ROSARIO INSTITUTE 1

“A Tradition of Quality Education”

Impacts of E – Commerce in the Local Market in Rosario, Cavite

A Research Presented to the

Senior High School Department of
Rosario Institute

In Partial Fulfilment of the Requirements

for the PRACTICAL RESEARCH 2
S. Y. 2019 – 2020

SUMMITED TO:
Mr. Jomarie D. Emilliano

SUMMITED BY:
Abutan, Leidee Clarizze

Abutin, Erick Jhon

Balbuena, Aubrey

Dagaas, Mark Kaylle

Desacada, Joseph

Durana, Jhoana Mae M.

Eraga, Ella Kyla R.

Garcia, Andromeda Francine

Ilagan, Diane Kristel

Roncale, Louie
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ROSARIO INSTITUTE
C. Abueg St. Poblacion 1 Rosario, Cavite
“ A Tradition of Quality Education”

APPROVAL SHEET

The Research Study Entitled “ _____________________________

___________________________________________________________
__________________________________________________________”
prepared and submitted by Group II Vectors under STEM Strand as partial
fulfilment for PRACTICAL RESEARCH 2, has been examined and is
recommended for acceptance and approval for oral examination.

Approved by the committee on Oral examination with the grade of

__________%.

APPROVED

NOTED

_________________________________
Teacher in Practical Research

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ACKNOWLEDGEMENTS
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TABLE OF CONTENTS
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CHAPTER I
INTRODUCTION

1.1 Background of the Study

1.2 Statement of the Problem
1.3 Hypothesis
1.4 Conceptual Framework
1.5 Scope and Limitations

The main focus of this project was the impacts of the e-commerce industry

in the public market of Rosario, Cavite. The study will propose different

techniques and stategies for the vendors of Rosario public market to be

able to cope up with the effects of technological advancements in the

business. The proposed idea is limited only to those businesses that does

not use the social media to promote or sell their products. The project can

be used in all existing traditional commerce businesses in the Philippines.

Some calculations, assumptions, and selections were made as a

consideration of a proper and realistic design.

1.6 Significance of the Study

This study is very much relevant to present times as this will make

awareness about the impact of Ecommerce upon the local market of

Rosario, Cavite. The emergence of ecommerce has adjusted to a greater

extent which is the greatest cause of concern of retail store owners. This

study will help the store owners to have an idea with the upcoming threats

of Ecommerce which can help them formulate advanced strategies and

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techniques. By informing the retailers with the factors that affects

consumers the most, they would know the aspects of their business that

needs further improvements. It will help them boost the consumer's level

of acceptance. Developing the mechanism of business can help them

attain their goal of earning profit.

1.7 Definition of terms

CHAPTER II
REVIEW OF RELATED LITERATURE

2.1 Foreign Authors

Popularity Comparison between E-Commerce and Traditional Retail Business

Based on this research, most consumers are more accustomed with

online shopping and the purchasing process is getting easier with the passage of

time. Also, there are a lot of advantages of e-commerce, like the creation of new

opportunities for businesses and new ways of distribution; access to global new

customers; expansion to new markets; increased competitiveness, rapid

response to needs and shorter delivery chains, all of which leads to a reduction

in the final product prices and better customer experience. The segment of the

population that is more involved with the internet is the relatively younger

population, with powerful technology such as the Internet, this customer

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segment has access to extensive information and combined with the boom of

social media in which this generation is the main participant, creates a strong tie

between social media and e-commerce. They are strongly co-related because the

engagement and popularity of these new forms of virtual socializing is increasing,

even when young users are scrolling down the photos in their Instagram account,

they can see a post of an influencer which may not be any promotion, but with

the single fact that an “admired” person is shopping in a certain place, or using a

specific brand, unconsciously generates a brand presence in the mind of the

consumer. Therefore, when these young consumers search information of that

brand, regardless whether the store is in another continent, or it does not

physically exist, they know that a purchase can be made. Companies should be

prepared to catch the attention of such customers and guide them through the

purchase.

