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E-store taps Filipino’s penchant for ‘pasalubong’
By Meryl Marcon, researcher 
The Manila Times
June 26, 2003
View article on manilatimes.net

Encouraged by the prospect of having to do business with millions of overseas Filipino workers (OFWs), two friends established an e-business that offers over 1,500 products on a website that now gets 53,000 hits a day. 

In January 2000, Gerry Ditching and Robert Yap formed Filgifts.com, a website intended to serve OFWs by helping them send gifts to their loved ones in the Philippines. Experienced in card payments from working in Citibank, Ditching teamed up with Yap who runs an Internet service provider (ISP) business. The partners forked an initial investment of over P5 million. 

While working on the blue print of Filgifts, they hired a programmer to translate their ideas into a website. Then, by utilizing the excess bandwidth of Yap’s ISP, Filgifts began full operations by June 2000.

Establishing an Internet-based business at that time was very risky. Most “dotcom” businesses are closing shop worldwide. But for Ditching the Internet, or “wired world,” remained an unexplored world that challenged and lured him–even when everyone else was turning his back. The key they say is to be creative and find a niche market to serve. This is when they came up with the idea of an online gift-delivery service. 

Like in a department store, here visitors could shop from over 1,500 items in 20 different categories from electronics to perishable goods. “You just have to surf through the site, choose an item, and you already have a gift that’s on the way,” Ditching said, “You can even tell us the day you want it delivered.”

“The demand could be seasonal. During Christmas, the demand is for toys and dresses (sic); on Valentine’s Day its flowers, cakes and perfumes; and during school opening its bags and shoes (sic),” explained Ditching, the managing partner. 

Employing financial prudence, Filgifts subcontracted its delivery operations and limited the number of employees to nine–including officers. For the perishable items, Filgifts entered into tie-ups with other companies that specialized in products such as cakes and flowers. 

Long system downtimes, off-line payment links, and bandwidth problems sometimes hamper operations. “If the payment gateway is close, its like opening a store without a cashier, which constraints our operation because our clients cannot purchase a product,” explained Ditching. 

But despite the difficulties, Ditching aired his optimism. “As long as we keep high operating efficiencies, focus on our market, and overheads that are tightly guarded, then we can still be a viable business,” he said, “We’re not there yet, but getting there very fast.” 

Last month, Filgifts’ client base has reached 9,000 from around 4,000 in 2002, and only 2,000 in 2001. “Perhaps our biggest break is when satisfied customers refer our site to their friends,” said Ditching. He hopes to see the business reach the break-even point by yearend.

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