Having worked for some of the Philippines fast-growing E-commerce pioneers such as Lazada.com.ph, and had one way or the other communicated with top titans of Philippine E-commerce business such as the managing director of CashCashPinoy, Business Development Managers of Ensogo, Managing Director of Zalora.com.ph. Indeed the e-commerce landscape business in the Philippines has made some dramatic turn around from several years ago. Filipino individuals and households now embrace convenience online shopping and has avoided the dreaded Metro traffic turns to online marketplace to get their essential needs and wants such as gadgets, mobile phones, kitchen appliances, dining wares, clothings, shoes, and even freebies on spa, skincare products and many more.
Online retailing is growing at an
astonishing rate, with online sales now accounting for around one quarter of the total retail
market. Retailers who ignore e-commerce may see their trade lessening as
customers continue to shift to ordering products online. However, you need to
think carefully and weigh all the advantages and disadvantages - backed by good
market research - before deciding on whether or not to trade online.
Advantages of online retail
The benefits of retailing online include:
·
Easy
access to market - in many ways the access to market for entrepreneurs has
never been easier. Online marketplaces such as eBay and Amazon allow anyone to
set up a simple online shop and sell products within minutes.
·
Reduced
overheads - selling online can remove the need for expensive retail
premises and customer-facing staff, allowing you to invest in better marketing
and customer experience on your e-commerce site.
·
Potential
for rapid growth - selling on the internet means traditional constraints to
retail growth - eg finding and paying for larger - are not major factors. With
a good digital marketing strategy and a plan a scale up order fulfilment
systems, you can respond and boost growing sales.
·
Widen
your market / export - one major advantage over premises-based retailers is the
ability expand your market beyond local customers very quickly. You may
discover a strong demand for your products in other countries which you can
respond to by targeted marketing, offering your website in a different
language, or perhaps partnering with an overseas company.
·
Customer
intelligence - ability to use online marketing tools to target new
customers and website analysis tools to gain insight into your customers’
needs. For more information on driving sales through online advertising see how
to develop an e-marketing plan, and for advice on improving your customer’s
on-site experience.
Disadvantages of online retail
Some negatives of online retail include:
·
Website
costs - planning, designing, creating, hosting, securing and
maintaining a professional e-commerce website isn’t cheap, especially if you
expect large and growing sales volumes.
·
Infrastructure
costs - even if you aren’t paying the cost of customer-facing
premises, you’ll need to think about the costs of physical space for order
fulfillment, warehousing goods, dealing with returns and staffing for these
tasks.
·
Security
and fraud - the growth of online retail market has attracted the
attention of sophisticated criminal elements. The reputation of your business
could be fatally damaged if you don’t invest in the latest security systems to
protect your website and transaction processes.
·
Legal
issues - getting to grips with e-commerce and the law can be a
challenge and you’ll need to be aware of, and plan to cope with, the additional
customer rights which are attached to online sales.
·
Advertising
costs - while online marketing can be a very efficient way of
getting the right customers to your products, it demands a generous budget.
This is especially true if you are competing in a crowded sector or for popular
keywords.
·
Customer
trust - it can be difficult to establish a trusted brand name,
especially without a physical business with a track record and face-to-face
interaction between customers and sales staff. You need to consider the costs
or setting up a good customer service system as part of your online offering.
