SM Prime Holdings, Inc. plans to launch its own online shopping platform within this year to take advantage of the burgeoning e-commerce space in the country, and also to address a potential threat to its business.
The planned online shopping website will use a “click and collect” model, wherein customers choose what items they want to buy from one of SM’s numerous tenants, and then collect the items from the nearest SM mall. The strategy is somewhat similar to Best Buy’s in-store pickup service in the United States.
“We’re gonna formalize the setup of the platform within the year. We will come up with a legal entity for that,” SM Prime Chief Finance Officer John Nai Peng C. Ong told shareholders last week.
Ong said that door-to-door delivery is not yet in their immediate plans, but that they’re working on it.
“We have yet to work toward delivery. Potential din yun because we have affiliate companies that can deliver. But our work is toward click mo and collect sa malls. So we’re trying to set up specific areas in the malls,” Ong added.
SM Prime Holdings, Inc. is the largest shopping mall and retail operator in the Philippines, with 63 malls (as of this writing) and over 2,000 retail stores all over the country. SM’s “click and collect” strategy aims to leverage the chain’s nationwide reach to make shopping more convenient for Filipinos. Shoppers can choose their items in the comfort of their homes and then pick them up the very same day.
If SM’s online store can offer door-to-door delivery, it could be a serious competitor to Lazada and Shopee. The company has stores and warehouses all over the country, so it can deliver goods faster than other e-commerce platforms.
Then again, there’s no guarantee that SM will succeed in the e-commerce space. Let’s look at the U.S. retail industry, for example. Walmart is the largest shopping mall operator in the U.S. but has failed to make a dent on Amazon’s business. In fact, Amazon’s market capitalization reached $740 billion, more than double Walmart’s market cap of $280 billion. Amazon’s market cap could exceed $1 trillion before the end of the year, while Walmart shares plunged.
With Lazada firmly entrenched and the household name in online shopping in the country, SM has its work cut out for them. Brick-and-mortar stores entering the e-commerce space generally have a hard time competing with established e-commerce players. Only time will tell if this venture by SM will succeed.
Source: Business World