Here's the thing. I came online and my friend Lynne had put up a note linking to this online article from the Manila Bulletin Publishing Company. So I made a note with the link too but when people went there they got "The requested page could not be found." I was hoha but then I realised I still had my original tab open with the article still there. So I have copied and pasted. Up you, Jack.
http://www.mb.com.ph/articles/345335/jack-madrid (original link to article)
Jack Madrid
Country Manager, Multiply Philippines
By REGINA ABUYUAN
December 19, 2011, 4:16am
MANILA, Philippines — If you look at my job history, you’ll see I don’t like easy jobs,” says Jack Madrid, country manager of Multiply Philippines.
Energetic and articulate, adept in people management and with vast business experience in diverse fields, Madrid was a shoo-in to establish Multiply’s first headquarters in the Philippines. “There are lots of challenges, lots everyday,” he says of Multiply’s shift from a social networking site to a fully functioning e-commerce platform, “but that’s what keeps me going.”
A graduate of the University of Pennsylvania, Madrid has been involved in banking (Citibank N.A., Vice President for the World Communication Group based in Hongkong), conglomerate work (strategic planning and business development for Ayala Corporation, for which he also helped acquire Maynilad and start its dotcoms), media and entertainment (Managing Director for MTV Philippines), BPO (Dell), and country manager for Yahoo! Philippines, where he established local operations and spearheaded its growth as the country’s leading digital news and content provider.
Here, he talks about the power of the Pinoy in transforming the digital and e-commerce landscape, and why Multiply—though started in the United States and now owned by a South African company—can be considered as truly Filipino.
Business Agenda: Just how big is the Multiply community?
Jack Madrid: We’re growing daily, weekly, monthly. Our latest count is now 95,000 Multiply sites with over a million products for sale. These are the users that are registered as merchants, with over 2,000 new merchants coming online each month. We have almost five million unique users every month.
Obviously more stores are more active than others, but we have the biggest storefronts in all of Asia.
BA: How did it grow this big?
JM: Multiply has been around since 1994; we estimate the first Filipino store started in 2006. That was when Pinoys started using Multiply as an advertising platform for goods for sale. In the beginning it’s funny—we were telling them to stop; it’s against the terms of service and so on. That went on for a couple of years. Even the founders thought it was some sort Pinoy aberration.
But sometime in 2008, the overall traffic of Multiply went down. And they realized it was Holy Week in the Philippines, and they said this is serious. It’s time to take a look at this. They took the Philippines a little bit more seriously. They said, “If they want to sell goods online, we can’t stop them.”
Then, in 2010, when Facebook took over the Internet, they really had to figure out what’s next. So we got on the radar of a company called Naspers. It’s a South African company that became big through traditional media—TV, cable, print. But some years back, they decided to invest seriously in the Internet. So they put up another company, a wholly-owned one called MIH, which invests and operates Internet companies in emerging markets around the world. For example, they bought a company in Poland called Allegro. It’s the biggest e-commerce company in Eastern Europe, a billion-plus dollar company, and because of Allegro, eBay had to leave eastern Europe. We’re trying to replicate that success in emerging markets like Africa and Latin America.
So Multiply is a U.S. company, technically, but its biggest community is in the Philippines. Without the Philippines, we wouldn’t have moved to become an e-commerce company. The only other Multiply office outside the U.S. is in Jakarta, which has the second biggest community.
(Two years ago, Naspers bought another Filipino company, Sulit.com.ph. A few years ago, it announced its purchase of Level Up, another company born in the Philippines that became big in Brazil.)
The business model for Multiply was to transform the company into e-commerce, build an office, hire a country manager, and let him hire a team. So my Jakarta counterpart and I joined the same day, on February 7, 2011. In the Philippines, I’m employee no. 5. Today, we’re 41. It’s very exciting.
So what we’ve been trying to do since then was to migrate the existing stores of Multiply to the new platform, which is called Multiply Commerce. Since May, we’ve been migrating them from photo album (format) to product listing, with additional functionalities to include product information–color, size, how many are available, price.
BA: Why should your vendors want to migrate from the old Multiply to Multiply Commerce?
JM: It gives a better shopping experience for the buyer, and it’s more efficient for the merchant to use Multiply Commerce. Once you’re a product listing, your goods as a merchant can be bought through Multiply. Currently, it’s through a meet up, or (through means where the) buyer takes a risk.
