ALPHABET’S YouTube and e-commerce platform Shopee said on Wednesday (Sep 18) they were launching an online shopping service in Indonesia and planned to expand it in South-east Asia as competition picks up with a rival operator owned by TikTok.
Under the YouTube Shopping tie-up, people will be able to purchase goods viewed on YouTube through links to Shopee, which is owned by South-east Asian technology conglomerate Sea Ltd. Company executives told reporters they plan to expand the service to Thailand and in Vietnam in a few weeks. YouTube Shopping is already active in South Korea and the US.
Indonesia’s “energy and velocity around online shopping” is what prompted the launch, YouTube Asia-Pacific director Ajay Vidyasagar said in Jakarta. With YouTube Shopping, Alphabet and Shopee will be competing against TikTok, the Bytedance-owned video app, which has increased its ambitions for the region after taking control of Indonesia’s biggest e-commerce platform Tokopedia.
Asked about the size of the partnership with Shopee, Vidyasagar said it was very significant, but declined to give numbers. He said YouTube Shopping would be opened to partners other than Shopee “in a phased, sequenced manner.” Reuters reported last year, citing sources, that YouTube was planning to apply for a licence to operate e-commerce services in Indonesia, South-east Asia’s largest economy.
TikTok’s shopping service, TikTok Shop, accounted for US$16.3 billion in 2023 in gross merchandise value in South-east Asia, in a nearly fourfold jump from the previous year, consultancy Momentum Works said in a report.
This has made the platform the region’s second largest e-commerce platform after Shopee.
The region of nearly 700 million is one of the world’s fastest growing e-commerce markets. The Momentum Works report said South-east Asia’s eight largest e-commerce platforms racked up US$114.6 billion in gross merchandise value in 2023, up 15 per cent from 2022. REUTERS
TAKEAWAY:
This news marks a significant shift in how businesses and retailers should align their future strategies, particularly in terms of marketing and growth. As the collaboration between YouTube and Shopee begins in Indonesia and soon expands to Thailand and Vietnam, it’s only a matter of time before the Philippines becomes the next market to adopt this trend. With the rapid growth of the local e-commerce sector and platforms like TikTok providing stiff competition, businesses must stay ahead of the curve by embracing new, integrated shopping experiences that combine entertainment with commerce.
For retailers and brands in the Philippines, this signals a need to rethink traditional marketing approaches and adapt to the evolving digital landscape. The ability to seamlessly link content with purchasing decisions offers an exciting opportunity to engage consumers in a more interactive and immediate way, potentially driving higher conversion rates. As the digital economy continues to flourish, businesses that proactively align their strategies with these innovations will be well-positioned for long-term success.
The question now is: how will Filipino businesses adapt, and are they ready for this new wave of e-commerce?
TikTok shopping is taking over Christmas shopping as the majority of TikTok users discover new brands and products for the season through the platform.
Move aside Jose Mari Chan, TikTok is growing to be synonymous with Filipino Christmas celebration and shopping this 2024. According to two studies commissioned by TikTok on Christmas and New Year behaviors of Filipinos, TikTok users are increasingly turning to the popular short video platform for community, entertainment and holiday TikTok shopping. With the growing dominance of the platform, it comes as no surprise that TikTok now occupies a central part in the Philippines’ biggest holiday.
A clearer picture of Filipino habits during the holiday season is emerging thanks to a 2024 report by research company Toluna. According to the report, 81% of TikTok users gather with friends and family, with 74% giving gifts, and 66% celebrating with Christmas parties.
Notably, shopping habits of Tiktok users have also been revealed. 60% of Filipino TikTok users reported spending time shopping for the season, with some doing so as early as September. In addition, according to a second report by Kantar Profile, 81% of Filipino TikTok users rely on the platform to discover new brands and products. And 77% of users go to TikTok to answer their shopping needs.
