Will online grocery stores and cashless payments finally gain traction in PH?
Stuart Jamieson
Since 2012, Stuart Jamieson has led Nielsen’s Watch and Buy growth strategy in the Philippines as managing director. Concurrent to this role, Stuart is the cluster lead in the emerging markets group, overseeing the business performance of Thailand, Vietnam and Myanmar. He held various leadership roles in Nielsen’s businesses in Australia and New Zealand prior to his appointment to the Philippines.
He shares insights on digital marketing trends in the Philippines.
Q: Webrooming (searching online, but buying in physical stores) instead of showrooming (searching in physical stores, but buying online) is a common Filipino practice. What could explain this habit?
A: Shoppers want to know more about the product. A brand’s online presence allows potential consumers to know more about the product features and benefits and check out reviews.
Trust is a factor that hinders Filipinos in buying online. Filipinos want to see the product before they buy it.
Another trend with the younger generation is instant gratification—they do not want to wait when they can get it now.
Q: Online groceries have not grown in the Philippines. It is still a niche at 1-percent penetration versus 51 percent for packaged grocery foods and 37 percent fresh groceries in South Korea, the highest in Asia. What is it telling us about Filipino consumers?
A: South Korea is an early adopter and there is no other market that comes close to that behavior.
Other Southeast Asia markets are more like the Philippines. Filipinos still shop quite frequently and make many purchases on a needs basis through sari-sari stores, often visiting these stores on a daily basis.
Nine out of 10 Filipinos still find shopping enjoyable. They find joy in going from aisle to aisle to see the products and it can be a bonding occasion with their loved ones. Several barriers slowing down online grocery growth include:
(i) Choice. There is also very limited differentiated choice for consumers in the packaged grocery food category;
(ii) Infrastructure. Few online sellers can consistently promise a same-day delivery.
(iii) Ease of Payment. Less than 10 percent of Filipinos have credit cards, which is addressed via cash on delivery.
Q: When do you think will the digital marketing budget of consumer firms dominate that of traditional tri-media in the Philippines?
A: In the Philippines, television penetration is still at its highest at 97 percent. Bulk of ad spending is still spent on TV at about 80 percent. Most Filipinos still watch TV.
However, digital marketing budgets continue to grow year-on-year especially for the large multinational companies.
First, the growth can be directly linked to the continued growth of online access across all socio-economic groups, particularly through mobile access. Smartphone penetration continues, growing significantly year-on-year.
Among active internet users, 97 percent of Filipinos have social media accounts. Digital enables marketers to be more targeted in their communication efforts.
Lastly, we have seen in most markets that as measurement of online audiences gets more accurate, marketers are prepared to spend more of their advertising budget on digital.
Q: What digital trends should marketers watch out for in 2017 and beyond? Why are these important?
A: I expect to see the continued growth of video consumption online not only in the short form, but the growth in watching long-form video. With the success of “Pokemon Go,” I also expect to see more experiential campaigns run by marketers. This is tapped into the insight that millennials want more experiential engagement.
Another trend would be the development of more services that can be paid using mobile cash. This is a big trend overseas and yet to catch on here in the Philippines.
For example, in China, Wechat money is used to transact for online purchases and even to buy a cup of coffee. Digital or cashless payments will improve productivity and ease of doing business.
Lastly, with more and more consumers connecting to the internet and are being exposed to digital campaigns through various platforms, marketers will have an increased need to measure the effectiveness of their digital campaigns. —CONTRIBUTED
Josiah Go is chair of Mansmith and Fielders Inc. The full transcript of this interview as well as his interviews with other thought leaders can be read at www.josiahgo.com.
