Group Buying In The Philippines Leverages On The Internet Boom

The robust growth of online discount deals indicates the strong potential for e-commerce in the Philippines. One of these sites doing so is MetroDeal-from featuring just over 800 deals in 2011, MetroDeal, whose offers cover everything from spa visits and buffets to eye operations, amounted to more than 2,000 deals in 2012. In just two years, the site has emerged as the country's 35th most visited website, according to Alexa.com, even surpassing that of a popular budget airline's.

The Philippines' potential has much to do with its being in a region that has the highest number of Internet users in the world. In 2010, Asia Pacific added 30 million new users to bring its total to 534 million, the most of any region, according to Internet market data provider comScore. In 2010, Internet users increased 16 percent in the Philippines, outpacing the growth in Malaysia, Hong Kong and Singapore. The Philippines is the top Facebook market in the world and among those with the highest social network penetration rates in Asia.

Niche Market

Barely two years in the business, MetroDeal has already carved a niche ahead of its competitors. It was the first to make breakthrough sales in beauty treatments and buffet deals.

It matters greatly that MetroDeal founder Ralph Wunsch, a 26-year-old Filipino-Austrian who began his group-buying career in Europe, knows whom to target. In this case, it's Filipino shoppers who ''value good deals.''

Wunsch moved to the Philippines in late 2010. At that time, Filipinos had already seen the benefits of group-buying, a scheme that allowed them to purchase vouchers to dine in fancy restaurants, stay in hotels and get spa treatments at huge discounts of up to 90 percent. Drawing from his experience in Daily Deal, a group-buying site in Austria, Wunsch drew up a plan for the MetroDeal site. Because he had connectivity problems in his relative's home, he worked out of a fastfood restaurant with free Wifi. With just a laptop to assist him, he launched MetroDeal from one of the guest tables.

For the next six months after opening Metrodeal, Wunsch was a one-man team. By end-2011, he had employed 30 people at the Enterprise Center along Ayala Ave., Makati City. By end 2012, his staff complement had grown to 55.

Wunsch attributes his success, particularly with his mostly female market, to the insight that ''vanity sells.'' The site offers an array of beauty products and treatments, apart from its many buffets, pizza and food deals.

The young entrepreneur points out that MetroDeal benefits both buyers and merchants. The deals offered by merchants are only for a limited period and succeed in driving walk-ins to their stores, as well as in increasing sales. One merchant offering a buffet cruise deal sold over 40,000 vouchers in just 48 hours. MetroDeal's current merchants include Manila Ocean Park, Dermcare, Yoshinoya, SM Skating, SM Bowling and SM Gamezone.

MetroDeal is the only local group buying site with a dedicated call center manned by 25 agents who entertain calls from 6 a.m. to 12 midnight daily. The firm seeks to attract a varied age group. Deals that appeal to younger age groups are posted on its Facebook page, which has already attracted more than 600,000 fans. According to Wunsch, he is proud that his company ''has generated savings for our users amounting to billions of pesos.''

MetroDeal also opened a site in Indonesia last 2012 and plans to open shop in Thailand and Vietnam this year in a bid to pursue strong growth in a region of bargain hunters.