TikTok Shopping in Mega Sales Delight Shoppers
Tiktok’s Mega Sales are a prime driver for shopping on the TikTok platform. In the previous year, 84% of TikTok users were reported to have participated in these Mega Sales. This year, they are projected to increase their spending on TikTok by a factor of 2.3 times, compared to non-TikTok users. TikTok users are also expected to be 1.9 times more likely to spend more on Christmas gifts this year over the previous year.
This growth marks the emergence of TikTok as a preferred platform for shoppers during sales.
Paolo David, Philippine Brand and Partnerships Head at TikTok, said in a statement, “As the holiday season unfolds, TikTok continues to be a pivotal platform for Filipinos to celebrate Christmas. Whether it’s for discovery, entertainment, or shopping, TikTok offers a unique space where users can fully immerse themselves in the festive spirit. By understanding and engaging with the platform’s diverse shopping personas, brands can better position themselves to connect with a highly engaged audience, ensuring success throughout the holiday season and beyond.”
A Profile of Filipino TikTok Shoppers
Through the TikTok-commissioned study by Kantar Profile, a clearer picture of Filipino TikTok users is also emerging. The research company identified four distinct shopping personas from the study, which brands on the platform can use to generate insight and drive their marketing campaigns. The four personas of TikTok shoppers are:
Bargain Hunters
These users actively search for the best deals online and seek vouchers. 74% use TikTok more than once a day, and 78% shop weekly on various e-commerce platforms.
Inspirational Shoppers
For these users, shopping is an exploratory experience. They like to discover new brands and new shopping trends. 78% use TikTok daily, and 82% shop weekly. They are 1.2 times more likely to shop on social media.
Effortless Shoppers
These users make purchases for convenience, and prefer quick and easy shopping experiences. 73% use TikTok daily and 80% prefer hassle-free checkout.
Purposeful Shoppers
More considered than the other personas, these users like brands that align with their personal values, such as sustainability. 77% of them use TikTok more than once a day. They seek out brand-specific websites and are twice as likely to shop on these platforms.
US-based and Filipino-founded grocery chain Seafood City has launched its digital marketplace in the Philippines and North America in a bid to expand the reach of global and domestic brands.
SFC+ on Wednesday said its mobile app was currently available for select users, but it would be available for download via the Google Play Store and App Store by Oct. 15.
The company said that users based in the Philippines may buy products from physical stores of Seafood City, with 38 branches located in the United States and Canada, for delivery to their relatives abroad.
Similarly, their North America-based loved ones can send money through the app or buy products from partner Filipino brands and have these delivered to addresses in the Philippines.
The company has so far partnered with the SM Group, Philippine Airlines, Smart Communications, Globe Telecom Inc., among others. Users can also pay their bills or invest in real estate—SM Development Corp. condominiums, specifically—through the app, SFC+ said.
“We created this app with the goal of reaching and serving more Filipinos globally, as well as to enrich and meet their ever-evolving lifestyle demands,” SFC+ Inc. president and CEO Elewin Rebaya said during the launch event.
Seafood City is a so-called grocerant, a portmanteau of the words grocery and restaurant, founded in 1989 by Filipinos in the United States.
According to Rebaya, they want their 400,000 active members in North America to use the app before eventually expanding to other regions with a high presence of Filipino emigrants. Seafood City is currently only available in the United States in Canada.
Data from the Philippine Statistics Authority show that as of September last year, there were 2.16 million Filipinos working abroad.
Of this, 77.4 percent are in Asia, mostly the Middle East, while 9.8 percent are in North and South America, 8.4 percent in Europe, and 3 percent in Australia.
“Our objective is really to go global,” Rebaya told reporters. “It’s not in a specific region where we have physical stores, but since this is technology, anybody can use it all around the globe.”
MANILA, Philippines — Gokongwei-owned Robinsons Retail Holdings Inc. (RRHI) is looking at dominating the hard discount store segment with an aggressive expansion mapped out for O!Save.
RRHI COO Stanley Co told The STAR that the O!Save Trading Philippines Corp. is targeting to grow its network by opening an average of 200 stores every year.
O!Save, a hard discount supermarket chain founded in 2021, currently has over 300 stores in the country.
