<p><span style="font-weight: 400;">The Philippines e-commerce landscape is robust, with strong global and local players dominating the market. Filipino mobile and internet use continues to grow at exceedingly high rates, and combined with increasing options for online payment, the Philippines e-commerce market is quickly maturing at par with other Southeast Asian countries. According to research, the Philippines is expected to have an annual growth rate of 101 percent between 2013 and 2018. </span></p>
<p><span style="font-weight: 400;">In this article let’s take a deeper look into the 3 major players in the Philippine e-commerce market.</span></p>
<p><b>Lazada</b></p>
<p><span style="font-weight: 400;"><a href="http://www.demystifyasia.com/lazada-vs-zalora/">Lazada</a>, known today as Asia’s premier online marketplace, was founded in 2011 by Rocket Internet with the intention of replicating Amazon’s business model but catering to the Southeast Asian region. Rocket Internet discovered a niche with weak presence of Amazon in the region and the robust online consumer market. To date, Lazada’s investor base includes Rocket Internet, Summit Partners, Temasek Holdings, Tengelmann Ventures, Alibaba, Access Industries, HV Holtzbrinck Ventures, Investment AB Kinnevik, Tesco, and Verlinvest. In 2015, the Lazada Group reported that it was poised to reach $1B in sales with 5.7 million customers. The website offers a wide array of products that include clothing, gadgets, jewelry and accessories, furniture, toys, media and books, and luggage. The online shop carries some of the world’s biggest name brands as well as locally made products. Lazada’s payment options currently include cash on delivery, credit card, debit card, PayPal, and helloPay. Lazada works with LBC, an established name in local and international courier services and is thus easily able to fulfill its promise to deliver on time. The website claims that deliveries arrive within 1-7 business days for customers in Metro Manila, and because of LBC’s established courier services, there are hardly any logistical issues for delivery. On the other hand, for deliveries outside Metro Manila, Lazada orders usually arrive between 5 to 12 business days. Philippine customers can easily track orders online, and Lazada also provides automated text and email updates to customers. Lazada offers a unique 100% Buyer Protection program wherein customers can return the item 7 up to 14 days starting 24 hours after the customer has received the item. Customers may also opt for reimbursement and refund for various products purchased from the site, provided that these conditions are in line with the company’s policies which are clearly communicated on the website. </span></p>
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<p><b>Zalora</b></p>
<p><span style="font-weight: 400;">Zalora was established in 2012 also by Rocket Internet, and today is a leading fashion portal serving the Asia Pacific region. Zalora was created as a spin-off of Zappos, an American online fashion portal. Zalora’s investor base currently includes Rocket Internet, Access Industries, Investment AB Kinnevik, JP Morgan Securities, Len Blavatnik, Scopia Capital, Summit Partners, and Tengelmann Ventures. In 2015, Zalora reported $234 million in revenue although they will be letting go of Thailand and Vietnam, two markets that continue to be unsuccessful. Central Group, one of the largest retail companies in the region, was reported to have expressed interest in buying the 2 businesses from Zalora although neither party have confirmed. The website offers fashion and beauty accessories for men, women, and children featuring an in-house label and dozens of international name brands. Payment options currently include credit card, cash on delivery, bank transfer, Me Pay, and PayPal. Zalora ships items to customers in Metro Manila between 1 to 3 business days, and 2 up to 7 days for provinces. International shipments from neighboring countries take 12 up to 19 days to arrive in the Philippines. Text and email updates are automatically sent to customers regarding the status of their delivery. Zalora is also well-received in the Philippine market because of their refunds and returns policy which was previously unheard of with other brands. Zalora offers free and easy returns within 30 days upon purchase; the only requirement from customers is to fill out a return slip and the item will be picked up via the brand’s courier in selected cities across the country. The customer also has the option of dropping off the item for exchange at selected couriers. A customer can also easily request for a change in an item’s size or color with a few clicks on the website. </span></p>
<p><b>OLX</b></p>
<p><span style="font-weight: 400;">OLX is the Philippines’ premier online classified website where users can create ads and post them on various social networks. The website was originally sulit.com.ph but in 2014 was rebranded to OLX Philippines. Sulit was launched in 2006 by founders RJ and Arianne David. In 2009, foreign company Naspers purchased 51% of Sulit, a move that catapulted the website into the number 1 most visited site in the Philippines.</span></p>
<p><span style="font-weight: 400;">The Sulit team started out with just 5 individuals, which included the couple and 3 of their friends who acted as forum moderators. After Naspers bought majority of Sulit, the team grew to 50 and soon, Sulit was a household name. The company had a large marketing budget and began advertising on billboard, TV commercials, and buses as well as various digital campaigns on social networking sites and Google. The group continued to expand, but with little revenues coming in from direct ads and more profit coming in from Google they continued to operate at a loss. Aggressive competitors such as eBay and AyosDito threatened the business, despite Sulit winning 60% of the market share.</span></p>
