How are online Pinoy retailers faring?

By Erwin Lemuel Oliva, INQ7.net

A recent study on Filipino online retailers that have survived the dot-com crash has shown that it takes more than patience and luck to sell goods online.

A combination of branding, advertising, and technology can spell the difference for some online Filipino retailers, according to a study titled, "Business-to-consumer online commerce in the Philippines" by Asian Institute of Management student Anna Mendoza.

Mendoza presented results of her study at the recent One Internet Day event organized by Janette Torral, founder of DigitalFilipino.com.

The study showed that there are now five active Filipino "outbound" online retailers – KabayanCentral.com, Divisoria.com, TuroTuro.com, TitikPilipino.com, and myAyala.com.

While KabayanCentral.com was the first to focus on selling Pinoy items online back in 1998, the study concluded that myAyala.com proved to have the best formula for attracting more business, despite its later emergence in 2000.

MyAyala.com is the online retail Website equivalent to the brick-and-mortar of Ayala-owned malls.

Mendoza's analysis showed that myAyala turned out to be the top online Filipino retailer by the study’s nine "key success factors" in online retailing.

These key success factors are brand awareness, online presence in advertising, credible reputation, customer satisfaction, reach and coverage, product selection, convenience, company strength, and price.

MyAyala dominated in five out of 9 key success factors, according to Mendoza, leading her to conclude that people still prefer to buy from click-and-mortar firms with a well-established reputation in the real world.

The study also found some interesting facts: a search on words like "Filipino, music, video, books, cd" would most often lead people to Divisoria.com, followed by Kabayancentral.com.

Brand awareness courtesy of online and offline advertising puts the online retailer myAyala way ahead of pure online retailers. "MyAyala is the conly online retailer that has a brick and mortal counterpart and has also the most number of mediums of advertising," Mendoza added.

An extensive selection of products does not translate to more visitors and eventually customers, the study said. MyAyala has clearly dominated in the area of customer satisfaction despite more products found in Kabayancentral.com’s virtual shop.

MyAyala has also been rated as the best in terms of customer satisfaction and support. It was also found to be pricing its products lower than the other online retailers studied. The company however offsets this with high shipping cost, Mendoza said.