Wednesday, July 28, 2021

DTI e-commerce mentorship nears completion

THE Department of Trade and Industry (DTI) has already finished eight of the 10 training modules undertaken by 14 micro, small and medium entrepreneurs (MSMEs) for its e-commerce mentorship program.

The 14 participants will graduate in January 2017, said DTI Cebu Provincial Director Ma. Elena Arbon yesterday.

Arbon said webpages and social media accounts of these 14 mentees are now active but she noted these are still a work in progress.

“Its a successful program. We were able to meet our objective of stirring the interest of local MSMEs, as well as pushing them into the e-commerce space,” said Arbon.

Earlier, she underscored that the agency is ramping up its efforts in helping MSMEs in Cebu connect to the e-commerce system.

Cross border e-commerce or international e-commerce is when consumers buy online from merchants located in other countries and jurisdictions. Arbon believes capacitating the MSMES with e-commerce technology and tools would make them competitive.

“The way forward is to develop local capacity to handle more demand for e-commerce counseling at our Negosyo Centers. We will also build a core group of service providers to meet projected demand,” said Arbon.

Foreign consultancy

She also disclosed that an Australian volunteer consultant will arrive to help sharpen e-commerce skills. Arbon said the consultant will be onboard around February 2017 and will stay with DTI-Cebu for six months.

The Philippines, as an emerging market, is one of the most attractive markets for e-commerce, according to online fashion market Zalora.

Citing a study by Google and Singapore-based investment company Temasek, Zalora Philippines managing director Constantin Robertz said Southeast Asia is the fastest growing e-commerce market in the world, projected to spend 16 times more in 10 years from 2015 to reach $10 billion in 2025.

The Philippines has an annual growth rate of 15 percent to 20 percent in e-commerce spending.

In terms of online penetration, the study shows that 45 percent to 50 percent of Filipinos are already online, a figure expected to grow to 70 percent by 2018, driven largely by mobile internet. E-commerce growth is further boosted with the high spending habits of consumers, especially the younger population.

However, the archipelagic landscape of the country is a major challenge to e-commerce growth, according to Robertz. He suggested that a faster inter-island sea travel and support infrastructure could help expand the growing industry.

He noted that 60 percent of online orders come from outside Metro Manila.

“Faster inter-island sea travel would be a game changer,” said Robertz, adding that one reason for customer satisfaction is reliable and on-time delivery system.

Support infrastructure, faster loading and unloading from vessels, and less time in port processing would also lead to faster and cheaper deliveries, he added.

Another challenge of the e-commerce industry in the Philippines is that its logistics industry is B2B (business to business) driven, which is very different from B2C (business to customer) “where you need to deliver products per piece to the customer all across the country.”

Robertz, however, noted that B2C might become the fastest-growing segment of Philippine logistics in the next 10 years as part of the growth of e-commerce in the country.

Arbon underscored the critical role by the logistics sector in spurring economic growth in the countryside. Having an efficient transport and logistics system can better serve the requirements of SMEs particularly in moving their goods from where they are to where they want their goods to be. However, the poor infrastructure network has limited the SME sector from harnessing economic potential as rough roads, absence of road networks and congestion in seaports and airports cause delays and high logistical costs.

Large cut

In the Philippines, logistics account for 24 percent to 53 percent of wholesale prices, with shipping and port handling costs making up eight to 30 percent, depending on the goods and routes, and five percent of retail price of goods.

DTI has already drafted the proposed Philippine E-Commerce Roadmap (PECR) 2016-2020, envisioned to enable e-commerce become a major economic growth driver in the country.

The road map aims to promote e-commerce growth so the sector can “contribute 25 percent to the country’s gross domestic product by 2020” and support the entry of 100,000 MSMEs in e-commerce activity.

A study cited statistics showing that the global e-commerce industry stood at $1.15 billion in 2013 and is projected to increase at a compound annual growth rate of 101.4 percent in 2013 to 2018.

The road map has drawn recommendations “classified according to the six I’s or the key areas highlighted in the Asia Pacific Economic Cooperation (APEC) Digital Prosperity Checklist.”

These key areas are infrastructure, investment, innovation, intellectual capital, information flows and integration.
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