Why Multiply Marketplace Philippines is Closing Down

It came as a shock to everyone who spends a lot of their time enjoying the internet may it be personal, for online shopping or even utilizing the internet for selling stuff online to learn that Multiply’s Philippine Online E-commerce platform (Multiply Marketplace) is now shutting down.
I’m an MBA Student who has been studying online businesses and the Internet usage in the Philippines for years now and might be planning to publish a book in the near future. My thesis studies also leads me to the correct directions to conclude what I’m about to say. But it’s not really up to me to declare what the top management of Multiply are really thinking to make them decide to pull out of the Philippine’s Market.

#1 Problem – Monetary

In mid 2010, Multiply warned the public to back up their files as they are gearing up towards making the social media site into becoming an E-commerce platform that will let people post items they want or can sell to the public. All inactive accounts where wiped out and Multiply slightly changed with the emphasis of it’s market place. Soon the market embraced the platform as SME’s or just any bloke can just post in whatever they can sell online for free. Multiply later on improved their services tie-ing up with Xend and offering various localized convenient online payment support systems. But the Philippines wasn’t really mature enough to put in money online.

Sales Generated:

2011 :  P10,162,684 (12%) Market Share
2012 : P3,061,711  (.6%) Market Share

Net Income (Loss)  ---- 2011 ---  (P77,358,479)
Net Income (Loss)  ---- 2012 ---  (P36,967,362)

Source:  SEC I-View (Public Document)

As you can see; 2011 was the year Multiply Marketplace Started operating in the Philippines. After expenses – it incurred costs more than what they have earned. The rate to "Cost per earnings" further worsen the next year. The 2012 data showed above only shows the first quarter of 2012 which looks really bad, the cost was already too high but the income was really low. The market share also worsened. Even if you quadruple the market share’s percentage based on my research of (Online Classified Ads Sites in the Philippines) the industry is just really pounding on the company milking money off of its pockets as if a dying entity in the industry.

If you would look at Multiply PH's books submitted as public documents in the SEC, their biggest cash outs in 2011 where to salaries of P35M, Travel Costs P1.5+M, and Selling and Marketing Expenses P26M. The better question to ask their PH top level executives are... like in 2011, where did all these money go to? 35M!? for salaries? really!? and where where all the marketing and advertisements spent on!? they really have to at least answer to a lot of people, maybe even please subject to audit checks. don't just leave us hanging with a "we don't need to explain" attitude as this is really a demoralizing event for the PH's online market.

#2 Questionable Operations

From the beginning Multiply can only be reached thru it’s website, ask anyone of it’s top merchants as to whom among them have already stepped in to Multiply’s Philippine office, you might be shocked to find out how few or zero is the number. Support only comes thru emailing them and calling them would only get you thru a receptionist-like personnel.  

For someone like me who is working for a digital marketing related company, they could have been more accommodating and friendly to us as we could  have made big accounts and poured in hundreds & thousands of money in to their pockets as Multiply is the really preferred site of young professional women for clothes and accessories.

#3 Presence in Advertising – No effort

I understand that Multiply is a very well known brand, but the company was not aggressive enough to generate sales, rather; their position was more of waiting and hoping for advertisers to pour  in money by just being happy with the e-commerce platform. Unlike dealing with – I can set up a meeting with them tomorrow, in their office (so now they built trust), or in our office (now we get that they're serious) but Multiply is just really hoping that we only use their online platform to advertise on their site, a little help and encouragement from their PH staff could had been better than no effort at all.

#4 The Maturity of the People is not there yet

In the Philippines, buying online is still hard. Over the years at least 35%(biggest) of online based purchasing transactions are still done thru meet-ups. Since meet ups as it is are more convenient (technology wise), and secure (product can be tested). I mean you can back out if you meet up and don’t like the seller’s item as it may have defects that you have not anticipated or was not mentioned on the post which is better rather than being sorry or stuck in a return policy limbo.

Payment gateways or payment methods are also expensive for sellers to maintain, and also scary for users to use as they have charges and what so ever mind-set warnings of security issues. Not to mention how sure are you that return policies are 100% honored online by all the online sellers around the world.

Again, this is not the official reasons of Multiply Marketplace. This is just my analysis from years of research and studying the Internet – which gives me a high chance of accuracy as for what are their  actual reasons for Closing down in the Philippines.

Multiply will be offline from May6, and will close its Philippine office by May 30 2013.