West Philippine Sea

In a dinner I hosted for the newly confirmed Ambassador to China, Sonia Brady, I recalled four points which I read while studying international relations at Georgetown University: 1. Diplomacy is putting an issue in a positive, constructive and respectfully assertive way. 2. Diplomacy is trying to solve a problem in a peaceful way. 3. Most diplomats are looking out for their own country’s best interest, while trying to look like they care about the other country’s concerns. 4. When all else fails, threaten to use the economic or military options!

Considering what has transpired in our relations with China in the past and present including recent events in the Panatag Shoal, it would seem that others have also read the same four points.

 While abroad, I learned that Manuel V. Pangilinan went to China to dialogue with the state-owned China National Oil Corp. (CNOC) regarding a potential joint exploration and development arrangement for his company’s concession in the Recto Bank. It was also reported that the Chinese Ministry of Foreign Affairs commented positively on a Filipino businessman talking to CNOC. I have always maintained that the pragmatic approach was to have a commercial transaction. Pangilinan earlier explained that the partnership with CNOC could boost financial and technological support for the project and, at the same time, serve to “depoliticize” the concession area. Let the businessmen of both sides work out a deal. Unfortunately, the devil is in the details but it is a promising start to a model for a win-win solution. However, he has prudently stated: “One thing that we will not do is infringe on the sovereignty or breach the laws of this country.”

Technology update (continued) e-Commerce

As I stated in my last column, retail spend of $12 trillion was 20x that of advertising and 13x that of travel and 6x that of media and entertainment. Southeast Asian sources estimate e-Commerce will grow from $1.4 billion today to $14 billion dollars by 2020 and yet penetration will still be very low considering population numbers in the chart below. There are over 140 million internet users in Southeast Asia. The chart below defines the developed markets as Singapore and Brunei while Malaysia, Philippines, Thailand, Indonesia are categorized as emerging markets in varying stages of development. The combined population of the emerging markets validates the great potential for e-Commerce in Southeast Asia. Myanmar, the frontier market may surprise all of us depending on how fast the government is willing to liberalize.

The next chart provided by Nielsen Research enumerates the barriers to e-Commerce in Southeast Asia, namely: cultural and structural issues. As an example: my Thai colleague informs me that going to a mall for shopping is a traditional family event and it is difficult to convert Thais to on-line shopping. Perhaps, that is the same challenge for us in the Philippines where the lure of SM Malls will always be there. Yet there is one individual, R. J. David together with his wife, who has established a thriving e-Commerce business called Sulit.com.ph.

Source: Nielsen Research

Sulit.Com.Ph

This young couple has become the largest e-Commerce site in the Philippines. It is the premiere general classifieds site with a live listing of 930,000 across all categories from cars, real estate, memorial lots to cameras/appliances and medicines. I had never heard of this site until my daughters informed me they were regular customers of the site which 34 percent of Filipino internet users visit regularly. A friend, Raymond Ricafort sold his car through Sulit. My lawyer Rico Tan informs me that this site is what he uses when he needs to buy something.

There are three ways to measure e-Commerce: traffic; listings and engagement. Based on “Effective Measure” as the source, (as of May 2012), the performance of Sulit versus their closest competitor is as follows: In traffic, they were more than three times; in listings they were 750,000 versus 130,000; and in engagement, Sulit customers spent 11.3 minutes versus four minutes. Even more impressive was their ranking in “Alexa”: as of June 8, 2012, Sulit was No. 9 in Philippine sites. The top 10 were Facebook, Google.com.ph; Google.com; Youtube; Yahoo; blogspot.com; Wikipedia; Sulit and wordpress.com.

Emergence of mobile computing

Source: Nielsen Research

The chart above indicates the growth of mobiles in the region. According to the Global Information Technology Report 2012 of the World Economic Forum, “Smartphones represent the newest wave of mobile phones and now comprise the largest segment of mobile broadband shipments. Worldwide, the installed base of smartphones exceeded that of PCs in 2011 and is growing more than three times faster than PCs. Looking forward, approximately four billion smartphones are expected to ship between 2011 and 2015, clearly establishing them as the most pervasive computing and internet access device today and in the future”.

The report further elaborated on the use of smartphones in the e-Health area. Many nurses in South Africa lack internet access. They are unable to share information with the global health community on rare and complex medical cases, keep abreast of the latest information on epidemics, or obtain information in real time for patient evaluation. The Mobile Health Information System, projected 3G wireless technology to enable nurses to provide better care. I have asked Ernie Garilao, the president of the Zuellig Family Foundation to explore how we can do this in collaboration with PLDT or Globe.

My next column will continue to cover in greater detail the results of the “Global Information Technology Report 2012” particularly on how the Philippines fared.