Uneven dev’t marks online retail space

IN A COUNTRY where social media thrives, mobile ownership is widespread and consumer spending robust, you would think that the Philippines has the makings of an online retail mecca.

The potential for online retail is huge, especially in urban areas where household spending is highest, as gridlock offers consumers the prospect of having to shop without the hassle of wading through the traffic, both on the streets and in-store.

The online marketplace also promises unlimited access to consumers at a minimal cost, as it operates 24/7 less the expense of having to pay overtime to an in-store sales force — something the traditional brickand-mortar stores can only dream of.

In an industry where success is measured in terms of who provides quality and fast delivery of products, online retailers must carefully manage their supply chain to maximize efficiency and turn a profit.

But with its inadequate infrastructure, the country’s budding online retail business appears like something grafted onto the local scene, shorn of the requisites for fastcycle transactions seen in mature markets.

The uneven development of online retail in the Philippines is evident in the slow Internet speeds, patchy payment channel and the spotty performance of merchandise delivery, creating opportunities for the enterprising who want to latch onto the online bandwagon. The local online retail ecosystem ( see

diagram) therefore mimics the unevenness seen in other developing markets, with the key players burdened by certain aspects of the supply chain that their peers in more mature markets take for granted. In response, industry players try to plug the gaps in the supply chain to make transactions seamless.