Trust issues on e-commerce

The global outbreak of highly infectious 2019 coronavirus disease, or C-19 for short, has already claimed thousands of lives and still continues doing so in many countries around the world. Ironically, however, C-19 pandemic has reinvigorated and infused more life to the internet world where people find safe refuge from the deadly flu-like virus.

Countries impacted by the C-19 pandemic like the Philippines now rely much on the internet world because of its built-in advantage to connect and enable people to do face-to-face meeting virtually online. People would rather surf safely through the internet in doing activities instead of going to school, work from home, buy grocery needs online etc.

Thus, it is no surprise on the unprecedented increase of online activities and has even become veritable business in the new normal.

As early as in 2016 when Rep. Wes Gatchalian first run and won as Congressman in the first district of Valenzuela City, re-filed a proposed legislation that was not acted upon by the 16th Congress. It was a time, Gatchalian recalled, when the internet economy was still in “nascent” stage in the Philippines starting with Uber and Grab as online ride-hailing car services.

Although the lockdowns in many areas have been relaxed, Gatchalian conceded consumers will find comfort in continuing to utilize online transactions despite resumption of work and businesses. This is why, he explained, he filed House Bill (HB) No. 6122 which seeks to create a legal framework for this emerging market.

Citing a study by Google and Temasek, Gatchalian noted how the internet economy in the Philippines — including electronic commerce (or e-commerce), online travel, online media, and ride hailing — grew from just $2 billion in 2015 and now reaching as much as $7 billion last year.

Speaking in our Kapihan sa Manila Bay virtual news forum last week, Gatchalian also cited Malaysian financial giant Maybank which recently released its April 20 report titled “Consumer Behavior During a Pandemic” that showed the lockdowns following the C-19 pandemic imposed in a number of countries like in the Philippines has increased online consumer activities. The same report, he noted, pointed to the newfound habit of ordering food online was expected to spread to a wider array of goods and services offered on the internet as consumers. While fearful over the C-19 infection Filipino consumers are also plagued by “trust issues” over online sellers.

As chairman of the House committee on trade and industry, Gatchalian noted with concern results of the study done by the Bangko Sentral ng Pilipinas showing majority of Filipinos still prefer cash payment than digital payment and only 4.5% are on mobile money account. A research done by their committee, Gatchalian disclosed, indicated it will take a long while, perhaps a year or so for Filipinos to go back to their normal consumption habits.

“In fact, even brick-and-mortar stores have resorted to selling their products online,” he quipped.

Thus, he stressed the need for sound policy regulations for e-commerce under his HB 6122 in the light of its growing popularity amid the continuing community quarantine imposed all over the country. “I believe HB 6122 will address the lack of trust,” he vowed.

Gatchalian asked the support of the Executive Department on the adoption of HB 6122 as a urgent administration measure to expedite its passage into law by the 18th Congress in support of the government’s measures to restart the country economy seriously impacted by the C-19 pandemic. Incidentally, Samar Rep.Edgar Sarmiento called me up yesterday to correct that the 18th Congress just finished their first regular sessions last June 5. They will resume their second (not third that I mistakenly stated in my column last Monday) regular sessions on July 27. Mea culpa.

At any rate, both chambers have enough time to pass upon urgent bills before the present crop of lawmakers bow out of office along with President Duterte in June, 2022 yet.

“As we find ourselves faced with a global pandemic that has severely affected many businesses around the world, we see the need to further accelerate the government’s efforts to encourage micro, small and medium enterprises (MSMEs) to engage in e-commerce,” Gatchalian urged. He personally made this request during our Kapihan sa Manila Bay where Department of Finance (DOF) Secretary Carlos “Sonny” Dominguez and Department of Trade and Industry Secretary Ramon “Mon” Lopez joined him in our Webinar virtual news forum last week.

The two key economic advisers of President Duterte – who are also members of the Inter-Agency Task Force on the Management of Emerging and Infectious Diseases – could not agree more on the urgency of updating the country’s laws of the Philippine internet economy. They both noted with particular interest the lucrative operations here in our country of large foreign platforms like Google, Amazon, Zalora, Lazada, Shoppee, even Netlfix despite the C-19 pandemic.

“We agree with Congressman Wes (Gatchalian) on the need to level the playing field and it is not targeting anyone but we have to implement the law,” Dominguez stressed.

For his part, the DTI Secretary confirmed there are indeed “trust” issues affecting the country’s e-commerce as evidenced by the growing number of consumers’ complaints filed in their office. While indeed the Philippines has 71% interconnectivity, Lopez admitted this is not fully utilized to help spur economic growth of the country. “Many are still uncomfortable with digital payments. If we solve the trust issues, it’s only then our e-commerce will grow,” Lopez quipped.

The first step to address the “trust” issues, he suggested, is for all online sellers, big or small, must first register at the DTI. This, he pointed out, is to protect consumers and enable the government as well to extend help to many MSMEs, many of which are into online selling.

The C-19 has forever changed our way of life and going online, whether we trust or not the online sellers, is now the new normal.