Key challenges delay eCommerce growth

CEBU, Philippines — Slow internet connection and relatively high shipping cost are two of the stumbling blocks impeding businesses from fully embracing the electronic commerce (eCommerce) platform.

Exporters in particular are concerned about their chances of competing in online selling considering high logistics cost coupled with a snail-paced internet connection, which obviously is not at par with other competing countries, a survey conducted by Philexport revealed.

Philexport recently conducted a survey tapping members to find out the state of Philippine e-commerce, as domestic and cross-border e-commerce surges worldwide and is set to become the future of business and trade.

According to the survey, exporters who do not have online presence have expressed plans to do so with the overwhelming majority of firms calling for faster internet service and lower shipping costs to improve competitiveness.

Of the 83 respondents, 42 are engaged in eCommerce, 37 or 88% said they intend to continue, while 29, or 71% of the 41 non-practitioners said they have plans of starting.

Among those who are into eCommerce, 22 cater exclusively to the domestic market, 10 are exclusively cross-border sellers, and six do both markets.

According to the survey, social media is the most utilized tool in online selling, used by 30 percent of the surveyed, followed by online marketplaces Shopee and Lazada for domestic eCommerce, and Amazon and Alibaba for cross-border e-commerce.

There are also other e-marketplace platforms that respondents use, most notably BeautyMNL, Adobomall, and the companies’ own websites.

For both practicing and aspiring online merchants, the biggest challenge is internet connectivity, followed by seller protection, and electronic payment system/facility.

Other issues on the list are logistics, government policies, cybersecurity, data privacy, and intellectual property rights.

For eCommerce practitioners in particular, seller protection is the biggest concern, indicating that the security of their online transactions is of paramount importance.

Meanwhile, cybersecurity garnered the lowest rating in terms of efficiency of vital components in Philippine e-commerce.

On recommendations to improve Philippine eCommerce, the biggest call is for faster and more reliable internet service.

“E-commerce relies on internet connection, hoping that the gov't can do something for a cheaper and faster connection,” said one commenter.

Several other recommendations are variations of this theme, ranging from “give more access [to] internet” and “more sufficient net reliability and friendly user system” to “improve internet connectivity, logistics cost” and “a fast internet connection nationwide.”

Other suggestions include internet in public areas; enhance ISPs or internet service providers; policies on regulations/security; business-friendly policies; internet connection

should be shouldered by the government; simplify permits and clearances; better IRR for cybersecurity; implement regulations; improve, expedite infra project to ease up congestion in the metro; third telco should be utilized ASAP; more teeth to existing laws; minimize red tape transactions in gov't agencies; and better logistics environment.

Majority of the 83 respondents belong to the associate, housewares, chemicals, and holiday decor industries of PHILEXPORT.

eCommerce refers to the buying and selling of goods or services using the internet and the transfer of money and data to execute these transactions. It is often used to refer to the sale of physical products online, but it can also be used to describe any kind of commercial transaction conducted through the internet.