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Is the Philippines’ internet bubble going bust?




This month, two of the long-time online services have closed down in the country along with other similar offices in the region. One is the daily deals site turned online retail store, Ensogo, while the other is a jobs site, JobsDB. Of the two, JobsDB Philippines has been in operation the longest – about 17 years since they opened in the country. It’s also one of only two major players in its category so we can’t help but be puzzled by this development.

JobsDB’s official Facebook Page has since posted an announcement for people to hop on erstwhile rival, JobStreet, even calling it “the No. 1 Job Site in the Philippines”. Perhaps the market has shrunk and could no longer accommodate two big job search portals.

Ensogo’s demise is much less surprising, considering that the excitement for daily deals and group buying has died down for quite some time now. Besides, there were many other similar sites that closed down years ago. It was only a matter of time before the numbers are narrowed down even further. The last big one was Groupon/Beeconomic back in September 2015. This leaves old-timers like CashCashPinoy and MetroDeal in the space, although the owner of the latter has also made a smart exit by selling to Japanese investor, Transcosmos.

In the classifieds market, car classified ads site Tsikot have also been recently sold to Now Web Solutions. Though the amount is undisclosed, we don’t think it’s anywhere near the Php100 million offer MIH made to them back in 2011.


The biggest player in the classifieds ad space was Sulit. Founded in 2006 by freelance developer, RJ David, the two-man start-up was snapped up by MIH in 2009. Singapore Press Holding came in with AyosDito to challenge Sulit’s monopoly in the Philippines. Sulit was eventually merged with OLX in 2014 which is also owned by Naspers (parent company of MIH). Later that year, AyosDito would close down and direct all traffic to OLX.

Recent players like Lazada and Zalora, both owned by German-based Rocket Internet, are taking much of the attention and market share in the local e-commerce space. Lazada could be considered the biggest online store in the country, with over 10,000 transactions a month , since they opened up shop 4 years ago. However, both online stores aren’t profitable with a combined loss of about $235 million, according to its 2014 filing from all their combined market.

There are also newer entrants like social news site Rappler and regional news network Coconuts Media (Coconuts Manila in the Philippines) as well as well-funded start-ups like job-matching engine Kalibbr, price comparison site PricePrice.com, PayrollHero, ZipMatch and PawnHero.

These new batch of tech start-ups have yet to be truly tested if they can grow to a significant size, scale, and eventually become really profitable. Some have shown promise while the rest, well, we have yet to see.

References:



Abe is the founder and Editor-in-Chief of YugaTech. You Can follow him on Twitter @abeolandres.

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11 Responses

  1. Johlibee Man says:

    a lot of people in the Philippines still don’t trust payments thru online. that’s why they don’t deposit or use something like coins.ph Most always think that the best way to buy is by going to the mall and get the item itself. and expensive wireless internet is just too expensive for now

  2. Easy E says:

    We still have this.mentality not to trust local brands/ startups. Sad.

  3. Ron Biscaro says:

    Serious question po, what you do mean by internet bubble? :)

  4. Roko says:

    ha? I think the question is not internet businesses is being pop its just because bigger companies try to acquire them to solidify their market. that the just norm,

    also once we have better bandwidth speed, then more filipinos can trust the infrastructure to buy and sell online. eh ung pinagyayabang ng mga telecommunication na 3mbps, sa pilipinas lng yan kakahiya. nga nga. mga ulol sila. porket monopolize na nila ung market ganoon nlng.

  5. ross says:

    ito opinion ko lang baka nxt na mag Pop dyan binanggit nyo ung Rappler hehehe bukod sa pagiging bias at may kinikilingan pa, (Media Kiling), para sa akin din sayang ung pinag hirapan ng Sulit eh sa totoo lang sya na nga ung no. 1 classified website sa Bansa mahirap ata magpasikat ah, wala ng wenta ang OLx well opinion ko lang ito.

  6. ross says:

    salamat Ron mabuti nagtanong sa totoo lang ngayon ko lang din narinig yan term n yan, salamat din admin hehehe

  7. IS says:

    Can’t have a bubble if nothing blew to unmanageable proportions in the first place.

  8. MyTwoCents says:

    I think the word bubble here is misused. If businesses are closing then how can there be a bubble? Bubbles as coined in the business world refer to the increase in the perceived value of companies, in this case, internet-based start-ups, but in reality they are not. In other words, they are overvalued. Since these companies are not even listed in stock market, there is no bubble to pop so to speak.

    • deuts says:

      I agree with this. Bubble is not an internet parlance, it’s a business parlance. But not necessarily they are traded in the stock market. There can be a real estate bubble, for example, when real estate prices are too expensive than what they are fundamentally worth.

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