“We just opened our 300th store a few days ago so I think O!Save is expected to end the year with 400 stores, more or less,” Co said.
‘There are a lot of things that come into play when we open a store. There are so many dependencies. As much as possible this is our target, but sometimes, it gets derailed a bit,” he said.
All of O!Save’s stores are currently situated in Luzon, but Co said the company is open to expanding in Visayas and Mindanao in the future.
“O!Save started in Angeles then moved to Bulacan then moved to Metro Manila by way of our Taytay distribution center. And then the fourth one is about to open in Pangasinan. So the expansion now is going towards north,” he said.
As a hard discount retailer, O!Save offers the lowest possible prices for its products that are focused primarily on basic food, household and personal care.
O!Save said its stores are simple and not larger than needed. It also does not rent stores in expensive locations and also avoids anything, which is not necessary that could potentially increase the sales price of its products.
RRHI, one of the country’s top retailers, entered the hard discount category through a minority stake in O!Save.
RRHI president and CEO Robina Gokongwei-Pe told The STAR that the company is currently pleased with its investment in the hard discount supermarket chain.
She said RRHI also has no plans to increase its stake in O!Save at present.
O!Save’s biggest competitor in the country currently is DALI Everyday Grocery, which is operated by Hard Discount Philippines Inc.
DALI, which started commercial operations in February 2020, was previously eyeing to grow its store network to 900 to 950 by the end of the year.
Indonesian coffee chain Kopi Kenangan – also known as Kenangan Coffee – is expanding its global footprint, beginning with the launch of its first stores in India and the Philippines.
The company will open its first Philippine store in October at SM Mall of Asia, Pasay City.
In India, Kopi Kenangan will make its debut early next year through a licensing agreement with a local F&B business. However, specific details have yet to be finalised.
During its initial expansion phase in Southeast Asia, the company said it would focus on establishing at least 10 stores in shopping centres.
“Our expansion into Malaysia and Singapore is a testament to our commitment to serving quality coffee to more people around the world,” said Edward Tirtanata, founder and CEO of Kopi Kenangan.
“Moving forward, we hope to continue expanding our reach by opening 500 international Kenangan Coffee outlets across various countries,” he said.
Founded in 2017, Kopi Kenangan is one of the largest branded coffee chains in Indonesia, with more than 900 outlets across 60 cities.
The brand made its international debut in Malaysia in 2022, followed by an expansion into Singapore last year, where it currently operates 48 and seven locations, respectively.
It’s been a productive week as we approach the long weekend! The EuroAsia Group of Companies successfully conducted their Strategic Planning Phase Three – Balanced Scorecard.
It was a busy yet fruitful day, marked by discussions interspersed with moments of laughter, providing a breath of fresh air.
This blend of focus and light-heartedness highlighted the team’s progress aligned with the objectives set during the first two strategic planning sessions.
The review not only reaffirmed our commitment to excellence but also offered valuable insights to shape our strategies moving forward.
We are excited about the opportunities ahead as we continue to drive growth and innovation across our operations.
Private labels first captured my attention as a child in the 70s during a visit to Cora, the newest hypermarket near my hometown in northern France. Amidst the bustling aisles filled with colorful packages, I was drawn to a section showcasing “white products” – merchandise packaged in plain, minimalistic white without branding. The store-brand products communicated their value clearly: unbranded and low-priced. This early encounter with private labels, offering significant savings despite their lack of flashy branding, piqued my ongoing interest in private labels as I journeyed into retail.
Key Insights in Private Label Development
When I began my retail career in 1988 at Auchan in France, private labels were quite different from what we see today. Back then, their packaging often mimicked that of leading brands to the point where it could confuse customers, despite private labels being priced about 20% lower.
From those early experiences, I picked up three key insights:
Identify the top brands in your category to effectively position your private label.
Set your private label’s price 20% lower than the leading brands to attract price-sensitive customers.
Ensure your private label offers a margin that is 15 to 20% higher than the category leader to ensure profitability.
A decade later, at Monoprix-Prisunic, I encountered the concept of exclusive premium retail brands – high-quality products that resonated with customers and helped differentiate the retailer.