The Influence of Electronic Commerce on the Traditional Trade of Our Country

The rise of electronic commerce has changed the business environment,

especially the traditional industries. Electronic commerce to subvert the

traditional business model of the industry, the user of electronic commerce has

become an important war to determine the traditional industry and the life and

death. Traditional industries need to face up to the problems existed in its

business operation, decision makers need to change of enterprise operating

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concept, the formation of professional business team, from the operation

channel, and so the overall change to cater to the operation mode of electronic

commerce. Traditional industry wants to do e-commerce was not built in a day,

but as long as the master of electronic commerce operation rules and patterns,

can be found in new opportunities and business opportunities.

The impact of e-commerce on small-size companies in Sweden

This study shows that Swedish companies can be characterized with

relatively well developed e-commerce strategies comparing to other countries.

At the same time, differences between small and big companies in Sweden are

being observed. As expected, the biggest company have reached more

sophisticated levels of adoption. The decisions for e-commerce adoption in

small-size firms are dependent on the knowledge of the owner/manager. Today,

most of the small companies use e-commerce as a marketing tool and putting

much importance on the information exchange and informing customers for the

products and services. This study shows that the improved internal efficiency and

increased information exchanges are the main benefits from e-commerce for the

small companies. By increased information exchange companies are able to

cover much larger customer area and attract new customers. Being more

informed for the characteristics of the products, customers are more satisfied

and more willing to make orders. This study highlights that companies are
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shifting to a new way of finding customers which allows decreasing of their

expenses for advertisement. At the same time companies experience cost saving

by improved day-to-day operations. The most important barriers for the small

companies are the lack of innovation culture and knowledge. Even if some

companies still consider the cost factor as most important this is because of

insufficient understanding for e-commerce and the positive effect of it. This in

turn leads to non-consistency or stopping the process of innovation. Other

important barrier is the lack of customers demand. Further, the study shows that

many of the small companies will not gain substantial benefits from these

improvements because of the character of their businesses or market which does

not encourage the process of innovation.

Electronic Commerce: A Study on Benefits and Challenges in an Emerging

Economy

The e-commerce industry will be a leader with popularity in electronic

business world in the upcoming years. The e-commerce revolution has

fundamentally changed the business of transaction by giving new opportunities

and 201 22 Global Journal of Management and Business Research Volume XVI

Issue I Version I Year breaking borders easily. In Bangladesh, it has strongly

impacted the traditional business system and changing the life of people by

making it easier. While it gives benefits to customer and seller, e-commerce gives
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challenges to traditional business for competitive position. Developing countries

face many obstacles that affect the successful implementation of e-commerce

with the help of comparing with developed country. When the internet cost will

be low then the e-commerce will flourish easily and will make many of traditional

business to run out of their business. Convenience is one of the benefits that

customer gets from the e-commerce and thus increasing customer satisfaction.

This is due to customer can place a purchase an order from anywhere with

internet connection. E-commerce business provider should give importance on

every customer by giving smooth service and many options for payment and

have more functions available online. Other benefits are expanded product

offerings and expanded geographic reach. But e-commerce business faces a lot of

challenges in flourishing their business.

Impact of growth of E - Commerce on traditional business

With the advancement of the circumstances, many new things are

coming up, such as e-commerce. So what is e-commerce? E-commerce is online

business, which includes everything in this present time, for example, retail

shopping, banking, stocks and bonds trading and so on. Alongside the

appearance of the e-commerce, its effect is self-evident, particularly on the

traditional companies.
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These days, many traditional companies have made great progress with

the help of ecommerce, for example, MH Industry Co., Ltd. Mh-chine.com is its

site to carry out e-commerce business. What's more, numerous customary

organizations need to have better advancement. Here is my opinion on the effect

of e-commerce on the traditional businesses.

