Thriving on gift-giving: The FilipinoGifts.com experience

Last November 1999, 23-year-old Jason de la Rosa and Wilbert Cua, founders of Prime Logic Corp., conceptualized FilipinoGifts.com. The site started with six products such as gift baskets. They also opened a company in Seattle, Prime Logic USA, to handle credit card transactions.

Now FilipinoGifts.com has grown to over 100 products with merchant partners like Crabtree and Evelyn, National Book Store, Insular Life and Crossings. De la Rosa and Cua believe that creating good relationship with partners and suppliers will lead to good customer service.

FilipinoGifts.com has more than 400 subscribers, 35 percent of whom generate repeat business for the site. Its customer orders usually come from the United States, Canada, the Middle East and Europe, and afterwards delivered in the Philippines through its partner, Aboitiz One. The most saleable items on the site are perfumes and flowers.

The site earns from the mark-up per product. "We are like retailers. We sell products at retail price and get them at wholesale price," said De la Rosa. "We already generated $16,000 to $20,000 in revenues last August."

Challenges

FilipinoGifts.com is not a stranger to anomalous orders and credit card fraud though. One time, it experienced receiving an order worth P40,000 in one transaction. To counter fraud, it created a strategy to trace doubtful transactions. Whenever an order is made, it looks first into the buying history of the customer before it processes an order. If the buyer has a bad transaction record, FilipinoGifts.com bans the buyer from the site.

There are other problem areas such as customer service, fulfillment, and pricing. Most of the site’s customers are from far places, and there’s a need to make them feel assured about their orders. "One of our customer service strategies actually lies in constantly communicating with our customers to ensure them that their gifts will be delivered to their loved ones — and that means telling them where their products are," said De la Rosa.

Surprisingly, pricing was the challenge that took FilipinoGifts.com the longest time to resolve before it really became competitive with its offers.

But one of its biggest challenges is retaining competent people in its organization, especially technical personnel. To make them stay, the company gives benefits such as health care and health insurance. A new economy business faces a lot of stress and demands, especially in the present scenario where the winning business model is still being developed and players need to be on their toes at all times.

Another challenge is competition: big companies eating the market. "The pressure is there for players like us to have a marketing plan that can allow us to capture a loyal market base," De la Rosa said.

Lack of high bandwidth technology and infrastructure is a common issue as well to most start-ups. "We have the brains but we don’t have anything much to work with," De la Rosa said.

Like most sites, funding is needed to invest in marketing and promotion. "Actually, in our experience, the biggest expense is marketing. It’s not technology," said De la Rosa. "Spending money on advertising should create value in return and the company’s strategy is to create demand outside the Philippines."

The right partner

Choosing a partner is very difficult and De la Rosa won’t approach just anyone for funding. He has his own set of criteria. "A prospective partner should have a network and the proper channels which we can tap and benefit from," he said. "The next step for FilipinoGifts.com is to bring it to a bigger level, the regional level, and eventually sell gifts all over the world."

"So if we’ll get a strategic partner, a venture capitalist, (more favorably, if also a media company), then we will be able to advertise FilipinoGifts.com and promote it extensively," said De la Rosa.

He said FilipinoGifts.com will continue to expand its features and these include product rating and customer review systems. It intends to get more partners to build a wide array of products its customers can choose from.