Inanc Balci, CEO and Co-founder, Lazada Philippines: Interview

Interview: Inanc Balci

Which regulatory areas require overhaul and fine-tuning for the local e-commerce industry to realise its growth potential?

INANC BALCI: The e-commerce market presents two challenges in the Philippines. The first one is logistics related; the second one is payments related. It would help if the regulatory framework governing these two areas is updated. However, we support the current momentum in the government to resolve these issues, and we are very optimistic regarding developments in the near future. These changes will contribute to foreign direct investment and encourage local players to invest in logistics, thus launching the upgrade of the Philippines technology infrastructure. Regarding electronic payments, the Philippines is primarily a cash-based economy, with 30% banking penetration and 6% card penetration. E-commerce companies and other stakeholders are working together with the government to increase penetration of electronic payment platforms.

Major updates to current regulations, including the Know Your Customer rules and National Retail Payment Systems, as well as banking regulations, are crucial in encouraging citizens to engage in e-payments. The merger between BancNet and MegaLink – two major ATM networks – is an example of very positive initiatives for cheaper transactions that will go on to benefit all bank clients.

What impact will the National Broadband Plan and efforts to improve internet speed and connectivity have on the archipelago?

BALCI: The quality and speed of the internet in the Philippines are quickly improving. Of course we want to contribute as much as possible in order for the National Broadband Plan to roll out even faster. Free Wi-Fi hotspots are one of the cornerstones of the project, allowing less affluent segments of the population access to the internet, especially those for whom the cost of broadband and mobile data is prohibitive. Furthermore, the lack of a powerful internet connection has a direct impact on the expansion of the e-commerce ecosystem.

The availability of broadband and online purchases are highly correlated, with low loading speed being a limiting factor for e-commerce businesses. Statistics in the Philippines show sales peaks occur during office hours, with lower demand on the weekend, exactly the opposite of how the markets in European countries function. This means consumers take advantage of a more satisfying internet connection outside their home. For these reasons, e-commerce businesses and stakeholders are in full support of What opportunities will e-commerce platforms BALCI: The e-commerce segment presents substantial opportunities in the Philippines because it provides a level playing field for all. Personal connections or economic superiority do not give a decisive advantage. All players are, therefore, exposed to the E-commerce platforms therefore offer considerable entrepreneurial opportunities in South-east Asia. The low-capital expenditure allows businesses to set up and enter the market with much lower risk than traditional brick-and-mortar marketplaces. The development of the local e-commerce ecosystem is similar to what happened in China a decade ago. E-commerce penetration helps the country because it is a more efficient way to do business. This is why we work with the government to enhance growth within small businesses; it is our belief that they will drive overall economic growth more than large companies will. There are significant opportunities for third-party services to complement e-commerce platforms and boost the ecosystem as it grows.