To start with, it can save labor costs. E-commerce is not the same as the

traditional business in terms of the number of employees needed. It doesn’t

need so many staffs, such as sales executive, sales managers, accountants, and so

on. But, what e-commerce need more is technology. For example, you can set an

automated assistant to the inputs of the customers, which can save work as well

as improve proficiency. In fact, traditional businesses can achieve huge success

with the help of e-commerce.

Second, an enormous development will be given through online business.

Previously, when we come up with a new product, we invested much time and

money on a decent promotion to make the item known. Opposite to that, e-

commerce can make the customers everywhere throughout the world know the

item through the website with much less effort.

Third, it can build sales channels. E-commerce creates another

distribution channel for existing items. The customer needn't to go to the stores
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or shops to purchase the item, while they can do it at home. E-commerce

permits online trading and online payment, which will pull in more potential

customers. By along these lines, the traditional business can take the local

market to the worldwide market.

As each coin has two sides. So does e-commerce, it has certain

disadvantages as well. Hence, there are a few noteworthy issues.

First, as we probably are aware, e-commerce is dependent on the

Internet. So it is important to be comfortable with the computers. Essential

information is required. There is no replacement for good planning, if you want

more traffic into your site.

Second, internet business is full of high risk. Customers can't see the

genuine item until the point that they get it through online shopping. All the

transaction is helped out online. As the popularity and reach of internet has

increased, there are more options available online. And so the online frauds have

also increased. In this situation, brand value and high reputation will attract more

customers. So, it is sensible to cultivate a positive corporate picture.

With everything taken into account, the effect of online business can't be

ignored and, the acknowledgment and commonality of e-commerce for the

traditional business will take some time.

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E-commerce and Its Impact to Retailers

As technology is rapidly evolving, there is greater need for retailers to find

out new ways to connect with their customers. With up-and-coming wearable

technologies and refined mobile products, customers are shopping online in

more ways than one and are using technology on a daily basis. For the retailing

industry, E-commerce has increasingly become a necessary component of

business strategy and a strong catalyst for economic development. E-commerce

offers buyer and sellers a new method of communication and offers

opportunities to create new marketplace and has created new activities and

features in which consumers and businesses can participate.

Nevertheless, e-commerce made it possible for retailers to gain potential

customers, improve communications, tracks finances, increasing research and

improve their brand easier than before, as well as increase sales in a cost-

effective way. It has made their stores a secondary option to sell their products

since customers prefer an easier way of shopping which is through the use of e-

commerce. Retailers are now able to sell their products all over the world. This

has made the potential for the retailing industry to increase their revenue and

customer base dramatically. This have created pressure to retailers since their

customers are increasing. They must be able to predict this and create a cost-

effective way of delivering their products to consumers by merchandising on

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shelves and having a trust worthy distribution centers who will handle the

products directly to their customers. With this said, E-commerce revolutionized

the way retailing industry works through its consistent growth and has become a

standard way of retailing to consumers.

Before, when there were no e-commerce, retailers were restrained to

only local and domestic consumers which was tough for them to create sales. E-

commerce has made it possible for products to be sold at a global scale. This

have made it possible for retail brands to be visible worldwide and had created a

global competition scene. With e-commerce, shops will be able to sell their

products 24/7 while keeping their costs at a minimum. It can also prevent over

staffing because e-commerce will be its own sales person. With e-commerce

emerging in our world, the products will have a high availability for all

consumer’s needs and wants.

Whilst retails who depend on the traditional ways might have a hard time

competing against the E-commerce world. They will be stagnant to their own

area while losing against the innovative ideas other retailers have dependent

upon.