In the Middle East with Carrefour, I faced the challenge of launching private labels in a market dominated by established international brands. Despite Carrefour’s global reach, our progress was slower than expected due to limited initial volumes.
At Aswaaq, the challenge was even greater as we had to develop a private label before the first supermarket had even opened, with minimal volumes to start. We chose to focus on ten basic commodities, targeting the low-price segment with a distinctive brand name.
Since moving to the Philippines in 2011, I have had three key experiences developing or enhancing private labels. Although private label sales remain relatively low at below 5% share of sales compared to Europe, which has a 30% to 40% share of sales, or the US, with a 25% share of sales, the rise of hard discounters like Dali and O!Save, and the “No Brand” concept with strong private label strategies, has pushed local retailers to reassess their approaches to private label development.
Key Fundamentals of Private Label Development and Implementation
From my extensive experience in retail, I have learned that private label development serves three key purposes: strengthening branding, enhancing customer loyalty through unique products, and increasing profitability. Achieving these objectives relies on a meticulous step-by-step process, where each phase is critical. Missing even one step can compromise margins, affect targets, lead to flawed product development, and impact cost management efforts.
To attain success in private label development, attention must be given to several key aspects, from initial development to final implementation. These include:
Negotiating Costs: Start by focusing on fast-moving items. By leveraging high volumes, you can negotiate better deals and reduce costs effectively.
Defining Specifications: Ensure that your product specifications are clearly outlined and at par with the quality of national brands. This like-for-like comparison will build credibility in the market, demonstrating that your product meets top standards and that quality is never compromised.
Market Research: Take time to understand your competitors’ private label strategies and pricing. This insight will inform your own strategy and pricing decisions.
Sourcing Manufacturers: Evaluate both local and international manufacturers to secure competitive pricing without compromising on quality. It is crucial to balance high standards with cost efficiency to achieve success. Leading retailers often source their private labels globally to optimize both quality and cost.
Pricing Strategy: Ensure that the product’s cost price allows for a retail price difference of 15 to 20% compared to category leaders, along with an additional 15 to 20% margin. This principle has consistently guided me in scaling private labels effectively.
Contract Management: Establish contracts with manufacturers that cover volume requirements, pricing, lead times, product and packaging specifications, and penalty clauses for non-compliance. Regularly reviewing and adjusting these terms helps you stay agile and responsive to market changes.
Quality Control: Continuously monitor the quality of your private label products. Implement stringent quality control processes to uphold product standards. I recommend using a third party for random quality checks to ensure adherence to the agreed-upon standards with the manufacturer.
Brand Strategy: Deciding whether to use an existing brand name or create a new one significantly impacts your overall brand identity. Regardless of the choice, the brand will reflect the company’s value proposition and influence its reputation. Ensuring high-quality products is essential for strengthening brand identity.
Legal Compliance: Make sure you comply with all legal requirements and secure exclusivity for your brand name. This protects your brand and ensures regulatory compliance.
Packaging: Designing packaging that enhances the perceived quality of your product and meets legal standards is something I have learned to prioritize. Effective packaging can make a big difference.
Tiered Pricing: Develop private labels for various price segments – low, mid, and premium. Assign distinct brand names to each segment to appeal to different customer demographics. For the low and premium segments, creating specific brand names is especially effective.
In-Store Display: Allocate adequate shelf space for your private labels and position them at eye level. Proper placement can significantly boost visibility and sales.
Promotion: Plan regular promotions through catalogs, online channels, and social media. Utilize loyalty programs to encourage repeat purchases.
Price Monitoring: Regularly review and adjust prices to remain competitive. Periodically renegotiate costs with manufacturers to keep your pricing strategy effective.
Supplier Partnership: View your private label suppliers as partners. Regularly review their performance to address issues like quality and pricing, and use customer feedback to drive continuous improvement.
Fresh Food Quality: For fresh food and perishable items, maintaining consistent quality and safety is crucial. Your brand must be associated with reliable and high standards to avoid any perception of inconsistency or poor quality.
