Filipino Buying Habits: Offline vs. Online

Patricia Marie Lim - 4 months ago

Surely many Filipinos will find this scenario commonplace: a family goes to their favorite mall on a Sunday morning. They hear mass at the mall chapel, then they find a restaurant to have lunch in. Errands such as grocery shopping and bill payments may also be done if needed. Afterwards, there’s window shopping (or retail therapy if you’re feeling generous) at a toy store, clothing brand, or electronics store. A one-stop shop for everything you need, your nearest SM has definitely got it all for you, and with the wide variety of Ayala Malls, you’ll certainly love ‘em all.  

While this scenario may seem familiar for mid to older generations, the younger generations might be wondering what on earth we’re talking about. This is because of the rise of many technologies these days which have changed the way we run our errands and even the way we shop. Today, many activities that have been done at the mall can now be done online – and yes, this even includes hearing mass (see http://www.quiapochurch.com/ for instance).

So between the two, which method does the typical Filipino consumer prefer? Let’s take a look at Filipino shopping habits based on the items they purchase both offline and online.

Offline Preferences

By definition, offline shopping is the purchase of goods and services in a physical location or store. In the Philippine context, majority of these retailers are located in malls nationwide, the malls being owned by large conglomerates such as Ayala Malls and SM Prime Holdings. To give you an idea of their scale, SM malls, for instance, have 3.5 million people visiting 17,200 shops in 56 SM malls every day.

As the Philippines’ largest mall operator, SM has done a study on their visitors. One of the insights they noticed is that as shopping becomes more and more an online activity, Filipinos now go to the mall with the primary purpose of socializing, with shopping being a secondary purpose. This habit contributes to 25-30% of their food and beverage sales.

Another habit or preference offline shoppers have is with regards to purchasing children’s toys. Globally speaking, 45% of shoppers prefer to research their toy purchases online. However, shoppers in the Philippines are the ones who most prefer researching for toys in-store at 43% (4 out of 10). With regards to the actual purchase, the Philippines also tops that category globally, as a little over half of the shoppers (52%) also prefer to purchase toys in the store itself.

Filipino shoppers also possess a preference in buying household appliances offline. Globally speaking, 56% of global shoppers prefer purchasing in store. This number is not far from the Philippines, as nearly half (46%) of Filipino shoppers prefer doing their research and fulfilling their purchases in store.

Online Preferences

As for online habits and preferences, e-commerce is what normally comes to mind in the Philippines. E-commerce is the buying and selling of products and services online through the use of a website or an app. Well-known e-commerce sites in the country are Lazada, Zalora, and OLX.

Based on a study done by VISA, these are the top online transactions of shoppers in the Philippines:

 Image from ABS-CBN

 

The Philippines has over 119 million internet users, with 38% of the population having purchased something online in the past month. The largest contributor to shifting consumer habits in the Philippines, e-commerce has proven that it is here to stay. This year, there was an 85% increase in year-on-year growth in the number of people purchasing online via mobile phone. In 2017, e-commerce revenue in the Philippine will amount to US$1,237m. E-commerce revenue is also expected to grow at a rate of 16.2% yearly, resulting in a volume of US$2,619m in 5 years.

Top products purchased on e-commerce websites are the following:

  •         Consumer Electronics & Physical Media
  •         Special Interest
  •         Clothes & Shoes
  •         Furniture & Home Appliances
  •         Food, Cosmetics, & Pharmaceuticals

There are many reasons why Filipinos love buying items online. One of those reasons is convenience. Whether you’re at home, at the office, or on the road, you can easily search for and purchase a product online – all you need is a mobile device and internet connection. These websites are also chock full of great deals and discounts, which you would normally not get if you purchased the same items in a physical store. Lastly, there are so many payment options. Aside from paying via credit card (with many types of installment plans), you can also pay via cash on delivery, mobile transfers, and bank deposits.

Filipinos also don’t just buy physical items online, but services as well. Outside of your typical product-centric websites, we also have service websites like those for airlines (ex. Philippine Airlines, Cebu Pacific), and banking & finance apps.

An omnichannel approach

On the surface, it may seem like Philippine consumers have their own preferences depending on what they want to purchase. However, studies show that ultimately, consumers are looking for a more streamlined approach. 85% of consumers actually want a unified experience across both channels, but only 30% actually feel like they’re getting one. Knowing this, many brands and marketing companies have actually taken note of this and applied it.

A good example of this would be the Starbucks Rewards card. Many food and beverage stores might offer a rewards card in the form of a piece of paper, but Starbucks heightened this experience for its customers. In the Philippines, customers can purchase a rewards card in any Starbucks branch. The card is loaded with a minimum of Php 300.00, and it can be used to purchase drinks, food, and branded products. The card also allows you to earn stars for every drink you buy. The best part is that you can create an online account where you can check your balance, keep track of your stars, see all your transactions on the card, and top up the balance via credit card.

Image from Starbucks Philippines

 

Another brand that has mastered the omnichannel approach is sports retailer Decathlon Philippines. With over 70 brands in store at more than 1,000 branches worldwide, Decathlon has been able to adapt to the ever-changing needs of its customers. With only one branch all the way down south of Metro Manila, Decathlon has created ways how its customers can look at their products without needing to be physically present in their store. Just create an account on their website and you will have access to all the products in their inventory. On top of this, you can also opt to have your items delivered to your doorstep. And if you’re not keen on paying for the delivery fee, you can request to hold the item and you can pick it up and pay for it in store.

 

Image from Decathlon Philippines 

 

So at the end of the day, instead of pitting offline and online consumer preferences against each other, it’s actually a better idea to combine them. Pooling their strengths will allow you to create a stronger marketing strategy that will aid in a better user and customer experience for your consumers.

 

References:
ABS-CBN News. (2017, Aug 26). What do Filipinos buy online? Retrieved from ABS-CBN News: http://news.abs-cbn.com/business/multimedia/infographic/08/25/17/what-do-filipinos-buy-online
Garcia, K. (n.d.). A Profile of Internet Users in the Philippines. Retrieved from Rappler: https://www.rappler.com/brandrap/profile-internet-users-ph
McEachern, A. (2017, Jul 21). Comparing Online and Offline Shoppers: Is There a Difference? Retrieved from Smile.io: https://blog.smile.io/comparing-offline-and-online-shoppers
Reyes, T. (2016, May 31). INFOGRAPHIC: Fast facts on online shopping in PH. Retrieved from Rappler: https://www.rappler.com/brandrap/finance-and-industries/134852-ecommerce-industry-philippines
Rimando, L. (2016, April 8). Forbes Philippines: Reinventing the mall. Retrieved from SM Prime: http://www.smprime.com/forbes-philippines-reinventing-mall
Rouse, M. (2017, Jun). What is e-commerce (electronic commerce or EC)? Retrieved from SearchCIO: http://searchcio.techtarget.com/definition/e-commerce
Shackleton, T. (2016, August 19). Online vs Offline Retail: Pros, Cons & an Omni-Channel Future. Retrieved from Statement: https://www.statementagency.com/blog/2016/08/online-vs-offline-retail-pros-cons-an-omni-channel-future
Trout, J. (2017, Feb 2). 5 Excellent Examples of Omnichannel Retailing Done Right. Retrieved from Multichannel Merchant: http://multichannelmerchant.com/must-reads/5-excellent-examples-omnichannel-retailing-done-right/

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