HOMEGROWN technology firm Star Telecom Alliance Resources Inc. (Star Inc.) announced on April 17 it has inked a deal with Philippine Seven Corp. (PSC) to introduce an electronic commerce (e-commerce) business model.
In a statement on April 17, Star said the agreement includes allowing customers to order its smartphones through PSC’s multichannel store, found on Google Play and the Apple App Store, as well as electronic kiosks and catalogs in-stores.
According to Star Inc., once buyers confirmed orders, they can pick up their orders the following day. Customers can opt to pay for the products ordered digitally through any of PSC’s platforms or in-person through counters at PSC’s 7-Eleven convenience store, before or after they pickup their chosen phones, using cash or credit card.
According to PSC E-commerce Managing Director Daniel Marogy, the e-commerce model was first rolled out in 7-Eleven stores in Taiwan.
“It has proven so successful that 35 percent of all e-commerce packages in the country now go through 7-Eleven branches, eventually helping make Taiwan the world’s most developed e-commerce market, with 18-percent share of total retail,” Marogy said.
He added the firm aims to pilot the program, together with Star in selected 7-11 stores in Metro Manila starting April 24.
According to Marogy, the e-commerce model aims to address two key realities facing the e-commerce industry in the Philippines today—small retail baskets and expensive fulfillment logistics.
Star Product Development Head Michael Chen said 75 percent of offline retail transactions in the Philippines cost P600 ($12.05) and below. However, online vendors can spend up to an average of P150 ($3.01) fulfilling these orders, with expenses going even higher when returns and failed deliveries are factored, Chen said.
This eats into their margins and discourages them from investing further in their e-commerce channels, he added.
“We are optimistic about this model as this leverages 7-Eleven’s logistics operations—one of the most efficient in the country—and remove the last-mile expense and costs associated with running an e-commerce warehouse by using our stores as pick up locations,” Marogy said. “In addition, this also reduces failed deliveries by giving customers an incentive to prepay in-store.” “As we apply this to the local market and learn about Filipinos’ reception to the model, we hope to eventually expand our product offering and store availability,” Chen said.
“The more it becomes cost-effective for us, the more we will be able to bring down price points and make our devices even more affordable for our customers.”
This venture builds on 7-Eleven’s retail partnership with Star, which began in 2014, when the convenience store started carrying Starmobile devices in their stores.