D2C Online Stores Continue to Rise in PHL, Asean Study

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DESPITE the health crisis, nothing can stop the growth of e-commerce as e-commerce brands in the Philippines and the rest of Southeast Asia expand their direct-to-consumer (D2C) footprint by opening their own stores on the Internet.

As these companies leverage their existing marketplace to take control of customer journeys, the number of e-commerce stores in the country is expected to grow by 56% in 2022, according to Locad’s 2022 Key E-commerce Trends report.

This development is supported by e-commerce data platform Storeleads, which shows that the region’s market has witnessed a phenomenal increase in the volume of online stores in Woocommerce and Shopify, which translates into growth of 50% and 61% , respectively, from 2019 to 2021.

Online stores registered three years ago were only 6,287, but the platform has seen a significant increase in the number of online stores with 9,554 to 12,731 in 2020 and 2021, as a result. The latter followed the same trend since the number of its cyberstores increased to 3,341 in 2019, rising to 7,792 in 2020, to end at 8,562 last year.

Locad Co-Founder and CEO, Constantin Robertz, explained why this trend is set to be in full swing this year and that the gains of e-commerce brands moving to D2C will continue: ‘As new brands emerge with strong product value in all categories, [and] challenge the incumbents.

Robertz added, “For successful brands, a [D2C] approach is a transformational opportunity offering higher margins, more customer insights and greater control over the brand experience. »

The company found that search volumes on merchant and seller related queries consistently increased up to 18x compared to 2017. This could be attributed to the increase in the number of D2C brands joining the commerce bandwagon. electronics, based on his study.

As consumers prepare for an eventual retail recovery, Locad takes stock of key D2C insights and trends to embrace this year.

With the easing of Covid-19 restrictions, the company expects many retailers to continue to follow the D2C digital path to establish their brand and attract more and more online shoppers.

As social media plays into the e-commerce space, video content that drives online traffic will play a crucial role in consumer spending. In fact, it has dominated social media platforms such as Facebook, YouTube, Instagram, and more recently, TikTok.

Locad’s research identified video as a pressing factor, with half or as many as 50% of Southeast Asian consumers surveyed indicating that a video they watched affected their purchase decision.

Video shopping or video content to promote products and services is becoming popular all over the world. It is gaining momentum in the Philippines, with the popularity of live sales, unboxing and tutorial video content that D2C brands rely on, either on their websites or social media portals.

Based on Locad’s 2022 estimates, customers will not only focus on fast delivery, but will also opt for online retailers that have a reliable return policy. The company is preparing for this emerging trend by linking up with other brands that can make delivery more efficient, reliable and secure.

As the Asian region and the Philippines slowly return to the new normal, the growing e-commerce industry will face challenges such as supply chain issues and higher consumer expectations. Nevertheless, brands that have a D2C strategy can position themselves strongly to thrive in their markets.



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