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PurpleBug Study - E-Commerce & The Filipino Consumer

This report covers the general behavior of Pinoy online shoppers in terms of their main reasons for shopping online, budget limitations, and shop biases. There is also a thorough discussion on the general behavior of non-online shoppers, particularly on why they donu2019t shop online and what will make them shop online. Lastly, this report presents key insights concerning the activities of Pinoy shoppers before adding to their carts and after making their purchases.

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PurpleBug Study - E-Commerce & The Filipino Consumer

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  1. E-Commerce & The Filipino Consumer A study by Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  2. AGENDA PROFILE OF THE RESPONDENTS ONLINE vs. NON-ONLINE SHOPPERS E-COMMERCE CONSUMER BEHAVIOR BEFORE ADDING TO CART AFTER PURCHASING THE PRODUCT WRAP UP & MOVING FORWARD Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  3. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY Gender Age Generation PROFILE OF SURVEY RESPONDENTS Male 23.91% Baby Boomer (57 to 75) 8 Generation X (41 to 56) 21 Millennial (25 to 40) 71 Female 76.09% Generation Z (24 and below) 38 Location Mindanao 7.25% Monthly Income (₱) Visayas 2.90% ₱219,141 and above 2 138 responses 138 responses were gathered via an online survey from May 26 to June 4, 2021. ₱131,485 to ₱219,140 0 ₱76,700 to ₱131,484 5 Metro Manila 52.17% ₱43,829 to ₱76,699 9 Luzon 37.68% ₱21,915 to ₱43,828 30 ₱10,958 to ₱21,914 46 Less than ₱10,957 46 Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  4. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY DEVICES AND INTERNET USAGE # of Internet Access Methods # of Internet Devices Used All 4 11 3 modes 6 At least 3 27 2 modes 49 At least 2 47 Only 1 53 Only 1 mode 83 Type of Device Type of Access 53 out of 138 53 out of 138 respondents respondents access access the internet through just 1 1 device and device and for most people most people, that device is a smartphone smartphone. 83 out of 138 83 out of 138 respondents only respondents only have 1 mode 1 mode of accessing the internet; for most people people, they prefer using mobile data mobile data. 134 94 77 68 most 43 28 27 Smartphone Tablet Laptop Desktop DSL Fiber internet Mobile data Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  5. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY Primary reasons for not shopping online ONLINE SHOPPING FREQUENCY Doesn't allot money for online purchases 3 Cannot test/try on the product 3 Internet connection is not good enough 2 No access to the available payment methods 1 Doesn't want to try e-commerce 1 Cost of shipping is high 1 No 7.97% Drivers that would make people try e-commerce Loyalty program 4 Yes Free or discounted shipping 4 92.03% Better prices 4 Broader selection of products 2 Out of 138 consumer respondents, about 92% 92% are online shoppers online shoppers who belong to the younger generation—Gen Z Gen Z and Millennials Products are with available stocks 1 Wider range of product categories on a… 1 Millennials). Not fond of shopping online 1 Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  6. E-COMMERCE SHOPPING BEHAVIOR Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  7. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY FILIPINO ONLINE SHOPPERS: A DEEPER LOOK How often do you shop online now? 61 30 Most consumer respondents are already Most consumer respondents are already avid online shoppers even before the avid online shoppers even before the COVID COVID- -19 pandemic. 19 pandemic. 19 4 13 At least once a week At least once a month At least once every quarter At least once every 6 months Only during big online events/sales When did you start shopping online? How much time do you spend shopping online? 73 58 52 23 21 10 Just recently/ less than 3 mos. 3 to 6 mos. 6 mos. to 1 yr. Before the pandemic happened 10 7 Less than 1 hr 1 to 2 hrs 2 to 3 hrs More than 3 hrs Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  8. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY Reasons for Shopping Online E-Commerce Platforms Often Used Shopee 121 98 Convenience Lazada 108 95 Promos and vouchers Convenience Convenience, promos/ promos/ vouchers vouchers, and health health safety are the top reasons for shopping online. Health safety reasons due to COVID- 19 Grab 79 88 FoodPanda 58 74 Affordable/Cheaper price safety In-app online stores 51 67 Good reviews from customers Social media posts 46 55 Points and rewards Restaurant-to-consumer apps/websites 38 46 Product is of good quality Online groccery deliveries services 14 In terms of go- to platforms, Shopee Shopee and Lazada Lazada are at the top, followed closely by Grab. Product is unavailable in physical stores 46 Zalora 14 Product is purchasable via online store only 34 Contact numbers 13 Live streaming/online live selling videos 33 Guaranteed cashback 13 13 Easy return policy BeautyMNL 13 Others 6 5 Entry into competitions Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  9. