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July 10, 2012
How to...
BY ANNA PATRICIA G. VALERIO
Change with the Market
Once the go-to site for posting personal photos and connecting with family and friends, Multiply is now more known as the online address of many local shops. It shows that rebranding success lies on that often repeated but also often ignored rule: listen to the market.
Jack Madrid
Filipinos have a way of making things their own. Once they started using Multiply photo albums as seller showcases, with product details and prices instead of regular photo captions underneath, Multiply knew that it had to rethink its identity as a social network.
"It's because of the Filipino merchants that we decided to transform ourselves from a social networking site to a full e-commerce platform," Jack Madrid, Multiply country manager for the Philippines, said in an interview with BusinessWorld. "It took a few years for us to realize that e-commerce was going to be our future, but we did."
A shift from the social network model, which relied on advertising, to the e-commerce platform, which draws on transaction volume, could have been rough, but the transition is something that Multiply seems to be enjoying.
Having a familiar brand from day one eased the whole process of starting from square one. "It's very exciting, because unlike a normal start-up, we're a start-up that has several advantages," said Mr. Madrid. "We have a brand that is already recognized throughout Southeast Asia."
A different business also required a different breed of people to get things right. "The new model is much less advertising-focused," said Mr. Madrid. "There is a totally different set of skills that we want to hire."
Naspers, a South Africa-based multinational involved with electronic and print media, has a controlling stake in Multiply, and the former's presence has given the latter a big boost. "Unlike a start-up where the CEO tries to raise money, we don't have that problem, because we're quite well-funded by a shareholder who's very committed to becoming the biggest e-commerce and shopping destination in Southeast Asia," said Mr. Madrid. "Our parent company is a long-term player."
It also helped that Multiply understood that shopping is still very much a social activity. Online business transactions may lack the face-to-face factor crucial to strengthening ties with customers, but loyalties among online sellers and buyers still abound, with many buyers sticking to a roster of stores for their regular shopping stops and even becoming friends with the owners in the process.
"Over time it's no longer just about price and selection; it really boils down to trust," said Mr. Madrid. "Suki [regular buyer/seller] mentality is strong even in the online world."
As Multiply becomes a more robust platform for online businesses, it hopes to introduce transaction fees as a source of revenues. The free functionalities, such as the product listing, shopping cart, stock room and more payment facilities, are just some of the features that Multiply hopes will make its services more valuable to its users.
The site also plans to launch an upgraded version of its current platform, which will have even more payment partners and delivery options for sellers and buyers alike.
"People will only pay for what is valuable to them," said Mr. Madrid, recognizing that the transaction fees may turn off some of its users. "We hope that because of the buyers we will drive to their stores, they will realize that traffic is a big contributor to growing one's business."
The strength of Multiply, after all, is its online community. For the company, having a solid base of users as its main asset also means being sensitive to the changing needs of this market.
"Seldom in the Internet world do you have the opportunity to become what your community wants you to become," said Mr. Madrid. "[Multiply users] used the site in a different way, and we were the ones who adjusted. Normally, companies try to convince their users what they want them to be. In this case, they were the ones who told us."
E-commerce is still nascent in the country and represents a measly less than 1% of total retail in the country, according to Mr. Madrid — but the best time to enter the industry, for many, is when it is still in its early days.
As for Southeast Asia's part in the future of e-commerce, perhaps one sign that the region is emerging as an e-commerce hot spot is the opening of a Multiply office in Jakarta, Indonesia this year. Now the headquarters of the US-based company, the new hub is also the official office of Multiply CEO Stefan Magdalinski.
"I'm very excited that we're in the fastest-growing part of the world," said Mr. Madrid, who is also the president of the recently formed Digital Commerce Association of the Philippines. "I just want Multiply to be one of the architects of a very promising future for e-commerce."
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