'Trust' issues hold back Philippine e-commerce boom

Katrina Domingo, ABS-CBN News

Posted at Sep 23 2017 05:50 PM | Updated as of Sep 24 2017 11:09 AM

A Transportify van completes a delivery in Manila. Jonathan Cellona, ABS-CBN News

MANILA - A distrust of accountability in the online retail space is hampering the industry's growth, with more customers still opting to pay in cash, a delivery service operator said.

Transportify estimates 80 percent of online shoppers prefer cash on delivery, said co-country manager Paolo Bengson. The Philippine Retailers Association, on the other hand, said only 1 to 2 percent of its transactions are made online.

Filipino consumers feel that "when the seller suddenly stops selling or you get conned, you have nowhere to complain to," Transportify's other co-country manager Noel Abelardo told ABS-CBN News.

"Lack of online payment systems and logistics is also a problem, but trust affects the entire system," Bengson said.

Bengson said more consumers would be lured to online channels with the entry of Chinese e-commerce giant Alibaba, which partnered with Globe Telecom's Mynt. Alibaba also recently boosted its stake in Southeast Asian e-retailer Lazada.

Local conglomerates have also begun investing in logistics and delivery services that they can use for their own e-commerce forays, Bengson said.

Mall operator SM Investments recently acquired a minority stake in shipping firm 2GO Group Inc, while Manny Pangilinan's Metro Pacific Investments Corp. bought Ace Logistics Inc. for P280 million.

Online platforms host sellers are also improving controls to flag bogus vendors, Abelardo said. 

"The overarching goal is trust but there are elements to build that trust. You see these small steps into the building blocks," Bengson said.