Internet Marketing and Piracy in the Philippines
Current Philippine News recently reported on a Nielsen study indicating that half of Filipinos who go online, have never bought anything on the Internet.
This is unsurprising given the state of IP law enforcement in the Philippines where pirated or boot legged DVDs run rampant across the nation.
In an online market where digital goods such as ebooks, movies and video games are the best selling items, the Philippines is not particularly fertile ground.
On the marketing side, in an environment where ebooks are easily downloaded and pirated DVDs sold for less than a dollar each, how else could you sell services or goods to this country?
Until such time when Intellectual property laws are strictly enforced, Internet marketing in the Philippines would mostly focus on local goods and services and on niche markets.
Existing business entities with a set paradigm for selling online would find their growth rates to be severely limited by this.
There are many plausible explanations for this:
1. Baclaran-Divisoria mentality. Baclaran and Divisoria are both places in the Philippines where everything is dirt cheap.
Why buy a $10 movie from Amazon, when you can just buy it in Baclaran or a roving pirate for less than a dollar?
2. Ebooks. Books and literature has always been traditionally consumed by the middle class. Again, in an environment where the middle class is shrinking, and when the respect for intellectual property is very minimal, you won't be able to sell ebooks.
3. Nutritional Supplements. Multi level marketing outfits have invaded social media here in the Philippines and more often than not, nutritional supplements (mostly with no approved therapeutic claims) or business franchises for food carts are common fare on Facebook.
However, since social media is the primary medium for conducting these transactions, most of the time sales of these are done on a person to person basis. The seller most often than not, is acquainted with her target market as a relative, work peer or friend. Thus, the sale is only consummated upon the physical transfer of goods and not made through online payment systems. In a strict sense, this is not an online transaction.
The sale of services in the online world particularly through business process outsourcing is the silver lining to the potential of the Philippines as an online business center.
Notable local startups who have 'made it' have done so in the form of Sulit.com.ph, IP EGames and countless other outsourcing services.
Online publishing is a heavily competitive arena dominated by traditional media titans such as Inquirer.net, ABS-CBN and GMA News.
Small and Medium Scale Businesses
Unlike in the US and Canada, much needs to be done for small scale Filipino businesses to thrive in the online world. For now, the online realm is just a medium for advertising and promotion. A fact capitulated upon and dominated by big brick and mortar businesses. Nonetheless, I am hopeful that a breakthrough could be in the horizon.