Thriving in Gift-Giving: The FilipinoGifts.com Experience

Last November 1999, 23-year old Jason Dela Rosa and Wilbert Cua, founders of Prime Logic Corporation, conceptualized FilipinoGifts.com. The site started with six (6) products such as gift baskets. They have opened a company in Seattle, Prime Logic USA to handle its credit card transaction.

Now it has grown to over 100 products with merchant partners like Crabtree and Evelyn, National BookStore, Insular Life, and Crossings. They believe that creating good relationship with partners and suppliers will lead to good customer service.

The site has more than 400 subscribers and 35 percent of it generates repeat business for the site. Its customer order usually comes from US, Canada, Middle East, and Europe and afterwards delivered in the Philippines through its partner, Aboitiz One.. The most saleable items on the site are the perfumes and flowers.

The site earns from the mark-up per product. “We are like retailers. We sell products at retail price and get it in wholesale price,” said Dela Rosa. “We are already getting US$16 to 20 thousand revenue last August 2000.”

Challenges
FilipinoGifts.com is not a stranger to anomalous orders and credit card fraud. One time, it experienced receiving an order worth 40 thousand pesos in one transaction. To counter fraud, they created a strategy to be able to trace doubtful transactions. Whenever an order is made, they look first on the buying history of the customer before it processes an order. If the buyer has a bad transaction record already, FilipinoGifts.com bans the buyer from the site.”

There are other problem areas such as customer service, fulfillment, and pricing. Most of its customers are from far distances and there’s a need to make the customer feel assured about their orders. “One of our customer service strategies actually lies in constantly communicating with our customers to ensure them that their gift will be delivered to their loved ones – and that means telling them where their product is,” said Dela Rosa.

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

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

Another one 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 share base,” he added.

Lack of high bandwidth technology, the infrastructure, is a common issue as well to most start-ups. “We have the brains but don’t have anything much to work with.”

Like most sites, funding is heavily needed to invest in the marketing and promotion of a site. “Actually, in our experience, the biggest expense is marketing. It’s not technology,” said Dela Rosa. “Spending money on advertising should create value in return and the company’s strategy has to create demand outside the Philippines.”

Searching for the Right Partner
Choosing a partner is very difficult and Dela Rosa didn’t look for funding to just anyone. He has his own criteria. “A prospective partner should have a network and the proper channels for us to use and benefit from,” he explained. “The next step for FilipinoGifts.com is to bring it to a bigger level, the regional level and eventually gifts selling all over the world.”

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

He said FilipinoGifts.com will continue to expand its features and this includes product rating system and customer review system. It intends to get more partners to build a wide array of products to choose from for its customers.