More companies are encouraged to venture into e-commerce as the bulk of customers continue to buy a product or service online with free delivery still the primary driver for their purchase.
“…Instead of spending money on advertisements, one of the ways that they can do it is to align their advertising budget for free delivery, subsidize the delivery costs and consider it as part of acquisition cost,” i-Metrics Asia-Pacific Corporation co-founder Janette Toral said in a webinar.
Apart from free delivery, Toral said two-thirds of customers are researching before they make a purchase.
“Social networks remain to be the number 1 for brand research,” she said, adding that digital advertising spend, including for search and social media, has surpassed those for offline channels.
She cited the We Are Social 2023 report showing that a lot of people use mobile wallets for payment, noting the share of business-to-consumer (B2C) e-commerce transaction volume attributable to cash-on-delivery is no longer huge.
In terms of consumer goods categories, Toral said all sectors are growing, except for furniture and electronics which post slight declines.
“But if you will notice, for fashion, for toys, hobby and DIY (do it yourself), for physical media, for beverages, for food, and for personal and household care, there is still an increase,” she added.
As the economy has further opened up, Toral said the travel sector also experienced a significant growth, indicating revenge spending emerged given increase in online spend on travel and tourism services.
Meanwhile, Toral sees Generation Z having a “heavy influence” in the market in the next five years.
“But right now Gen Y is dominating. In the first 10 years of the internet, Gen X boomed but now, we can see that the market behaviors, even behaviors of our economy, Gen Y has huge influence now,” she added in mixed English and Filipino.
Gen Y or the millennials are those born between 1982 and 1994, while Gen Z are those born between 1997 and 2012.