Taking the fear out of online shopping

Buying and selling products or services online are no longer the exclusive domain of geeks. Of the country’s 21 million Internet users, according to an IDC study, a few millions have become active participants in the so-called e-marketplace. Whether it is due to marketing buzz or to a genuine need, online shopping is on the rise. Security, however, remains a major concern.

How do you entrust your credit card number to an online shopping site, for example, when you’ve been frequently warned of phishing and credit card fraud? How do you know that your goods will be delivered as promised and on time after paying up? How do you even know that you are dealing with a legitimate seller and not some prankster who merely posted his neighbor’s microwave oven for sale?

In the case of sellers, how do you know that your prospective buyer who won the bid for a camera phone is not a naughty schoolboy whose daily allowance cannot even pay for the shipping cost of delivering the item on his doorstep?

The online world is full of madmen and is a hodgepodge of fake or borrowed identities. It is wise to take caution. Yet, it is a fact: urban living is a rough ride on the fast lane. Why drive down to the mall — traffic, high gas prices and all — when you can shop in the comfort of your home? Why make the rounds of department stores to canvass the best price of the latest phone or a camera lens, when you can do it while answering you e-mail? Why limit your choices to what are available locally when products from all over the world are practically at your fingertips?

Soojin “Jenny” Kim, vice president and chief marketing officer of Auction.ph Corp., reveals a very promising future for online auctions. She says that their company, a Korean venture that started operations in the country only in 2006, is expecting gross sales volume of P300 million this year. The site has about 1.2 million registered buyers and is selling about 5,000 to 6,000 items every day.

Kim compares the stage of the Philippine e-marketplace to South Korea in 1998 when online trading was just starting to take off. While the average price of a good product sold in Korea at its take-off stage is P1,500 to P2,000,  Kim says that in the Philippines it is already P3,000 to P4,000. The most saleable items are gadgets, cellphones, MP3s, and cameras. Clothing and cosmetics are also fast-moving items.

“As an emerging market, the environment here is very good. For one, English is widely spoken and that is a very strong point. The infrastructure is also in place for payments and delivery,” Kim says.

However, the basic question remains: How do you make both buyers and sellers feel secure transacting online?

Auction.ph has devised a scheme for safer online shopping experience for all: it acts as a middleman for buyers and sellers. The company receives all payments for goods and transmits them to sellers. Buyers are given seven days to pay for items they won through online bidding or have confirmed to buy in outright purchase. They can pay through partner banks or via Internet banking. They can also use e-money, a form of cyber-money used exclusively like real money on Auction.ph as payments for purchases, or through banks’ bills payment services. Soon, Kim says, buyers can pay for their purchases in partner establishments that are normally open beyond banking hours such as Internet cafés, remittance centers or pawnshops for more convenience or through the mobile phone.

Upon receipt of payment, sellers ship the items to the buyers within one to two days. No meet-ups, no cash on delivery, no pickups. This eliminates the danger of meeting someone you don’t know and assures the buyer that he is dealing with a legitimate company and not an unknown trader he just met online. “This way we increase the level of safety for online transactions,” says Kim.

Auction.ph calls this innovative scheme the Escrow System, which also includes provisions for requests for change of goods, cancellation of transactions, refunds and tracking mechanisms for every stage of the transaction.

Kim guarantees that even for deliveries to Mindanao, it only takes an average of four days to ship an item.

The rise of the so-called cyber-merchants or traders who sell items online has also spawned a new class of entrepreneurs who are tech-savvy, innovative and trailblazers in the new economy.

Auction.ph sellers attest to the ease and cost-efficiency of doing business online. There is no rent, utilities, salespeople and storekeepers to pay. You take pictures of the products you are selling and post them online. When a prospective buyer has questions about the product, you can communicate online. When he pays for the item, Auction.ph notifies you to ship the item and you collect the payment also through Auction.ph. 

One of Auction.ph’s sellers, Ramund Laher, says that he earns around P75,000 a week just selling online. “In fact, I left my day job to concentrate on selling where I earn more. Moreover, Auction.ph’s Escrow System is very good. It protects both parties — the buyer and the seller,” he says.

Another Auction.ph star, seller Geoffrey Tan, says he earns P100,000 to P200,000 a month from his sideline of selling online. “Actually, I earn more from Auction.ph than from my regular job,” he says.

Kim reveals that one of the strongest value propositions of Auction.ph is the support they give to their sellers.

Regularly, the company conducts online selling seminars for prospective Web entrepreneurs and existing sellers to boost their sales. The Auction.ph team also holds campus tours to orient young people or the tech-savvy generation on the advantages of online shopping or how to be Web entrepreneurs after graduation.

On-site, registered members can earn discounts and coupons to make their online shopping fun.

“We support our buyers and sellers so they will continue to be active members,” says Kim.

For most Internet users who have yet to explore this exciting world of online trading, it may be only a matter of time.