2.2 Local Authors

Adoption of Ecommerce in Manila

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This study examined the factors of consumer acceptance of E-commerce

in Manila, Philippines. The results showed that the ease of understanding,

personalization and reliability are good indicators to predict consumer intention

to accept E-commerce. The research framework applied the updated DeLone and

McLean (D&M) model of IS success. The results supported the hypotheses

developed from the model and prior studies. An understanding of the factors in

the study permits the E-commerce producers to concentrate their resources and

improve necessary strategies to motivate internet users to switch to E-commerce

and to increase their market share in the future. These producers need to adapt

to fast-paced changes in technology to attract new E-commerce users.

Introducing the most advanced data encryption algorithm and the certificate

VeriSign for website identity and authenticity verification ensure the security and

privacy of E-commerce users. Future research is still considered necessary. A

research can be made on other factors that influence the acceptance of E-

commerce such as functionality, efficiency, completeness, relevance and security.

Other technological adoption models can be applied such as Technology

Acceptance Model (TAM), Theory of Reasoned Action (TRA) and Theory of

Planned Behavior (TPB).

CONSUMER PERCEPTION AND PURCHASE BEHAVIOR ON ONLINE SHOPPING

AMONG STUDENTS IN MINDANAO UNIVERSITY OF SCIENCE AND TECHNOLOGY
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The findings of the study revealed that the consumer perception and

purchase behavior among MUST students were generally high. It is then

established that there was a high significant relationship between the

consumer perception and purchase behavior on online shopping among the

students who engage in online shopping. Substantially, the increase of consumer

perception on online shopping can lead to an increase of purchase behavior. To

sustain their high perception on online shopping, it is recommended that the

web developers will incorporate features on their websites regarding

convenience, security, benefits, and leisure. The future of online shopping is

promising as an entrepreneurial activity. With this, substantive improvements

have to be done on the features of online shops that are in accordance to the

results of this study.

The common target clients for this type of market are the youth such

as the students. Such that to increase sales, it is important for online marketers,

entrepreneurs, and businessmen

to consider the fact that students spend more time on the internet and that this

factor will likely increase the students’ online shopping behavior. Furthermore, it

is suggested for future studies to compare the elderly age groups with

younger consumers on their perception and purchase behavior towards

online shopping so that wider coverage can be achieved by the online shops
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and thereby maximize business opportunities.

The Employment Impact of Business-to- Consumer E-Commerce on Philippine

Workers
Total e-commerce related revenues as of the year 2005 is projected to

account for about 1% of (nominal) GDP, contributing up to 8% of GDP growth.

When compared with Asia and the U.S., these figures suggest that the Philippines

has a rather slow pace of adoption of e-commerce. Nevertheless, the steady

growth of revenues due to e- commerce, as well as the increase in contribution

(in terms of percentage) of e-commerce to GDP growth, also suggest that e-

commerce has the potential to have a big role in promoting overall Philippine

growth and recovery in the long term.

Philippine retail industry gears up for the future

MANILA, Philippines – Get off a bus stop anywhere in the metro and you're likely

to be near a mall.

Indeed so ubiquitous are malls in the country that the top 3 business

groups here – SM, the Ayala Group, and JG Summit – have all built their empires

on the back of their retail behemoths – SM Supermalls, Ayala Malls, and

Robinsons Malls, respectively.

These malls have become such a fixture that they have transcended mere retail

and have become part of the culture, even featuring Holy Mass services, as SM
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Investments Corporation (SMIC) vice chairperson Teresita Sy-Coson pointed out

at an Association of Southeast Asian Nations (ASEAN) forum earlier this year.

One may think then that traditional brick-and-mortar retailers' position as a key

node in the consumption-driven economy is unassailable. Like many other

industries, however, they are in danger of being supplanted by internet

companies in the form of e-commerce.

"In the developed world, the share of e-commerce is still quite small in terms of

overall sales, slightly less than 10%," said Paul Santos, president of the Philippine

Retailers Association (PRA), at the Stores Asia Expo 2017. The expo was held from

August 10 to 11.

"In the Philippines, it's no more than 2%. But it's getting a lot of buzz because it's

starting from a low base, it's growing, and there's lot of innovation from that

sector," he added.

