State of E-Commerce, Digital Marketing, and Internet at 18 in the Philippines

Last March 22, I was a guest at ANC Future Perfect and talked about the e-commerce landscape and DigitalFilipino E-Commerce Summit. Here are some insights I shared then and learned from the Summit.

State of E-Commerce in the Philippines

Last March 29, the Philippines historic connection to the Internet turned 18. I think we have gone a long way and grew so much. But am also sad that we don't have enough data gathering process and tools in place to accurately measure it.

We Need Data: Philippine Information Society Data Alliance Project

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For instance, broadband subscriber base has increased by 45% to over 2.9 million in 2011 compared to a year ago. However, most industry peers still peg the number of Internet users to 30 million in the Philippines. Around 1/3 of it were assumed to be household users. This number was also used for the past 2 years.

August 1997: Internet Commerce Expo Manila

WS Expositions organized the Internet Commerce Expo Manila 1997 (ICE Manila 97) at the Shangri-La Hotel Makati City.  This event introduced the WS Group to Fiesta Online, known for Yehey.com

Yehey.com in 1997

2003: Level Up!

Level Up! Games licenses the Oz World and Regnarok online games.  These become popular among young players, increasing growth in Internet usage at home and in cybercafes, and promoting e-commerce through oline ordering of credits.  The company is adopting the Korean model of multiplayer online gaming.

LevelUp! in 2005

2003: PICS SME IT Excellece Awards

The Philippine Internet Commerce Society launched its PICS SME IT Excellence Awards in the 2nd E-Commerce Congress and recognized Godiva for its efforts in adopting ICT and Internet use.

Godiva in 2001

2004: PLDT vs. PLDT

The dispute over PLDT.com between the Philipine Long Distance Telephone Company (PLDT) and Gerry Kaimo peaked on January 29, 2004.  A judge of the Quezon City Regional Trial Court denied the request by PLDT for a preliminary injunction.

PLDT accused Kaimo of infringing on the intellectual property of the trade name and "engaging in unfair competition for using the trade name."

This is not yet the end of the story, which started on in September 1999 when PLDT filed a 1.35 million peso lawsuit against Kaimo.  Kaimo expected PLDT would appeal the case to higher courts, while preparing his own 50-million peso countersuit against PLDT.

PLDT in 1997

1997: Internet Commerce Expo

The WS Expositions Group organizes the Internet Commerce Expo in September 1997.  This shows that Internet commerce deserves its own events.

The ATM network Bancnet operates an ISP for its member banks.  This made use of the existing connections between the Bancnet system and its members.

1998: San Miguel Draft Beer

San Miguel Draft Beer goes online. This is the first full e-commerce site operating from the Philippines.  The proponents were World Port (an Internet services consulting firm), IBM, San Miguel Coporation, nd Equitable Card Network; with the support of Intelligent Wave Philippines, and Infocom Technologies Incorporated; working with the Department of Trade and Industry (DTI) and the E-Commerce Promotion Council of the Philippines (ECPC).  This showed that the Philippines is capable of facilitating online commerce.

San Miguel Draft Beer in 1999

1994: Portal Inc.

Binary Systems Holdings, Inc. puts up a commercial online service, called Portal Inc. (portalinc.com) that offered "a commercial online service (much like that of Delphi, Computerserve, even AOL) which, like the humble BBS, was the precursor to the ubiquitous Internet Service Providers we have now. (The system) was a proprietary online system with its own viewers (precursor to the browsers), email, etc. It started as a commercial online service that was available to its subscribers, 24 hours a day".

This ran along the same lines as EMC Online. The systems back then were "proprietary" since no unified standard for online systems has emerge, prior to the world Wide Web and today´s standard HTML-based interfaces.

1999: Auction

Auction sites flourish, following the trend in the US, with popular services such as eBay.  These include eAuctions.ph, which closed and reopened as Avalon.ph; PinoyAuctions, which was acquired by ABS-CBN and merged with PinoyCentral; and Bidshot, which offers SMS-based bidding.  These make use of a C2C (Consumer to Consumer) model where the buyers and sellers transact directly and the website merely facilitates the meeting of the two.

E-store also began its e-commerce store operations.

Bidshot in 2009

2001: PhilDAC

Various developments heated up the issue over the PH domain.  The group opposed the dotPH and Joel Disini organized PhilDAC (Philippine Domain Authority Convenors). dotPH president Jose Emmanuel Disini sues Fernando Contreras, Jr., president of PISO (Philippine Internet Service Organization) and ISP Inter.net.

2001: Prosperity.com

Prosperity.com is found guilty of selling and distributing securities user an illegal pyramid scheme.  It was selling expensive websites.  During this time, Multi-level Marketing (MLM) schemes became popular on the Internet. 

2001: Yahoo Computer Services

Yahoo Computer Services, a local company, loses yahoo.com.ph to Yahoo! Inc.  This is the first time a Philippine company enters into a domain dispute with a foreign corporation and a well-known Internet brand.  This shows that the scope of the well-known Internet names is global, and Internet companies are concerned about misuse of their name even for local domains.

