A massive 38% of the Philippines’ E-commerce transactions take place in Metro Manila. This huge share has resulted in the country’s National Capital Region (NCR) having a very competitive online market. When a majority of customers are all in one area, most businesses are incentivized to cater specifically to them.
For E-commerce businesses based outside of the area, it may seem difficult to break into this market. Working with a logistics company in the Philippines – especially one that offers warehousing services – can help you get a leg up in this space. Having an NCR warehouse has a huge impact on how your business can compete in the Philippine E-commerce landscape.
But before we get into that, let’s look into the reasons behind the increase in NCR warehouses.
Why is there an increase in Metro Manila warehousing?
In the Philippines, warehousing services have continued to grow despite the COVID-19 crisis. It has become an indispensable industry, providing the necessary support to other industries as new economic and social protocols emerged due to the pandemic. Because of this, its growth will likely be sustained post-pandemic.
During this period, Metro Manila has seen a growing demand for online shopping, deliveries, and consequently, warehouses. But what drove the exponential growth of warehousing in Metro Manila over the past few years?
More room is needed to manage the demand in E-commerce
The E-commerce sector has been one of the major demand drivers for warehousing markets across the globe. In the Philippines, Filipino consumers have relied heavily on the convenience of online shopping due to the pandemic and lockdowns. As E-commerce in the region continues to flourish, there is a higher demand to fill the increased number of sales, particularly in the metropolis and its neighboring provinces. As such, warehousing services in the Philippines, particularly in Metro Manila, needed to address this.
It is a strategic location due to accessibility and proximity to customers
The metropolis has become a gateway for warehousing services to flourish. Being at the center of commerce, Metro Manila has accessible key delivery routes via airports, ports, and major transportation hubs. It is also an ideal hub for warehousing services in the Philippines as major business districts are in the vicinity. And when it comes to proximity to customers, Metro Manila is home to close to 12 million Filipinos, making it a perfect spot for warehousing.
There’s a need for speed
The big guns in E-commerce have set the standards in terms of delivery speed. Customers are now accustomed to ordering online and receiving their purchases as soon as the next day. This has put immense pressure on smaller E-commerce companies to shorten their delivery times. As such, warehousing providers have established multiple locations in Metro Manila so that they can fulfill orders as soon as possible.
Retail spaces turned into fulfillment hubs
According to real estate experts, retail industry players have already bared plans to convert their spaces into warehouses. In 2020, the average vacancy of malls across Metro Manila rose to 12.5% due to the closure of many brick-and-mortar stores. Many vacant spaces have now been converted to warehouses, mainly to accommodate the retail industry’s shift to online platforms. This contributed significantly to the rise of warehousing services in Metro Manila.
The competition to attract more customers has become tougher
As E-commerce grows at break-neck levels, the competition to attract and create loyal customers has become extreme. Warehousing is crucial to ensure that merchants remain on top of their E-commerce game.
Choosing a warehouse in a strategic location like Metro Manila allows merchants to decrease resources used between each point. The more warehousing services are available in the area, the closer they become to their customers. This also means that fast shipping and easy returns — two factors that customers have high standards for — are possible. And this results in increased sales and growth in the long run.
There are more reasons why Metro Manila has become a hub for warehousing services in the Philippines. But more than these reasons, one thing is sure: warehousing providers in Metro Manila have enabled thousands of local and international merchants to scale their E-commerce business effectively.
Now that you know about the reasons behind the warehousing boom, it’s time to look into why you should invest in an NCR warehouse.
Why does your business need an NCR warehouse?
More efficient operations
If you’re a merchant based outside of NCR, delivering to the area on a per order basis can be difficult. However, you don’t have to relocate your entire operation to cater to that market.
With an NCR warehouse, you can efficiently keep up with your customers’ demands. When they order from you, it’s just a matter of shipping the stocks you already have stored in your warehouse.
Working with a logistics company with an NCR warehouse removes the hassle of having to look after your products. They can monitor your items to help you keep track of your inventory while you’re away. There are also teams there assigned to ensure the safety of your items from packing to pick up. This gives merchants one less thing to worry about!
Lower shipping fees
Having an NCR warehouse helps lessen the shipping distance between you and your customers. The shorter travel helps merchants spend less on delivery fees, in comparison to if their products were shipped directly from outside Metro Manila. This results in reduced overall delivery costs, which allows you to save money over time.
If you keep a customer waiting too long for their order, they have a tendency to cancel it. There’s even a chance of them switching to another merchant that can deliver the same item but faster.
With an NCR warehouse, you can get your products to customers within days even if you’re based outside of Metro Manila. This is in contrast to when your products come from a farther place and customers have to wait for up to a week or two for their orders.
There are even some logistics companies in NCR that offer same-day and next-day delivery, which ultimately helps increase customer satisfaction.
Related: Ultimate Guide to Warehouse Management in the Philippines
Attract more customers
Once you combine all the benefits of an NCR warehouse into one seamless experience, you have a better chance of getting more customers.
For online shoppers, the advantage of getting their order faster has a big bearing on their purchase. This is especially true when the quality of your products is on par with the rest of the competition. The more times you win over these potential customers, the easier it becomes for your business to achieve success.
These are just some of the logistical advantages of having an NCR warehouse. Ultimately, being strategic about your warehouses will help you enter the area’s highly profitable E-commerce market.
If you’re looking for a logistics company in the Philippines with innovative warehousing services, then look no further than Payo!
As the country’s leading E-commerce enabler, Payo has a wide array of services that can handle your business’ needs. These solutions range from Fulfillment, Last Mile Management, and of course, Warehousing.
Aside from the usual warehousing service, Payo also offers a Multiple Warehousing Solution. This means that your items are stored in warehouses located within different major cities across the Philippines. This helps keep your business flexible, so you can adjust your storage based on wherever your customers may be.
Sign up with us or send us a message at [email protected] to get in touch with a reliable warehousing partner for your business!