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY Products Unwilling to Purchase Online Products Usually Bought Online Filipino consumers are the most the most comfortable comfortable buying buying ready- to-eat takeout food online, followed by personal care and beauty products. Electronic devices and accessories 96 Ready-to-eat takeout food are 53 Personal care and beauty products Home appliances, devices and items 79 41 66 Apparels and accessories Grocery food items 34 Home appliances, devices and items 60 None 23 Ready-to-eat takeout food 21 50 Household cleaning items Leisure travel 20 50 Grocery food iteems Personal care and beauty products Electronic devices and accessories 18 48 Sports goods and fitness items 18 Meanwhile, they are unwilling unwilling and hesitant to and hesitant to purchase purchase electronic devices/ accessories and appliances online. 45 Hobby items Subscription products 17 34 Subscription products Apparels and accessories 17 Sports goods and fitness items 28 Baby products 17 27 Baby products Household cleaning items 17 20 Pet accessories Hobby items 13 12 Leisure travel Pet accessories 13 Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  10. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY TOP PAYMENT & DEVICE PREFERENCE Payment methods used Budget allotted for online shopping Consumers typically have a budget of ₱500 to 500 to ₱1,000 for their online purchases and they still prefer the cash on delivery (COD) cash on delivery (COD) method method [due to the lack of developed e-commerce payment systems (Ordinario, 2018) and association to identity theft in cashless transactions (Sanchez, 2020)]. 1,000 114 56 prefer the 72 34 32 46 5 32 24 Less than ₱500 ₱500 to ₱1,000 ₱1,001 to ₱5,000 Above ₱5,000 Cash on delivery Credit/Debit cards E-wallets Mobile Online bank transfers payment apps % online purchases made via smartphone Out of 138 consumer respondents, 53 have made online purchases via made online purchases via smartphone by 76% to 100%, which smartphone by 76% to 100%, which explains why e explains why e- -commerce apps commerce apps typically offer more sale options and typically offer more sale options and bonuses than their web counterparts. bonuses than their web counterparts. 53 53 25 18 16 15 Less than 10% 11% – 25% 26% – 50% 51% – 75% 76% – 100% Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  11. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY TOP PLATFORMS: SATISFACTION RATING Both platforms of Lazada and platforms of Lazada and Shopee and website) received a mean satisfaction rating of a mean satisfaction rating of about 8 about 8 from consumer respondents. However, the app versions have a generally higher satisfaction rating than their website versions (0.25 difference). Shopee (mobile app Mobile App Website mean satisfaction rating: 8.38 mean satisfaction rating: 8.13 37 33 32 32 e- 32 29 15 12 11 7 2 2 7 0 0 0 1 1 0 1 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  12. BEFORE ADDING TO CART Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  13. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY REVIEWS MATTER What channels do you use for research? About three they conduct research about the brand or online research about the brand or online seller/store before checking out seller/store before checking out. three- -fourths fourths of the respondents agree that Online consumer reviews 107 Social media 94 Do you research the brand or online seller/store before purchasing the product? Search engines 57 Brand website(s) 43 61 Word of Mouth 42 44 Vlogs 42 15 Blog articles 22 6 1 0 50 100 150 Strongly disagree Disagree Neutral Agree Strongly Agree Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  14. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY ONLINE CONSUMER REVIEWS: A DEEPER LOOK Do you get discouraged from buying a product that has lower review rates (3 stars below)? 54 46 Based on our results, the quantity and nature nature of your online reviews will make or break you. break you. quantity and will make or 21 3 3 Strongly disagree Disagree Neutral Agree Strongly agree How often do you read online reviews before checking out? Do you get discouraged from buying a product that has few to no reviews? 100 51 44 24 1 2 15 9 5 3 Never Rarely Sometimes Often Always Strongly disagree Disagree Neutral Agree Strongly agree Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  15. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY TAKE CARE OF YOUR SHOP REPUTATION Do you check for seller ratings (for credibility) before checking out? 66 45 4 0 12 Does eco-friendly matter to you? Strongly disagree Disagree Neutral Agree Strongly Agree 40 Do you chat/message the online store/seller (for confirmation) before checking out? 32 24 21 10 52 Never Rarely Sometimes Often Always 29 When asked whether they check if the store is eco friendly friendly, 40 40 out of the 138 consumers would do the inspection. inspection. check if the store is eco- - would do the 19 17 10 Never Rarely Sometimes Often Always Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  16. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY ON COMPARISON SHOPPING Online shoppers check two or more similar shops similar shops before committing to a listing. They do so to check for promos promos or if free shipping is if free shipping is offered. offered. two or more Promos usually availed Discounted promos 106 Free shipping delivery 105 No. of similar shops checked before checking out Buy 1, Get 1 (BOGO) 56 49 Multi-buys 34 43 Multi-save and conditional promos 24 29 11 Doesn't use promo vouchers 14 None At least 1 At least 2 3 and above Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  17. AFTER PURCHASING THE PRODUCT Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  18. