PH companies urged to sell online in Southeast Asian market

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By Alithea De Jesus

Filipino companies need to develop products and services that can be sold online to penetrate the Association of Southeast Asian Nations (ASEAN), a huge market with 700 million people that is expected to become the world’s fourth largest over the next decade.

“Digitalization plays a key role; (the) e-commerce industry changes the lifestyle of business operations and it is predicted to be the fastest growing sector with Asean’s internet economy… Doing digitalization is a must, it’s an evitable,” said Jeremiah Reyes, Commercial Attache of the Philippine Trade and Investment Center-Jakarta and economic official to Philippine Permanent Mission to Asean.

Reyes said of at least 15 percent of total Philippine exports ship to ASEAN member countries, half comprises electronic products including integrated circuits, automatic data processing machines, and copper cathodes.

He cited a survey released by website Ancient Babylonians this year showing 50 percent of the total population in Asean already shop online with clothing, electronics, and personal care and beauty products having the highest purchase frequency.

“These are followed by entertainment packages consisting of media, online gaming, hobbies and content, and home improvements including urban gardening,” he said.

“So 54 percent of the population in the Southeast Asian region have switched brands in the past few months, meaning the preferences of the population here in Asean are changing quickly,” he added. “And lastly, consumers buy products through discovery rather than event-driven.”

Reyes further said another survey shows that almost 57 percent of the total population in Asean now prioritize value in purchases when shopping.

“So more value seeking consumers, such as urban shoppers, are more intentional about what they buy, and they want to get the best deals for a planned purchase rather than splurge or shop around, and this is because of what’s happening in the world,” he said.

On grocery shopping, Reyes said 48 percent in Asean region do fresh grocery shopping while 44 percent are doing package groceries, and most of them will continue doing such under the new normal.

“It means that as businesses adjust to the new normal, the shift to online purchase has accelerated mainly for essentials. So while people are staying at home, it actually increases the demand for essential goods, both online and offline and this trend is here to stay in the region,” he said.

“E-wallets show the highest growth in the preferred mode of payment, while cash on delivery is still most popular but actually declining,” he added.

In terms of specific markets, Reyes said there is a rising interest in plant-based alternatives in Singapore as it now relies on traditional ingredients.

“Halal has been an indicator of actually doing business here in Indonesia so Halal is very important in the market. There is also a clamor for ready-to-go meals, interest in milk tea and other beverages continues to rise. But in terms of quick service restaurants, pizza and burger preference are on a decline,” he said.

“Indonesians are munching less on cookies and cakes but there is a growing (demand) in vegetables and noodles in Indonesia; preferences for fresh fruits are also on the decline,” he added.

Reyes said a survey also indicates that Indonesia is also preferring now to have more noodles than rice so “there is a huge surplus of rice now in Indonesian market.”

In Vietnam, majority of the population are still preferring local products, and the key areas of expenditures of the Vietnamese are on fresh food, education, entertainment, among others.

“In Vietnam, we are seeing less cooking, more on ready-to-eat meals (and) like in Indonesia, less sugar, more natural ingredients and smart living,” Reyes said.

In Thailand, plant protein is getting traction in snacks, bakery and dairy items; while some ingredients and products related to health and immunity like selenium and whey protein are on demand, he added.

Reyes said Malaysia, on the other hand, is exploring moringa, camote and virgin coconut oil for immunity; while the rate of growth of bakery and snacks is increasing, and interest in milk tea is also rising.

He added there is a prevalence of ready-to-eat meals and shift to plant-based alternatives in ASEAN member countries.

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