Better marketplace ahead

HIDDEN AGENDA - Mary Ann LL. Reyes - The Philippine Star

Filipinos used to be generally skeptical about spending money on online purchases and other transactions.

Everything however changed during the COVID pandemic as mobility restrictions forced many to resort to e-commerce transactions and to buy groceries and other necessities online. Filipino entrepreneurs quickly caught up as many started setting up online stores. Even big mortar and brick stores joined and sold almost everything online.

Mobile money service providers like GCash and PayMaya also saw their registered users soaring during the pandemic. According to one report, GCash was the most downloaded financial services app in Google Store and App Store in 2022. It said that for nine months since January 2022, the app took the top spot for both Android and iOS users, recording 10 million downloads. GCash also grew its active user base by 130 percent by September 2022 compared to 2019.

Statista meanwhile expects domestic wallets GCash and Maya to have many more users than GraPay or PayPal by 2025. It said that GCash registered about 76 million users in 2022, a significant increase from the previous year.

FitchSolutions in a report also revealed that GCash had around 14 million daily active users registered as of June 2023 compared to Maya’s three million.

Meanwhile, logistics company Locad said that the Philippine e-commerce market is expected to grow by 15 percent to at least $16 billion this year, with growth rates slowing down with the reopening of physical stores.

It cited a report from Global Data which projects an annual increase for the Philippines of 15.8 percent in transaction value from 2022 to 2025. By 2025, e-commerce transactions are estimated to reach P495 billion, a substantial increase from the nearly P270 billion recorded in 2021.

For its part, the US Department of Agriculture projects total e-commerce sales in the Philippines to reach $24 billion by 2025, as more Filipino consumers get used to online purchases. Half of the more than 70 million online users in the country participate in cross-border e-commerce, with purchases of mostly non- food products accounting for a fourth of the e-commerce market.

The Philippine E-Commerce Association (PECA) believes that e-commerce is here to stay and will keep increasing post-pandemic. It said that since the pandemic started late 2019, the e-commerce vertical has seen a dramatic rise due to movement restrictions and lockdown enforcements which in turn made the Philippines the third in Southeast Asia, next only to Indonesia and Vietnam, with the highest e-commerce growth rate.

Data from the Department of Trade and Industry show that the industry generates an average of P2.3 billion sales a month, even as more people are being drawn to ply their trades on the web. There are about eight million online sellers nationwide, PECA added.

Back in May, PECA president Jere Von Basa underscored the need for laws that could help push for consumer protection by way of certification of online traders to combat scam and fraud.

In the 2023 Asia Scam Report, the Philippines has been tagged as having the highest rate of online shopping scams among 11 economies surveyed, reaching 35.9 percent. The other respondents came from China, Hongkong, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

Cybercrime Investigation and Coordinating Center (CICC) executive director Alexander Ramos has reiterated his appeal to the public to be careful when they do their online shopping especially during this Yuletide season since shopping scams usually increase during Christmas as scammers take advantage of the high volume of online shopping and people’s vulnerability during this period.

According to the Asia Scam Report, shopping scams was one of the nine mainstream fraud scenarios and techniques used by online scammers. Other scams include identity theft, investment scam, government/bank scam, job scam, lottery scam, family/relatives scam, bill payment scam, and charity scam.

The report revealed that 24.8 percent of Filipino victims respond too quickly to scammers’ demands while 21.1 percent of victims choose to take a risk despite uncertainty about the risk.

Just last week, Republic Act 11967 or the Internet Transactions Act was signed into law. The ITA protects merchants through the establishment of a code of conduct for business entities that would flag and sanction anti-competitive practices, such as putting up sites that pass themselves off as authorized online shops.

RA 11967, which aims to protect consumers and merchants engaged in internet transactions, is a landmark measure as it comes at a time when online selling and buying have become our way of life, Trade and Industry Secretary Fred Pascual said.

It will create the Electronic Commerce Bureau that will allow the DTI to create an online business database that will provide government and consumers access to information on businesses selling online. The new law also gives the DTI regulatory jurisdiction over internet transactions, providing the department the power and authority to issue compliance orders against violators, to issue subpoenas, to issue orders to take down websites, and to blacklist online businesses, among others, even as it provided for the liabilities of online merchants, e-retailers, e-marketplaces, and digital platforms, including penalties.

RA 11967 provides that the bureau shall receive and refer business and consumer complaints on internet transactions to the appropriate government agency and shall have the power to investigate, motu propio, and recommend the filing of the appropriate case for violations of the law.

Companies like foodpanda, Grab, Lalamove, Lazada, Meta (Facebook), Pick-a-Roo, PLDT, Shopee, TikTok, Zalora, Union Bank, and even industry organizations like the Fintech Alliance and the Philippine Retailers Association, all welcomed the passage of the new law that would ensure the safety of both merchants and consumers.

The law will have an extra-territorial application, meaning all e-commerce participants using the Philippine market, regardless of their physical presence in the country, shall be subject to the law. RA 11967 will apply to all business-to business (B2B) and B2C internet transactions, but excludes online media content and consumer-to-consumer (C2C) transactions.

It likewise provides for instance when the e-marketplace or digital platform that facilitated the internet transaction subject of a civil action or criminal complaint shall be subsidiarily liable to the online consumer. But the said e-marketplace or digital platform shall be solidarily liable if it fails, after notice, to act expeditiously to remove or disable access to goods or services appearing on its platform that are prohibited by law, imminently injurious, unsafe, or dangerous.

Consumers may claim damages by filing a case before the court or the DTI within two years from the time the cause of action arose. Meanwhile, the DTI shall impose administrative fines as penalty against online merchants or e-retailers found guilty of any deceptive, unfair, or unconscionable sales act or practices done through the internet.

The new law will take effect on Dec. 20, with an 18-month transition period for all affected online businesses to comply.


For comments, e-mail at [email protected]

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