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Hyperlocal to become part of new normal, says BPI

The COVID-19 pandemic has seen the emergence of a vibrant hyperlocal market, with residents preferring to buy and sell products within their immediate communities.

“The hyperlocal marketplace is expected to become part of the new normal due to its unique selling proposition. The proximity factor between the buyer and seller makes this model work and competitive even with other online options from larger companies. The ability to deliver products and services faster gives a tremendous opportunity to all participants in this ecosystem,” Bank of the Philippine Islands (BPI) Chief Digital Officer Noel Santiago told Digital Life Asia.

Supporting hyperlocal

Bank of the Philippine Islands Chief Digital Officer Noel Santiago said the online behavior of Filipino consumers has changed and that hyperlocal is here to stay.
Bank of the Philippine Islands Chief Digital Officer Noel Santiago said the online behavior of Filipino consumers has changed and that hyperlocal is here to stay.

Practically overnight, these communities set up Facebook and Viber groups. Here, neighbors could chat with each other and freely advertise their own products and services. These include home-baked bread and desserts, home-cooked meals, and fresh produce. They purposely kept the trade within the community to limit the entry of outsiders and simplify delivery and pick-up logistics. And while this was a response to the crisis, don’t expect hyperlocal to go away even after the pandemic ends.

“Other advantages of hyperlocal over existing ecommerce offerings are the familiarity and trust factor between the sellers and buyers. As hyperlocal operates within smaller geographical boundaries, the shops, restaurants, and other sellers will be a familiar brand or name to its buyers.

“The challenge now for us is to create programs to ensure that we’re able to support these hyperlocal entrepreneurs. We need to ensure that payments would be safe, convenient, and secure for both sellers and buyers,” Santiago said.

Santiago also noted that prior to the pandemic, more Filipinos preferred kaliwaan or cash-on-delivery payments (COD) when ordering online. The hyperlocal market has seen a shift to mobile and online transfers as the preferred mode of payment.

Embracing digital

“Digital transfers are feasible because there’s a certain level of trust when you’re dealing with your neighbors. The temporary waiver of InstaPay fees for transfers to other banks, coupled with people’s wariness about touching cash that may have been handled by strangers, made digital banking a great enabler for hyperlocal trade,” Santiago said.

BPI customers appreciated being able to send and receive money transfers in real time from the safety of their homes. Hyperlocal entrepreneurs particularly liked being able to easily track incoming payments on their phones or computers.

The COVID-19 pandemic has accelerated digital adoption among Filipino consumers. Does BPI expect this change in consumer behavior to be permanent?

“Yes, it is expected that this shift will potentially lead to a deeper adoption of digital financial services. The fear of technology has been largely eliminated, if not completely eliminated. Consumers have experienced the convenience and ease of using digital banking services. Having a wealth of information available at their fingertips empowers them to make informed purchase decisions. The new normal will be like the jump from SMS messaging to Viber messaging and chat,” Santiago said.

The new normal

As mobility guidelines become more relaxed, some hyperlocal entrepreneurs may want to expand their market beyond their immediate communities. This could give rise to the need for a modified mode of payment.

“If you’re buying from a complete stranger, you may be wary about sending money in advance. Because if you don’t get your item, you can’t have that reversed. This is why we’re looking for a digital solution to allow our clients to do COD transactions digitally,” said Santiago.

How does BPI plan to further support the growth of hyperlocal in the Philippines?

“We have a strong technology platform and payment partners that would allow BPI to work with our customers, understand their needs, and come up with the appropriate business solutions. One such business solution will be the capability for our customer to set up an online store and marketplace, and manage their sales reports, invoices, and related financial services.

“For the hyperlocal industry, we currently have our QR codes, which many small entrepreneurs have been using to transfer money safely and conveniently,” Santiago said.

How about you, will you continue buying and selling within your community?

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  1. Pingback:BPI on evolving role, encouraging Gen Z to save - Digital Life Asia

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