<p><span style="font-weight: 400;">In 2013, Sulit’s founders announced that a merger with OLX, a leading international classified ads platform and also one that was partially owned by Naspers. OLX was founded in 2006 by Alec Oxenford as a classifieds site with a global presence which is especially wildly successful in India, Brazil, Poland, and other emerging markets. As majority owner, the merger was orchestrated by Naspers who already had a different vision for the brand. The vision of OLX is to help its users earn extra money by selling items on the site that they no longer use, while giving others users a chance to buy a product at great value. Users on the site sell both second hand as well as brand-new items, as buy-and-sell is a popular way for Filipinos to earn extra cash by purchasing products in bulk or at lower rates then reselling them with a margin. </span></p>
<p><span style="font-weight: 400;">Sellers post pictures and relevant details on the product on their ad, and are also encouraged to include their reason for selling if it is a second hand product. Site policy discourages bank payments and encourages meet ups or cash on deliver (COD) so that buyers have the opportunity to inspect the product before making the final purchase, oftentimes by handing money directly to the seller as their information is posted on their ad. OLX also highlights the importance of safety during meet ups; as the policy page indicates that individuals should agree only to meeting in public places during daylight and warns against requests to meet in unfamiliar locations.</span></p>
<p><span style="font-weight: 400;">Because of the business model, OLX doesn’t offer any online payment methods such as credit and debit cards or PayPal. Posting an ad is completely free of charge, but sellers have the option to pay for featured ads to obtain better visibility on the site.</span></p>
<p><span style="font-weight: 400;">OLX operates differently from Zalora and Lazada because its business model is based on buy-and-sell, which means that customers can post ads and sell products in different categories including real estate, clothing, automobiles, jobs and services, gadgets, hobbies, and pets. Since OLX only earns from promoted ad listings, there are no return and refund rules as these should be settled during communication between buyer and seller. </span></p>
<p><span style="font-weight: 400;">To date, OLX has 260 million active users per month and serves 40 countries. </span></p>
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<p><span style="font-weight: 400;">Conclusion</span></p>
<p><span style="font-weight: 400;">There are several considerations that need to be analyzed in determining the success of an e-commerce website. Below are some metrics: </span></p>
<table>
<tbody>
<tr>
<td></td>
<td><span style="font-weight: 400;">Lazada</span></td>
<td><span style="font-weight: 400;">Zalora</span></td>
<td><span style="font-weight: 400;">OLX</span></td>
</tr>
<tr>
<td><span style="font-weight: 400;">Country rank </span></td>
<td><span style="font-weight: 400;">7</span></td>
<td><span style="font-weight: 400;">101</span></td>
<td><span style="font-weight: 400;">11</span></td>
</tr>
<tr>
<td><span style="font-weight: 400;">Total visits</span></td>
<td><span style="font-weight: 400;">53.9 million</span></td>
<td><span style="font-weight: 400;">2.10 million</span></td>
<td><span style="font-weight: 400;">14.9 million</span></td>
</tr>
<tr>
<td><span style="font-weight: 400;">Bounce rate</span></td>
<td><span style="font-weight: 400;">56.84</span></td>
<td><span style="font-weight: 400;">40.94</span></td>
<td><span style="font-weight: 400;">26.78</span></td>
</tr>
<tr>
<td><span style="font-weight: 400;">Direct traffic</span></td>
<td><span style="font-weight: 400;">42.39%</span></td>
<td><span style="font-weight: 400;">30.49%</span></td>
<td><span style="font-weight: 400;">43.41%</span></td>
</tr>
</tbody>
</table>
<p><span style="font-weight: 400;">As the 7</span><span style="font-weight: 400;">th</span><span style="font-weight: 400;"> most popular website in the Philippines and having the highest number of total visits, it is clear that Zalora is winning in terms of online popularity. However, the Zalora bounce rate remains rather high, which means that users tend to leave the site faster after only viewing one page, thereby not winning the race on ecommerce market share. </span></p>
<p><span style="font-weight: 400;">Zalora clearly needs to beef up its online marketing strategies and offerings. With just 2.10 million total visits, Zalora has a lot of work to do to even catch up with the visitor figures of OLX. Considering that both companies are owned by Rocket Internet, it is clear that the strategies of Zalora needs beefing up. </span></p>
<p><span style="font-weight: 400;">The recent reports of Zalora’s losses indicate that the group needs major realigning of its business strategies and it may take a while for them to reach the success level of its big brother Lazada. When considering customer base and total reported revenues, perhaps the most important metric, Lazada emerges as the clear winner. Not much is to be said about OLX in profit as the site earns from sponsored ads and is primarily free to use. While OLX’s mother company serves more countries than both Zalora and Lazada and remains to be the 11</span><span style="font-weight: 400;">th</span><span style="font-weight: 400;"> most popular website in the Philippines, it is evident that Lazada is the clear reigning e-commerce giant in the country. </span></p>

The Philippines E-Commerce. Lazada vs. OLX vs. Zalora
