We’ve seen a massive growth in online shopping throughout 2012, thanks largely in part to Group Buying sites and Rocket Internet’s vote of confidence in the potential of e-commerce in the Philippines (Zalora, Lazada, OfficeFab). This blog post gives some tips and advice for how to check out an online company before buying, to make sure you aren’t going to become the victim of a scam.
One of the large hurdles these companies must overcome is to convince online shoppers that their products will arrive once you swipe your credit card. There have been so many scams online in the Philippines involving dishonest vendors, which makes it so much harder to gain Filipinos’ trust. Some of these sites can get more than 100,000 visitors each, but if there is no trust in the brand, none of those shoppers will purchase the products. There is a giant leap of faith from the Sulit.com.ph style of “meet in person” commerce to swiping a credit card and hoping that your products arrive.
The converse is true as well. There are many people who are dishonest and are attempting credit card fraud. If an online retailer wants to accept a credit cards as payment online, they need to be ready for this, both with strong technical solution, and a good manual verification team. They must also be ready with lawyers and police to send the fraudsters to jail. Otherwise, this activity will not stop.
RainingPesos.com.ph, as a small online company, can vouch for online shopping at Metrodeal, having been inside their office and seeing their operations. Quite a remarkable team there. Same applies with Zalora Online Shopping, which is also 100% safe and reliable. They carry 100% of their inventory in a warehouse in Bicutan, and the website inventory levels always match what is in the warehouse. Even up-and-coming small retailers selling wine online are starting to see that consumers are more educated now, and are beginning to trust local online retailers.
However, as you are all aware, to make sure that the online retailer is not a scam, you need to do due diligence before shopping. Here are some tips:
- Make sure the company is legitimate and registered with the SEC
- Check their business address and office. Is the address real? Can you visit the office?
- What payment and delivery options are available? If Cash on Delivery (COD) is an option, perhaps you should try this method first with a less expensive item and see how the experience goes.
- Call their customer support BEFORE you buy. Can you get through during their open hours? How long are you on hold? Is the experience nice? If problems arise, this is the same experience you’ll get later. Also, listen to the background. Do you hear other customer service agents? Is it quiet? Activity is a sign of good business. Zalora and Metrodeal have 20+ agents, you will certainly hear when you call in
- Send their support team a simple email… how long does it take to get a response?
- Check if there are guarantees offered on the website, such as “free returns for 30 days”. This is a strong indication that the company is proud of the quality of their products and is looking to build a good reputation
- Sign up for their free newsletter. This is also an indication of the quality of the company. You can see their product offering, how it changes over time, and the level of effort required from their marketing team to put together a professional newsletter. An online site looking to scam someone won’t invest in this capability
- Check the “About Us” tab, or other articles online. Who are the company owners? Who are the investors? Sites like Zalora, Lazada, and OfficeFab are owned by Rocket Internet, who recented received $50M+ in investment from JP Morgan. JP Morgan would not invest that kind of money into a company pursing scams as a means to generate revenue. If you have trouble finding information about the owners, that is an indication of potential trouble
- For group buying sites, you also need to verify the quality of the business offering the deal. How long have they been in business? Do they maintain a website and facebook page with real followers and community? Call the establishment, ask them where their offices are, how long they’ve been in business, have they offered deals previously, how do they handle the massive volume of purchases? If this is a travel deal, you might have 2 companies to check on… the travel agency and the resort or tour operator
- Go to sites like domaintools.com to check the registration details of the site. Is the person there real? Is their business information listed?
- Forums and Blogs can be helpful, but many times are a giant waste of time. If you see a blogger or commenter who had a bad experience, try to contact them to see if the company fixed the problem in an agreeable way. Many times people post their frustrations online, and then never follow up to say the problem was fixed. Also, it is common in the online shopping space for competitors to go through blogs and forums and write negative comments to spread fear and doubt about their competition. Knowing this ahead of time will save you time when you are shopping.
Let us know in the comments if you have other good ideas for checking out the quality of online companies in the Philippines.