As published by: Business World
SMALLER GROCERY STORES may sell products online to compete against supermarket giants that have invested in digital tools amid a coronavirus lockdown.
Steven T. Cua, president of the Philippine Amalgamated Supermarkets Association, said smaller stores were hit harder by the pandemic after being allotted fewer stocks from producers experiencing supply chain constraints.
Running stores with three to 15 checkout counters, some group members were starting to work with a mobile app firm to sell their goods, he said.
“The smaller supermarkets who cannot afford in-house programmers grouped together,” he said by telephone on Saturday. They compete with the giants by developing a more personal approach of chatting with their customers online, he added.
The move to e-commerce, though, still has risks, Mr. Cua said.
He said the stores are investing in bar code devices and staff for e-commerce operations on the My Suki app, but there is no guarantee that the platform would attract demand.
“Some of the members are hesitant to join because they don’t know how long this pandemic will last,” he said. “There’s risk, but you have to know when to step in and when not to. It’s already been more than year since the pandemic started.”
The stores are not just competing with larger supermarkets but also delivery apps rolling out grocery services. Unlike delivery app firms stocking goods in warehouses, grocery stores sell both in physical stores and online.
“The physical stores might compete with online requirements,” he said. “That’s the fine line that should be fixed internally.”
Mr. Cua said many smaller groceries have been considering shutting down due to the decline in foot traffic.
An industry group of retailers projected retail sales to remain flat this year after Metro Manila and nearby provinces were again placed under a strict lockdown amid a fresh surge in infections.
Mr. Cua said the stores were looking for ways to minimize expenses amid the sales drought, although the move online would involve investment and hiring.
“Will it help me grow or will it kill me? There’s that risk for the medium-sized to small-sized supermarkets,” he said.
COMPLEMENT Meanwhile, e-commerce enabler Etaily said online stores were unlikely to replace malls in the Philippines despite increased online shopping by Filipinos during the pandemic.
“They play a tremendous role in the retail industry,” Alexander Friedhoff, Etaily co-founder and managing director said in an online interview. “It would be very bad on my part if I just say that online is everything now and offline is not relevant anymore. That’s not the case.”
He said online and physical stores will complement rather than compete with each other.
Mr. Friedhoff said they have been telling brand managers that “they should not be afraid of going online, which they think might destroy the offline channel.” “That’s not the case.”
Etaily enables brands to sell their products online by providing them with a one-stop, omni-channel solution. Its services include content production, channel creation, warehousing and fulfillment. Landmark, Terranova, Vans, Mango and Guess are among its partners.
“One of our core pillars in the entire execution is always to take into account what the offline store needs in terms of research online, purchase offline, in terms of pick up from store, setup on the web and in terms of offline promotion for online,” Mr. Friedhoff said.
The company, which focuses on fashion, home and living, and consumer electronics, seeks to partner with 25 more brands this year
Fashion, one of Etaily’s biggest categories, almost tripled their transactions with customers in the first quarter.
“With Etaily’s current verticals, the quarter-on-quarter growth comparisons per category are: 120% fashion, 200% home and living and 130% consumer electronics,” the company said.
E-commerce growth in the past year quickened by a decade, Jesse Stefan H. Maxwell, an Etaily investor, a partner at Foxmont Capital and chief executive officer of Magsaysay Shipping and Logistics Group, said in a statement. “Etaily is at the right time, in the right spot, with the right product market fit.”