Lazada, other foreign companies, dominate Philippine e-commerce battle
The majority of e-commerce companies in the Philippine’s are local, but they struggle to compete with foreign brands
From small and medium enterprises (SMEs) to giant corporations, the Philippines’ retail sector is rapidly shifting to e-commerce to broaden their consumer base despite the country’s famous ‘mall culture’.
The Philippine e-commerce has the lowest sales-share for e-commerce sales share in Southeast Asia, but it is showing potential with its growing internet and smartphone penetration rate, a rising middle class and young population.
According to joint research from Google and Temasek Holdings, the Philippines’ e-commerce market share will reach 11.05 per cent of Southeast Asia’s projected digital economy in 2025.
As the Philippine retail industry continue to harness the power of e-commerce, iPrice Group mapped Philippines’ top retail e-commerce online reach by analysing website traffic through SimilarWeb, Google application downloads and their respective Facebook, Twitter and Instagram followers.
Our analysis showed that 83 percent of the top 48 e-commerce are local players while 89 percent have more Facebook followers and less website traffic. Overall, Lazada is the country’s leading retail e-commerce in terms of website traffic followed by Zalora, Shopee, eBay while BeautyMNL tops local e-commerce.
Philippines’ Most Popular Retail E-commerce
According to SimilarWeb’s Q2 average monthly traffic, Lazada is the country’s most visited e-commerce and by far the only retail e-commerce to amass more than 60 million monthly average visitors, surpassing Zalora, Shopee, and eBay by almost 30-fold.
Despite the entry of Amazon in SEA through Singapore last July, Alibaba-backed Lazada remains confident because of its market-specific knowledge in the region.
In the Philippine market, Lazada’s strategy should remain the top brand in the near future. Its assortment of products and logistics infrastructure gives it a serious local advantage, says Inanc Balci, Lazada Philippines CEO.
Last October 11, the Taobao Collection [whereby Alibaba products get sold through Lazada] went live in the Philippines following its launch in Indonesia.
The Philippines two largest retail conglomerates, Ayala Group and JG Summit acquired, Zalora Philippines and Shopee Philippines, the second and third most visited e-commerce sites on the list.
Ayala Group, owner of Ayala Malls, holds a controlling stake of 49-percent in Zalora Philippines, paving Ayala Malls’ partner stores leverage to e-commerce through Zalora platform. Zalora on the other hand, gained an access to Ayala’s technology for digital payments through Globe GCash.
Meanwhile, the Gokongwei-led conglomerate, JG Summit acquired a significant stake in Shopee Philippines, a Singapore-based e-commerce company. The majority of Shopee’s recent fundings will be leveraged in the growth of its e-commerce platform especially for its key markets.
Established in 2015, Shopee is the youngest e-commerce on the list but so far has amassed over two million sellers across SEA due to its free product listing and shipping. Shopee easily is the fourth most downloaded application on the list for its peer-to-peer feature. In terms of application downloads, Ebay leads the top retail e-commerce list with a whopping 500 million user.
Established in 2014, Beauty MNL is the most visited local e-commerce in the top 10. Unlike its competition Sephora, Beauty MNL has its own beauty and skincare magazine called Bloom, which publishes localised content daily. According to Digital Marketing Philippines, the most effective channels in digital marketing are social media ads, social media and content marketing.
“Companies and brands who want to succeed in social media marketing should understand that one of its critical component is content”, says Shayne Garcia, Managing Director of iProspect.
Less monthly visits, more social media followers
While website traffic is the key determining factor in the top retail e-commerce list, social media also played a crucial role in the growth of the country’s top e-commerce. 18 percent of the 40 local players initially started on Facebook and Instagram.
Social commerce, or sales driven by social media, is expected to increase in Southeast Asia over the coming years even though it was only 30 per cent of the total online sales in 2016.
The top five e-commerce companies on the list were Lazada, Zalora, Shopee, Ebay and Beauty Manila, who have have a million-monthly average traffic each. Goods, Galleon, Takatack, Sephora and Kimstore only have around 200,000 to 300,000 monthly average traffic.