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY Do you post reviews to attest the product’s quality and seller’s credibility? BE A TRENDING SHOP FOR ALL THE CORRECT REASONS 60 37 22 5 3 Strongly disagree Disagree Neutral Agree Strongly agree Most consumers agree that they leave a review leave a review post-purchase, attesting to both product quality and the seller’s quality and the seller’s credibility credibility. Do you highly recommend the seller/store to friends and family if satisfied with overall service? 61 56 They also agree that they will extend the reach of their extend the reach of their positive or negative online positive or negative online reviews to offline reviews to offline by sharing to family and friends. 7 3 0 Strongly disagree Disagree Neutral Agree Strongly Agree Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  19. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY ON REPEAT PURCHASES Consumers will Consumers will repurchase an item repurchase an item from the same online from the same online seller/store seller/store if they are satisfied with its overall service based on their based on their previous purchase. previous purchase. Reasons for repurchasing product Enjoyed/Satisfied with the product/service 122 Affordable/Cheaper price 102 Has good customer reviews 87 If satisfied with a product, will you repurchase? Promos and vouchers 69 67 Accommodating customer service 68 53 After-sales service 1 Wants to reorder 1 3 2 2 Strongly disagree Disagree Neutral Agree Strongly Agree Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  20. KEY INSIGHTS AND YOUR TASKLIST Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  21. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY CONSIDER THESE… Lockdowns Lockdowns accelerated of of e e- -commerce commerce in the Philippines (Unnikrishnan and Figliozzi, 2020). accelerated the the growth growth A Facebook study, in partnership with Emerging (2020), showed that 93% of Filipinos highly consider alongside alongside price price online online to save more time. Also, 87% said that they are willing more more for for ease ease of of access access to products or services. However, consumers still cash cash; they see cashless transactions such as credit cards associated with (Masigan, 2020). majority still of Filipino pay pay Trends Research prefer prefer to to in in convenience convenience when when shopping shopping Majority Majority of new new product, product, brand, this this quarantine quarantine, and likely to stick with it. Consequently, intend intend to to shop shop online online more post-COVID-19 (Hutchinson, 2020). of consumers consumers have brand, site, have tried site, or or store tried a a store and PayPal identity theft willing to to spend spend they more, even also Opening your online store: If not now, then when? Now’s the time, but how can you maximize the benefits of e-commerce? Are there limitations? Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  22. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY PROFILING THE PINOY ONLINE SHOPPER They They… … …conduct research store/seller before purchasing. the brand brand or online research on on the …are mostly mostly females the younger generation (Gen Millennials Millennials). females who belong to Gen Z Z and and …get get product if it has lower review rates (3 stars below) and few to no reviews. from buying the discouraged discouraged …shop online at least once and spend at least an for products at Shopee using their mobile mobile phones month, once a a month an hour hour browsing Shopee and and Lazada phones. …check at least two shops/stores shops/stores shipping two or for or more more similar lower price similar online or online free Lazada …allot around ₱500 online purchases via cash on delivery. 000 for their 500 to to ₱1 1, ,000 …leave leave a a review quality and share their experience buying from the store. review to attest to product’s …consider discounted discounted and and advantages of online shopping in this pandemic. convenience, convenience, promos promos safety safety available available vouchers, vouchers, the and and as …likely to recommend recommend the seller/store to their loved ones if the transaction is a positive one. main their their Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  23. E-COMMERCE & THE FILIPINO CONSUMER | A PURPLEBUG STUDY E-COMMERCE DEVELOPMENT & MANAGEMENT CAMPAIGN Opening an online store is beyond creating a website, posting on Facebook Marketplace or joining giant aggregators such as Lazada and Shopee. More than just setting up platforms, the process includes product/ inventory management, promotions, customer service, and PR management. Your road to e-commercialization begins today! Open an online store that earns money with PurpleBug, Inc. ü Gain assets that are fit for the changing times. ü Launch fresh and effective marketing techniques tailored for your products. ü Monitor your reputation and get more people to trust your brand. Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  24. Copyright 2021 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  25. We’ll help you maximize your digital potential! www.purplebug.net Unit 801 Antel Corporate Center Valero Street, Salcedo Village, Makati City Metro Manila, Philippines (+632) 8256 6714; (+632) 8551 0986 inquiries@purplebugmail.net

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