If you have been to the 4th PICS conference last Oct. 25, you would have realized that we only have 1.1 Million regular internet users which is only 1% penetration versus mobile phone of an estimate of 20 Million subscribers and accounts for 30% penetration. The AC Nielsen report on Online Consumer Trends in the Philippines (for the 2nd Half 2004) by Bing van Tooren, was very insightful and gives a realistic view of the potential of eCommerce and Internet in the Philippines. I would like to share some of my insights on the report and what would this mean for potential marketers:
1. One Million Pinoy Bloggers. Bloggers by definition belongs to this “regular internet user” category which is defined as person who goes online multiple times a week, and responsible for most online consumer activity and integrated internet into his lifestyle. So, the market potential for blogging in the Philippines is only 1.1 Million which in absolute terms ahead than Singapore and Malaysia. This increases by 7% on average on a year on year basis.
2. Mobile is the Sachet Version of the Internet. It is clear that the Internet serves the class A and B of society which only represents <10% of the population. Mobile arguably already penetrates the class C and urban D of society to get into 30% penetration of the population. We need to have more of the internet services available via mobile services in a cheaper and more concise form. The next frontier for Smart and Globe is how to increase the mobile penetration and make the service cheaper and available to low income consumers.
3. The Pinoy Internet Generation is the Online King. Babies born in the 1970’s are the pinoy internet generation who was first introduced to computers during their high-school at the latest, and integrated the internet in their lifestyle during their college years or their yuppie days. These are people who have their own monthly income and have the propensity to buy online due to their own buying power. It is very important to understand the needs and wants of this target consumers and meeting them would be your competitive edge.
4. The future is in the Youth or the Friendster Generation. 30% of regular internet users are less than 25 years old who although would have high household income, they would have a low individual buying power. The main concerns of these people for engaging in online shopping is the lack of credit cards and 1 out of 10 would have purchased online. Also, economic situation in the country would have an impact to these people and I would assume that these are the generations that get easily attracted by overseas opportunities.
5. Business Opportunities for Books/ Educational Softwares and Computer Hardware/ Gadget. Online credit card payment security for the Philippines sites needs to be addressed to give confidence and promote online shopping. It should offer convenience and cost competitive price for people buying over the internet. Educational Information and the means to get the information via PC/ Gadgets would continue to be the key business opportunities that can leverage the internet in the Philippines.
These are just some of my top line thoughts and let me know if you would have additional perspective on this topic.