FEATURE ARTICLE - Explores the Boundaries of Online Shopping
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The Philippines´ commercial center mogul Ayala Group finds a new nook on the web via

The Internet has dramatically changed the way people shop. The World Wide Web means ´a twenty-four hours by seven days shopping experience´. In the last couple of years, as business equalizes, this new medium has made it possible even for small home-based vendors to compete with multinational companies.

Just recently, a US-based Internet Shopping Study reveals that online retail sales grew 66 percent to US$44.5 billion last year despite a bloody year for many dot-com merchants. Hence, several countries are following suit and are moving towards the establishment of information technology (IT) in their own backyards.

In the Philippines, for instance, commercial center mogul Ayala Group has found a new nook on the web via to pursue the companyÕs consumer oriented Internet strategy.

The virtual mall strives to be more than just an online shopping shrine, offering the latest in fashion, leisure, and entertainment. "We first started out as a lifestyle and entertainment portal but have since narrowed our focus to on-line shopping and ticket reservations," says Teodoro Limcaoco, Chief Financial Officer of iAyala Company, Inc., a joint-venture partner of Ayala Land, Inc. in undertaking

The two main sites on the web are a.k.a., an on-line mall and, which offers movie ticket reservations. Other links to include, an online guide to entertaining events around the country, and, a guide to Philippine products and travel spots. features content from magazines, such as Cosmopolitan, Preview, and FHM, while the latter targets overseas Filipinos and includes a link to Libros Filipinos, a virtual Filipiniana bookshop.

Barely one year old, the largest online shopping mall in the Philippines was launched on June 9, 2000. As it turns out, draws a huge crowd. The traffic is impressive, with average page hits of 300,000 per month.

Currently, is considered to be one of the few successful premiere-shopping portals in the web that targets Filipinos or shoppers with Filipino links. "Today, we have close to 70 merchants on our on-line mall and an array of 7000 SKU (stock keeping units)," says Limcaoco even as he anticipates the number of merchants to increase to a hundred by year-end.

Presumably, reaching out to consumers online may seemed to be just another channel of distribution when you have the name Ayala attached to it. Ayala has been synonymous with success and expertise in the 'real' store in the Philippines' premiere commercial hubs. But not so it seems for the retail czar who strives to maintain its industry leadership in both the Old and the New Economy.

During the launching of, Ayala Land, Inc. Chairman Fernando Zobel de Ayala talked about the role of this virtual mall. "There are no ifs or buts about this. Either we innovate and reinvent, or we decline."

The site is dubbed as the 5th Glorietta of the actual Glorietta 1 to 4 malls, though the E-store also works closely with them. Limcaoco explains, "The start-up costs for a merchant to join myAyala are so low that it does not make sense for a merchant to build their own site and bear all the development, hosting, marketing and operations costs associated with a site. Also, our site allows the merchant to concentrate on their business (which is selling) and leave the back-end (security, delivery, payments) to us. Contrary to what many think, we do not require a merchant to be an Ayala Center tenant to be a merchant on"

Limcaoco reveals that more than half of the sales are clearly gifts. Appliances, electronics, flowers, books and music are the biggest sellers on the site.

"We also receive donations on our site for Philippine charitable institutions (and make no money out of this!). has gained quite a following in the past 10 months. Today, we average close to 2,000 tickets for the movies in Glorietta 4 reserved over the Net per week. Sureseats is also available on WAP and SMS, since we believe that mobile customers are also important targets for us. We hope to bring Alabang Town Center and Greenbelt theaters on-line pretty soon."

Moreover, the joint-venture company is also in negotiation with other upscale cinemas to put them on-line. It has also partnered with TicketWorld to create the first real-time on-line ticketing purchasing system in the Philippines and it expects to launch pretty soon.

The largest online shopping mall in the Philippines requires the stores to sell their goods at prices equal to or better than those in the real (physical stores). "Some of the merchandise is even cheaper online," Limcaoco explains, "because it is less expensive to maintain a virtual storefront than a real one. Online sites entail less or no personnel, rental, and storage costs."

One of the challenges of electronic retailers such as is how to find their market in a boundless marketplace. With 7,000 web sites being built daily all over the world, it is easy for merchants and especially consumers to get lost in cyberspace.

Although Information Technology (IT) presents a limitless business potential, it will only be seen as a catalyst to more opportunities if businesses are better equipped and are more receptive of the on-going technological revolution.

"We have invested a lot in on-line systems so that our customer service people know where every transaction is in the process chain," Limcaoco stresses. This could also probably be the underlying message behind the siteÕs evolving into a company that has gone past just simple web retailing. "Our experience in both web-based selling and web-site creation has allowed us to provide web solutions and web-presence for several companies. Our success in moving over to the mobile world has also allowed us to create and sell wireless applications."

Would it be possible - if at all - for to replace the store-based Ayala malls? Much has been said about electronic retailing as an inevitable evolution that happens to the business-to-consumer (B2C) sector, and Limcaoco is quick to point out the difference. "We don't think it will replace a (real) mall," he says, even as he expects increased traffic on their site. "In the US, 2 to 3 percent of shoppers do online shopping," he explains, "because online stores address different requirements of shoppers."

He goes on to cite an example that those who buy clothes for themselves would prefer to shop in real stores to be able to try them on first. But those who are buying clothes as gifts may choose to shop online because it is more convenient. "I believe that shopping continues to be a very sensual business and therefore on-line shopping is material only to very specific needs or products."

Makes sense indeed, especially since where shopping is concerned, people will still want to do it the hard way once in a while.

In the meantime, online retailing is also here to stay even if some merchants are not. This underlying message from the's success story is coming through loud and clear.


The name Ayala has a proven track record in commercial centers development and management in the Philippines

There is merchant base support to ensure that very good products are on the site.

They target a specific niche in the borderless market - primarily Filipinos overseas and those at home, and secondarily foreign customers in Singapore, Hongkong, Taiwan, the Middle East, Europe (UK and Germany), Canada, and Australia.

Ayala invest heavily in technology-intensive online systems to meet the needs for convenience, and ease of shopping.


There are no ifs or buts about this. Either we innovate and reinvent, or we decline." - Ayala Land, Inc. Chairman Fernando Zobel de Ayala's speech during the launch of

One of the challenges of electronic retailers such as is how to find their market in a boundless marketplace.

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