Malls, blockchain, and FMCGs: Predictions on the Philippine ecommerce space

This is the third of a three-part series tackling discussions during the Tech in Asia Manila Chapter meetup on the state of ecommerce in the Philippines. You can read the first and second part here and here.

Ecommerce is undoubtedly a game-changer in the Philippines, where the mall culture is strong, transactions are cash dependent, and fast-moving consumer goods (FMCG) companies are dominant.

But just how much change is the industry making? Per the panelists of Tech in Asia’s most recent Manila Chapter event, it is clear that the answer is less about market disruption as it is about improving the way Filipinos make payments and purchases.

Working with brick-and-mortar stores

The ecommerce industry often ties in with the end of brick-and-mortar establishments. In the Philippines, where many of these establishments are housed in malls, the future of the malling culture comes into question as well.

However, the panelists shared a different view on what ecommerce means for malls and physical stores in the Philippines. “What we’re seeing is that malls—in terms of what you can do in a mall—it’s transforming,” says Bjorn Pardo, founder and CEO of Xend Business Solutions, Inc. “I’m sure everyone here knows that you can do everything in the mall. You don’t see that everywhere in the world.”

Ecommerce is not driving malls to extinction; it’s driving them toward transformation. As Paolo Azzola, COO and managing director of PayMaya Philippines, points out:

“Malls don’t really compete with ecommerce, but more with public spaces. People will still have to go to spaces to hang out. Ecommerce, to me, is the answer for an economy like the Philippines (and others like it) to win the initial battle toward the customer’s heart in terms of ease, and then for those companies to backfill the space into the physical space.”

Azzola cites an example: Alibaba and Amazon’s progressive movement into the physical space after establishing a presence online. The COO says to expect similar scenarios in the Philippines.

But not all brick-and-mortar establishments can escape competition with online businesses. To adapt to the entry of these companies, Abbie Victorino, the founder and CEO of StyleGenie, says, “Brick-and-mortar business owners should actually think [of] changing the experience inside malls, and not just follow the traditional way of putting [up] a brick-and-mortar business.”

Transforming the customer experience does not mean working exclusively online or offline. As Ash Mandhyan, head of client solutions for Facebook Philippines, says, “If you’re offline right now, be online, [and] if you’re completely online, consider becoming offline as well.” This strategy is an extension of what the big online platforms like Alibaba and Amazon are doing to integrate into physical spaces.

The offline experience has its strengths, especially in the Philippines, and the future of brick-and-mortar establishments is going to be one of collaboration with ecommerce. “There’s going to be a lot of interesting things happening soon, where you [will] see ecommerce and offline working together,” says Pardo.

Vision of a cashless ecosystem 

The future of cryptocurrencies and blockchain in relation to ecommerce is an unavoidable question, and the answer lies in the efforts of the industry to develop a cashless ecosystem for the economy.

As Jean-Francois Darrell, chief analytics and risk officer of Mynt, puts it, “Blockchain as a technology is something that we are exploring as a priority because if you want to be a payments [service] and create a cashless ecosystem, [your] enemy really is cash.” He went on to say that cash is both more costly and not as secure.

FMCGs join in 

Spelling success for FMCGs in ecommerce