However, in terms of Facebook followers the local players in the top 10, Goods, Galleon, Takatack and Kimstore, have more than a million followers on Facebook.
43 out of the top 48 e-commerce on the list have more Facebook followers and less website traffic; only five e-commerce sites (Lazada, Ebay, Beauty MNL, Galleon and Easy Shop), have more monthly visits. Even Melissa Philippines, in 39th place in terms of website traffic (less than 10,000), placed third on Facebook behind Lazada and Zalora with almost 6 million followers. Similarly, Eazy Fashion reached a million of followers despite its low traffic (less than 95,000).
According to wearedigital.com, Facebook Messenger recently doubled its active users, surpassing Viber Philippines as the country’s top messenger app. The Facebook Messenger app is widely used for business transactions in the country, easing engagement between businesses and consumers.
Due to its demand for businesses, PayMaya and GCash, two of the country’s top mobile money service providers teamed up with Facebook Messenger to launch payment option in its application which would cater to remittances, payment bills and mobile data purchasing.
Fashion brands are the most popular on Instagram
Apartment Eight Clothing and Sunnies Studios are the top 2 most followed e-commerce shopping on Instagram, both actively co-brands their label with celebrity endorsements which easily becomes an instant hit on Instagram.
According to Apartment Eight Clothing’s founder Sheira Lim, social media is the most effective fashion marketing tool for its brand, “Our customers already know what they want to buy because they see it in our Instagram page and they already have ideas how to wear a piece based on what they’ve seen. In fashion, marketing and social media is all about communicating visuals in the most effective way.”
Meanwhile, Sunnies Studios, owned by celebrity and entrepreneurs Georgina Wilson, Martime Cajucom, Bea Soriano Dee and Erik Dee, has a product-centric marketing approach on their social media accounts. Sunnies studios has three different pages on all their Instagram, Facebook and Twitter accounts.
Studios Sunnies showcases their fashion eyewear and other retail clothing while Specs Sunnies showcases their prescription eyewear. Metro Sunnies, on the other hand, features their followers’ photos wearing their label making it their most followed Instagram and Facebook pages.
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For international players, Lazada and Shopee are the third and fourth most followed e-commerce companies on Instagram. Most of the 21-fashion businesses on the list (including Lazada and Shopee) carry brand-less fashion items from their independent merchants.
The regard for brand-less culture in online shopping suggests that social class still represents a bigger market for low cost apparel despite the growing population of high income earners in the country.
Social Media an integral part of e-commerce
Lazada consistently topped the e-commerce world, both for website traffic and social media followers. According to Lazada Philippines’ CEO Inanc Balci, they are utilising social media platforms as a strategy for retail innovation.
Lazada’s Instagram strategy directly connects their merchants’ Instagram accounts to their website, which would automatically sync all their merchants’ products to Lazada’s website. Similarly, Lazada is implementing the same strategy on Facebook.
On the other hand, seven out of the 22 fashion local players started out not having their website, only utilizing Facebook and Instagram. They are Sunnies Studios, Apartment Eight Clothing, Melissa Philippines, The Lifestyle Store, Sunday Dress, Zeus, Dress PH, and Little Emily Shop.
In 2011, Multiply, was the most popular social media platform for independent merchants to leverage their products online at zero cost.
Since then, the behavior of the Philippine e-commerce leaned towards social media integration. To date, the popularity of Facebook and Instagram is an opportunity marketplace for e-commerce and independent merchants alike especially because Filipinos are the number one who nation for time spent on social media.
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About iPrice Group iPrice Group is operating as a one-stop shop e-commerce aggregator across 7 markets in Southeast and East Asia with key feature in price comparison. It’s meta-search feature collates e-commerce products: home and living, cosmetics, grooming, fashion and electronics while its key feature in price comparison specifically caters to electronics.
Copyright: juliatim / 123RF Stock Photo
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