There is no doubt that electronic commerce, which includes buying and selling of goods and services by businesses and consumers, has grown exponentially in the past few years.
According to statista.com, in the Philippines, revenue in the e-commerce market has reached $1.49 billion, with the largest segment being electronics and media with a market volume of $619 million. Total revenue, it said, is expected to grow to $2.619 billion in 2022, given a compounded annual growth rate of 15.1 percent. Electronics and media will still lead the pack, accounting for $834.9 million of revenues, followed by toys, hobby and DIY with $555 million, fashion with $476.3 million, food and personal care at $257.8 million, and furniture and appliances at $219.3 million.
The report reveals that user penetration is currently at 35.2 percent and is expected to grow to 47 percent in 2022. Meanwhile, the number of users is expected to reach 53.8 million by 2022 from the current 37.7 million.
As a buyer of goods online, I have come to realize that the appeal of online shopping rests in the fact that aside from the convenience of not having to go to a physical store and braving the monster traffic of Metro Manila, there are more choices on the Internet. In fact, even physical stores like Robinsons Department Store, The SM Store, Robinsons Handyman, Penshoppe, Watsons, Toys R Us, Fully Booked and Bench, already have official online stores hosted by Lazada.
So how do these products reach the consumers? Well, the big business-to-consumer (B2C) sites like Lazada and Zalora have tie-ups with the more established courier companies like LBC. Some consumer-to-consumer sites, meanwhile, use smaller delivery companies which charge rates as low as P40 if the item fits their pouch or P75 for packages up to three kilos that do not fit the pouch, in which case the seller provides his own packaging.
Entities like Xend charge as low as P39 for its unliweight small pouch. Fastrack Courier Services charges P40 for items that can fit its 6 x 12 inch pouch regardless of the weight. Lalamove’s rates start at P60. Compare this with LBC whose small pouch costs P85 if within NCR but its just enough to fit a letter envelope.
But the complaints against some courier services have been mounting. Yes, they charge very cheap rates but you don’t know when the item will be picked up. Sometimes, the messenger does not show up at all. In some cases, items get lost and the buyers, who have already paid for the items, have no recourse but to absorb the loss.
In a recent talk with Air21 president Reuben Pangan, he explained that many of these small courier services utilize independent contractors – people who own motorycles and other vehicles – which is the reason why they do not have control over them nor over the goods. The items are not insured so if they get lost on the way to the consumer, both the seller and the buyer get to absorb their share of the loss.
He said that companies like Air21, which is the market leader in terms of business-to-business (B2B) delivery, have to secure several licenses such as from the Civil Aeronautics Board (CAB) as they are freight forwarders and from the Land Transportation Franchising and Regulatory Board (LTFRB) since they own and operate public conveyances. This may be one of the reasons why they charge more, not to mention the fact that they can track the whereabouts of the items on their way to the consumer.
Other courier services, meanwhile, do not secure any licenses and permits at all. It is not even clear what their classification is.
Maybe it is about time that government starts regulating these informal courier service providers who do not even have their own messengers or vehicles but rely on independent contractors to do the job.
No fusion in mfm
Former tourism secretary Ramon Jimenez has a lot of explaining to do, not only in connection with the P1.2-billion ad campaign that was not bidded out, but also the fact that he bound the Department of Tourism to a five-year contract for the conduct of the gastronomy event Madrid Fusion Manila, again without undergoing the required bidding process.
In fact, the National Bureau of Investigation has already filed a graft complaint against Jimenez and other officials for the “It’s More Fun in the Philippines” ad campaign from 2012 to 2014.
Meanwhile, the present DOT leadership led by Secretary Wanda Teo has not made up its mind as to whether or not to push through with this year’s staging of Madrid Fusion Manila (MFM) due to irregularities surrounding the original contract signed in 2015, during Jimenez’ term.
We have learned that Teo, with the help of honorary consultant Robert Lim Joseph, is determined to get to the bottom of things, starting with a possible renegotiation of the terms of the five-year contract with Madrid Fusión’s organizers.
But how can they renegotiate if the contract itself is nowhere to be found.
And according to the Commission on Audit, there has been no liquidation of the funds released by DOT to the private organizers for the 2015 and 2016 staging of MFM. The third one, which happened last year, is currently being audited.
Even the idea of the MFM is questionable. One Manila-based Spanish chef was quoted as saying that the event sells Madrid, or Spain, here in the Philippines and in Asia. He said that the guest chefs, who come here without payment, do not get exposed to Filipino cuisine, nor do they get to share experiences, techniques, and [the] products of Filipino gastronomy. They are rushed from one event to the next, put on display for guests and the press to see, all the while tired flying to Manila and unpaid. So where do the P120 million go?
Teo and Joseph are not against the idea of hosting a food fair that melds culinary cultures in a fine and classy manner as Madrid Fusión does. But it has to promote Filipino cuisine and promotes Filipino gastronomy. This is why Teo and Joseph are pushing for a review of the MFM contract to make sure that true fusion happens.
Former tourism secretary Mina Gabor has observed that there is no direction as to what MFM wants to achieve like to have a halo-halo outlet in major tropical resorts or adobo corners in major cities or food festivals in hotels and restaurants abroad, adding that the programs are not focused and the topics are too many.
Gabor added that there seems to be no holistic approach to the development and marketing of Filipino food before. Meawhile, chef Philippe Bartolomi, creator of Chefs on Parade, has said that Madrid Fusión did not achieve a popular reach, being very elitist event that left out many chefs and culinary students.
There is word that MFM will be held in September, but according to Joseph, MFM will push through only if the organizers are willing to renegotiate the terms of the contract.
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