to digital marketing, you have to have the know-how, you don’t jump into the water right away, you have to test the waters first,” he said.
DTI on the other hand is pushing the Micro, Small, and Medium Enterprises (MSMEs) to go into digital marketing and even these businesses are owned by older generations, it is a good thing that their children are assisting them, Quillope said.
“Maganda nga rito sa MSMEs natin lalo na sa assited natin, ‘yong next generation na nila, ‘yong mga anak na nila ang nagfa-facilitate ng kanilang digital (marketing). Kasi ‘yong mga owner medyo hindi sila (familiar) sa mga bagong technology, iyong mga anak nila ang nagfa-facilitate kasi ang age ng mga anak nila ang mahilig sa socmed,” she said.
Need to increase consumer awareness
Despite the benefits brought by the growth of the online market, Dangan stresses the need to raise the level of consumer awareness for their protection through the help of academe and government.
“Marami pa rin ang naloloko. Sad to say, hindi tayo halos umuusad (level of consumer awareness),” he said.
Even consumers are just recipients of the advantages brought by digital marketing or technology, Dangan believes that they should protect one another.
“Sa mga kasamahan ko na teachers, may naloko rin ng seven stars, so how much more doon sa ordinary citizens na hindi ito napag-aralan? Really, ang laki-laki pa ng kailangan gawin ng government, namin sa academe for consumer education,” he stressed.
Dangan said the College of Business and Accountancy (CBA) in PSU has already done some measures such as extension works to educate the community but due to the pandemic, it was only conducted virtually.