That the industry is widely conscious of this threat is evidenced by the theme for

this year's Stores Asia Expo: future-proofing retail. "We want our members to

obtain insights into how to conduct their business in the light of the growth of e-

commerce," Santos explained.

It's just as well since it's a crucial time for traditional Philippine retailers, with e-

commerce giants Alibaba and Amazon looming over the horizon.

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Chinese giant Alibaba, now the world's largest retailer by market capitalization,

has entered the Philippines by acquiring dominant local player Lazada. Amazon,

meanwhile, announced its entry into Southeast Asia, starting with Singapore.

Phl e-commerce boom bad for malls, retail stores

MANILA, Philippines — The Philippines is expected to become the top e-

commerce market in Southeast Asia as early as 2020 – a not so welcome
development for Filipino malls and retail stores as this could spell doom for their
operations.

The Philippine e-commerce industry, valued at over $1 billion, is expected to

grow exponentially in the next three to five years, according to Inanc Balci, chief
executive officer of Lazada Philippines.

“We are definitely not at the top of e-commerce (across Southeast Asia), but we
are on our way to being on top. I believe the Philippines will be the top e-
commerce country in Southeast Asia in the next three to five years. In the
medium term, after 2020, we have the chance to be at the top worldwide,” Balci
told The STAR.

“I don’t see any reason why it should grow slower. Because when you look at the
market dynamics, like smartphone growth in the Philippines, it is one of the
highest in the world. The Facebook penetration in the Philippines is one of the
highest in the world, Filipinos are internet savvy, they now enjoy a high
disposable income and they do a lot of retail spending. So we believe these are
the best conditions any e-commerce company can hope for,” he said.

Having the distinction of being the top e-commerce market may not be a
welcome development for the country’s mall and retail store owners.

In the US, malls and prominent retail store brands are closing down as more
consumers embrace online shopping.
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The SM Group, owner of the biggest chain of retail stores and the largest
shopping mall developer in the country, recognizes that such a trend is
happening in the US and is preparing for its occurrence in the local shores.

“There is a digital change. We just have to see how to improve ourselves to have
business alongside them (e-commerce platforms),” SM Investments Corp. vice
chair Teresita Sy-Coson said.

Asked on the possibility of SM, which has 63 shopping centers across the country
to date, closing down branches, Sy-Coson said: ”We’ll try not to. We are part of
the Filipino lifestyle so we’ll try to continue that.”

SM, seeing the need for an online platform, earlier this year entered into an
agreement with Lazada to sell merchandise online, starting with light-to-carry
non-food items.

Lazada, an online marketplace part of the Alibaba Group of Chinese billionaire

Jack Ma, has been instrumental in the growth of the Philippine e-commerce
industry in the past few years.

The online marketplace also operates across the region in countries like
Singapore, Indonesia, Malaysia, Thailand and Vietnam.

For Balci, however, the rise of e-commerce should not be regarded as a threat to
traditional brick and mortar stores.

Balci said sales from offline stores continue to constitute the bulk of the total
retail sales in the country.

“In the mid-term I don’t believe that e-commerce will be higher than offline retail
in the Philippines, but you never know for the long term,” Balci said.

“You never compete with offline retailers,” he said, noting that an online
marketplace is an additional platform for offline retailer to reach out to more
consumers.

“When you go to shopping malls in the Philippines, most of the stores there are
selling on Lazada. They use Lazada because they cannot open stores in all 7,000
islands in the Philippines and not everyone can go to their store. When you go to
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Lazada, millions of people can get access to your products. We don’t compete
but we complement with offline retailers in the Philippines,” Balci said.

2.3 Synthesis

CHAPTER III
METHODOLOGY

3.1 Area of Study

3.2 Research Design

3.3 Research Instrument

3.3 Population Sampling of Respondents

3.4 Statistical Treatment of Data

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APPENDICES
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CITED REFERENCES
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