Supply Chain Management: Efficiently manage your supply chain to prevent disruptions. Streamline processes to ensure timely and reliable product availability.
Sales Monitoring: Regularly assess the sales performance of your private labels within their categories. Set targets for the next 3 to 5 years. For categories with limited or no brand presence, aim to achieve up to 75% sales contribution for your private label.
Customer Feedback: Collect feedback through surveys, focus groups, and blind testing to refine your products. Use this input to make improvements and better align with customer needs.
In summary, a well-executed private label strategy can greatly enhance a retailer’s brand, profitability, and customer loyalty. Achieving this requires a comprehensive approach that includes in-depth market research, strategic partnerships, innovative product development, effective marketing, and rigorous quality control.
In the current Philippine retail landscape, despite the presence of dominant international and strong local brands, strengthening private labels remains an opportunity for retailers to enhance their commercial offerings and reflect their company’s size and capability. Furthermore, a stronger market share in sales would significantly impact their economic model.
Reflecting on my early encounter with “white products” at Cora in the 70s, it is evident how far the concept of private labels has evolved. What started as a curiosity about cost-effective, unbranded merchandise has become a cornerstone of my strategic approach to private labels, helping retailers achieve success.
I hope these insights inspire you to fully embrace the potential of private labels in your own retail journey.
Postscript: For those looking to advance their private label strategy, consulting Philippe Devismes is highly recommended. As a mentor during the development of Aswaaq’s private labels, Philippe’s expertise and attention to detail offer invaluable guidance. His insights can help retailers effectively leverage private labels to enhance their market position and drive sustained success. Connect with Philippe on LinkedIn for more information.
Homeowners and DIY enthusiasts in Pampanga now have a new go-to place for their home improvement needs.
Metro Retail Stores Group, Inc. (MRSGI) has officially launched its first Metro Home Improvement store at Marquee Mall, Angeles City, which offers a wide array of home improvement and enhancement products.
Spanning 1,000sqm, the store houses a comprehensive selection of hardware, lawn and garden supplies, car and pet care products, appliances, electronics, housewares, and storage solutions.
To ensure a convenient shopping experience, the store is thoughtfully designed with clearly marked sections.
“This marks a monumental step as we introduce our first Metro Home Improvement store format, a key part of our aggressive expansion strategy. This store represents our commitment to being a dependable partner for the hardworking moms and dads who strive to create the best lifestyle for their families,” said Manuel Alberto, Chief Operating Officer of MRSGI.
The new store boasts several exclusive brands and product lines, along with interactive displays and appliance demonstration areas. Customers can also look forward to exciting promotions and unique finds.
“We have ambitious plans to expand across various locations, continuously innovating and improving to serve our customers better. By pairing our home improvement format with our existing Metro Supermarkets, we ensure a seamless shopping experience that saves time and delivers quality products, all under one roof,” Alberto added.
RetailWise celebrated its 10th anniversary with an intimate gathering attended by esteemed figures in the retail industry.
The event was a night of resounding success, filled with great food, delightful company, laughter, and meaningful conversations—a beautiful testament to the shared accomplishments and relationships that have flourished over the past decade.
RetailWise would like to take this opportunity to express its immense gratitude to everyone who has been part of its journey.
To the dedicated past and present employees who have tirelessly championed the company’s goals and values;
to the steadfast partners who have wholeheartedly entrusted RetailWise with their support; and to the clients and colleagues who have become friends, placing their confidence in the company’s expertise, RetailWise extends a heartfelt thank you.
As the company moves forward, it remains committed to providing the latest and best expertise in retail.
Here’s to many more years of success and camaraderie—cheers to the future!
Mr. Eric Poiret, delivered a message at the Heyday general assembly, emphasizing the importance of teamwork, collaboration, and exceptional customer service in achieving customer satisfaction and company goals.
In business, fostering a culture of teamwork and clear communication is essential. Proper alignment enables the team to consistently deliver a high standard of customer service, thereby effectively fulfilling customer expectations and achieving satisfaction.