1988: The Science and Technology Advisory Council

The Science and Technology Advisory Council is formed to coordinate "expatriate human resources in key development programs of the country."  Its electronic network STACnet is important because it bought interest to the fledging Philippine Internet from around the world.  The first e-mail sent from the live connection at the University of San Carlos was addressed to STACnet.

1992: Dr. William Torres, Father of the Internet

Dr. William Torres was the managing direct of the National Computer Center, the government agency promoting computerization in the country.  At that time, the US academic, non-profit Internet was of the NSF (National Science Foundation) network.  The NSF was headed by Steve Goldstein.  The two met and Dr. Torres was convinced that a full-time Internet connection was necessary.

1994: First Live Internet connection

Setting up the first live internet connection was a cooperative effort of different groups.

Dr. Torres approached the Manila Electric Company (Meralco), and the Philippine National bank, since thy were well-funded entitles. Both declined to fund the project.

DOST Secretary Ricardo Gloria heeded Dr. Torres´ proposal for the Philippine to connect to the Internet  He included it in the Science and Technology Agenda for National Development. (STAND).  Dr. Rodolfo Villarica of the Industrial Philnet was formed. Dr. William Padolina became DOST secretary and oversaw the project.

Philnet started out with an email connection for "Phase I", performed through a dialup  UUCP (Unix to Unix Copy Protocol) connection made between the Ateneo de Manila University and the Victoria University of Technology in Australia.  De La Salle University and UP Diliman joined the dialup network to receive international e-mail through Ateneo gateway. This connection used UCCP to bcd up mail to and from the Internet from the participating institutions.

The DOST made a grant of Php 12.45 million to the IRF to implement Philnet "Phase II", for a direct, liv connection to the Internet.

The DOST contracted Computer Systems Network Corporation (ComNet), a networking equipment vendor to implement the network linking the various and universities and organizations  Arnie de Rosario then chair of the Ateneo Computer Science Department, informed the chair of ComNet, the late Dr. Willy Gan about the project. Dr. Gan drew up the PHnet network design and convinced PLDT to deliver the facilities in time for the March 29, 1994 launch in Cebu. This was to coincide with the E-mail Conference headed by Dr. John Brule, a fried of Dr. Villarica and a visiting professor at the University of San Carlos.  Benjamin "Benjie" Tan headed the technical part of the project.

Later, Philnet is renamed to PHnet to avoid naming conflict with another group, a "philosophers´network"

1994: Philippines' first internet link

March 29, 1994: The historic activation of the Philippine´s first internet link with a permanent TCP/IP connection. This was 64 Kilobit per second line using PLDT and Sprintlink, the IP service of US telco Sprint.  Benjie Tan did the activation on the router co-located at the PLDT premises in Makati City, while Richie Lozada of Ateneo handled the Cebu end. This was in time for the target date, the dad of the E/Mail Conference led by Dr. Brule, held at the University of San Carlos.

The 64 Kilobit per second line run by PHnet is upgraded to larger capacity links, until the point where PHnet buys service form Bayantel´s Internet service instead.  This is when the institutional members of Phnet shifted their uplinks to commercial ISPs.

2003: PLDT Cyber Madness

PLDT offers the Cyber Madness promo. It partners with dealers to offer computers on an installment basis when tied up with a dial up or DSL broadband subscription.  This expands their consumer base beyond customers who already have PC´s, and aim to improve the low domestic PC penetration which hurts Internet expansion.

To this date low credit penetration due to low income is a barrier to e-commerce adaptation. Traditionally, Internet commerce systems ave been dependent on credit cards. Fraud concerns also stop people from using their cards on local sites.

PLDT in 2009

2003: Online Fraud

Online merchants outside the counter block transactions originating from the Philippines and some other countries.  This measure is intended to prevent credit card fraud by blocking customers en masse, instead of addressing fraud on a case-to-case basis.  One merchant with this policy is the domain registrar GoDaddy.com, which now blocks IP connections from the Philippines.  Their blocking strategy affected local domain owners who used them to register domains.  The Philippines is known among merchants to ave high incidence of online fraud.

GoDaddy.com in 1999

2000: B2B Business Exchanges

B2B Business Exchanges started operating, to offer services for corporate buyers and sellers.  These include Bayantrade, formed by a consortium of large companies; SourcePilipinas, from the Yapster group; B2B Price Now; and PhilBX (Philippine Internet Business Exchange) from the SSI group.  These systems allow companies to achieve savings and increase efficiency by bidding and procuring online.  Since the companies involved have existing relationships, this avoids the B2C (Business to Consumer) problem of Philippine e-commerce where payment systems are not well developed.

Bayantrade in 2000

2000: The E-Commerce Law (Republic Act 8792)

The E-Commerce Law - Republic Act 8792, was signed into law on june 14, 2000.  It has a scope much wider than the "e-commerce" in its name, as it also covers digital signatures and "hacking" activities.  The salient features of the E-Commerce Law are listed here: http://www.digitalfilipino.com/writing_article.cfm?id=19

E-commerce Law - Republic Act 8792