by John Mark V. Tuazon

Doing business electronically has for several years evolved with the steady growth of Internet penetration in the Philippines. Janette Toral, one of the local pioneers and advocates of e-commerce in the Philippines, reports in her book “The Digital Filipino” that many Filipino businessmen have been practicing e-commerce since the emergence of computers and telecommunication technologies, bolstered further by the emergence of commercial Internet in 1994.

Since then, online businesses slowly mushroomed from various locales in the country and around the world, hampered only by the dot-com bust of 2001 upon the collapse of the digital marketplace. Following this tragic detour towards further growth, e-commerce in the country slowly yet steadily rose to gain a respectable amount of adoption.

“The e-commerce climate in the country is healthy and growing,” remarks Reggie Bundang, owner and originator of RegaloService.com, a digital gift delivery service and one of the thriving online businesses in the country. “But the state of e-commerce in the Philippines is still in its infancy, although it will eventually reach maturation over the next few years.”

Setting up her own online business didn’t come naturally for Bundang. Around two years ago, pregnancy practically uprooted her from her nine to five product management and marketing job at a private corporation. “I wanted to start a business that I can do from home and is practically similar to what I was doing in the corporate world,” she explains.

Driven by an immense amount of free time and her passion for shopping online, Bundang decided to establish her own online business that catered to those who wanted to send gifts to their loved ones. “I liked the idea of doing an online business because at the heart of it, it’s much less of having a lot of technical background than strategic marketing, which is what I used to do,” she shares.

Setting up shop

RegaloService.com started out as a simple venture in October 2006. Before Bundang’s modest investment flew off the ground, she was concerned with two things first: finding a web developer and looking for merchant partners.

“I have already done my business and marketing plans,” Bundang says, “but finding a developer was another matter. I had to find someone who’s affordable yet capable of properly executing the job.”

Bundang found the perfect developer partner in SME.com.ph, a local group developing interactive websites specifically targeted at SMEs, which offered to do the backend and front-end of her firm’s website for a nominal price. “It took a while for the development of the site to finish but after 5 months, it was already accessible,” she relates.
After setting up the foundations of her e-business, Bundang went on to scour for supplies to fill her shop. “You wouldn’t want users going into your store and see nothing to purchase, right?” she quips.

RegaloService.com’s primary selling point, Bundang narrates, is acting as a middleman for online shoppers and hard-to-find gift items. For this reason, she initially wrote pitches for already-established brands in order to gain a pull of the market.

“But eventually, as the site grew in popularity, the suppliers are now the ones who come to us to offer their products,” she says. The site, according to Bundang, carries an assortment of choices that practically anyone can give as a gift—from toys to flowers, from books to clothes, from the ordinary to the inexplicably expensive. “Right now we’re even offering motorbikes as gifts,” she relates in between laughs.

“But we really choose our products well before posting them to the website,” she clarifies. They don’t want incidents where customers would receive orders that look very different from the photos posted online, she adds.

RegaloService.com’s purchasing process begins when a customer places an order, Bundang explains, “after which, we get the product from the supplier and send them to the customers.” Bundang adds, “we’re like a gift shopper. We do the shopping for you.” A separate option on their website—the Gift Shopper—will look for a specific product a customer is looking for that is not posted on their website, but comes with an added shopper’s fee.

Pricing, meanwhile, is determined upon negotiations with various suppliers. “We don’t put a percentage amount on top of our deals for profit,” Bundang clarifies. “Pricing varies depending on the negotiations with the suppliers, the quality of the product and the discounts given by our partners.”

Delivery, on the other hand, is handled personally by Bundang’s staff, composed of three personnel and a driver, if the order is placed within Metro Manila. “But our provincial and international deliveries are handled by couriers and logistics providers,” she notes.

Online peddling

Unlike in doing business in the real world where random passersby get a chance to notice the opening of a certain shop, Bundang had to practically “peddle” her store to online users through online marketing and search engine optimization.

“I bought AdWords from Google so that the site would place well in search engines,” she remarks. “I also set up a blog to be able to post website updates as they come.”

Fueled by the vast potentials different Internet tools offer, Bundang took things a step further by asking her friends and colleagues to blog about the online store. “The bloggers really helped because their articles are easily found on search engines, and their content stays there forever,” she points out. Bundang is only happy to note that most of the hits she gets from the site come from search engines. “The SEO really worked,” she says.

“We’re happy with what’s happening,” Bundang declares. What started out as an online shop targeted at oversears Filipino workers (OFW) looking to send gifts to their relatives in the Philippines has become a promising domestic venture as well. “Right now, our market is composed half-and-half of OFWs and local consumers,” she discloses, adding that her subscribers are mostly women aged 25 to 45. Majority of their customers, meanwhile, come from the United States and Australia. “But it’s surprising that even though there are a lot of OFWs in the Middle East, we do not hold a significant share of the market there,” she reveals.

Traditionally, the revenue-generating seasons of Valentine’s, Mother’s Day and Christmas appeal to most companies, because such is the time when consumers spend their disposable incomes with abandon. The same rings true for online businesses, says Bundang. “Christmas is typically our busiest season,” she relates. “It is a time when we hire extra staff to handle the outpouring of orders. We also receive offline orders during Christmas.”

Securing payments

One of the inhibitors of e-commerce growth in the country is the lack of secure and reliable payment gateways locally, Toral mentioned in the same book. That is why Bundang enlisted the service of an international payment system—called 2checkout.com—upon the recommendation of her web developer.

“Security is a priority for any online business, and so far, we are impressed by 2checkout.com’s strictness regarding online fraud,” she says. “Their remittances are on schedule as well.”

To open up their business to a wider market, Bundang says she is looking into employing a local payment gateway called Yehey’s Kaban. “We want to be accessible to more consumers. Yehey’s Kaban will enable us to receive payments from ATM, Debit cards, and mobile payment gateways. Let’s admit it, not everybody here owns a credit card,” she clears out.

Birthing pains

It is exactly the issue of online payment security which hindered most online businesses to take flight, Bundang notes. “People are generally uncomfortable about transacting online,” she says. “But over the three years that we’ve been selling goods online, I’d say the outlook has slowly changed.”

Because of such negative perceptions, the return on her investments took quite a while. “We receive a modest profit, but compared to cart businesses, our ROI took a bit longer, around a year and a half to be exact,” she narrates, attributing the vast accessibility of traditional businesses for their quick ROI. “That is why we need to have a continuous educational campaign regarding the benefits and safety of online payment,” she adds.

Optimistic outlook

With the gains they garnered through their first venture, Bundang says they are looking into expanding the business to cater to other audiences. “We’re thinking of launching a new website, which will offer food for delivery this time,” she says, adding that they have already negotiated with two caterers to provide them with supplies.
Bundang’s venture into online business got her more in touch with the dealings of the Web. “Establishing an online business—even if it’s retail—is more of a service. So you really have to make sure that your customers’ experience is pleasant. You have to go the extra mile in pleasing them,” she advises.

Her advise to budding entrepreneurs? “Get yourself immersed in your business, and everything else will follow,” she concludes.

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