Now you can make use of the payment gateway of Multiply; you have the confidence of paying through Multiply.
The second thing is that we have a shopping cart. The buyer can buy several goods from one store, or one product each from different stores. Then you can check out, with all delivery charges there, and fill out your payment details. Then you’re given a transaction reference number, which you need to know when you’re paying at the bank. And you’re done. Seller gets paid 24 hours later, and you get your product.
BA: What are the current payment options?
JM: You can pay through BDO, BPI, GCash, Paypal, Visa, MasterCard, AMEX and JCB. Soon, you’ll be able to pay through Smart Money, Bancnet, Citi Mobile and Cebuana Lhuillier.
BA: How many are on Multiply Commerce now?
JM: Five thousand merchants have already migrated to the new system, with over 92,000 product listings combined.
BA: What made you want to take on this post?
JM: E-commerce is still in a very nascent stage, and I believe in coming in early. It’s also a unique opportunity for me, because I came from Yahoo!, and I had a little experience in my Ayala days with dotcom start-ups.
This was an unusual start-up situation. No. 1, it was really a start-up, the office was empty, but Multiply is a brand that needed no introduction. Everyone knew about Multiply. They even knew it was about shopping, not about social networking. No. 2, our community in the Philippines already decided what they wanted us to be. Normally you have to explain what you’re doing. In this case, it was the opposite—they told us. So that’s a very unique thing. No. 3, unlike other start-ups, we were funded. Naspers gave us money to put up a decent office and hire people…I’ve been in start-ups before when we were always raising money. Half of the time you’re raising money. And no. 4—which convinced me to join—where can you find an Internet company where the biggest market is the Philippines? Now Yahoo! is very big, much bigger than Multiply. But even if I increased Yahoo’s business 20 times, it will still not be the biggest. (Then-Yahoo President and CEO) Carol Bartz would have still not have known me. And that’s why I joined.
BA: You named those four reasons for joining Multiply, and you make it sound too good to be true…
JM: I’m good at that (laughs).
BA: …so what challenges do you have, if any?
JM: E-commerce is the most complicated (business). Anything can go wrong, anytime. We’re not in control of the payments, delivery, logistics—they’re all external. I don’t even know what happens after between buyer and seller…there are some sellers who can do funny things. So that’s one operational challenge.
Internally, managing a company of 40 people is not easy either. Especially when you have to hire them in three months. People management is an art and a science and there’s no formula, but there’s a way to do it. If you do it too fast, you can suffer from people indigestion.
BA: What do you uniquely bring to Multiply?
JM: People management, I would say. My business experience. My knowledge of start-ups. And I think building the right team. Because at the end of the day, regardless of the business, what matters is hiring the right people. And that’s not enough. You’ve got to get them to do what needs to be done in an aligned fashion, and to make this fun and fulfilling as possible. To me all work is the same if you follow those principles.
One of the things I do for Multiply, and I can say this about digital as a whole, is evangelizing and educating what digital is. This is one thing I learned in Yahoo—even agencies—they think of digital as a separate piece of marketing. When you talk to someone in the agency, they’ll say they’ll need a “digital person.” “Look for someone for me who’s good in tech.” No, it’s not tech at all. I’m not a techie, believe me. It’s really about—to me—how to reach younger people. That’s all digital marketing is. It’s no different from traditional marketing. Don’t think of digital as separate. Think of it as part, an integral part of your overall marketing campaign.
In my presentations, I show a scene. A typical scene today—a guy watching TV, with a cellphone in his hand, and his computer on. This happens in every room. You’ve got three screens in one room. Twenty years ago, everyone would be glued to just one screen in one room.
If you’re a brand, your marketing strategy has to change, right? you can’t throw 95 percent of your budget to TV and 5 percent to digital. Digital has to be part of your overall campaign. Which is why I’m excited about e-commerce, because more and more of our lives are spent online. And shopping is going to come next. It has to, especially when we fix the payment system, when more Pinoys have credit cards, when our delivery systems is in place, when there are more e-commerce sites, it will all come together.
BA: So why don’t people just go to Facebook or Sulit.com?
JM: To me it’s all one big ecosystem. A lot of our merchants use Facebook to drive clients to their site. We spend money on Facebook, just to draw awareness. Everyone’s there so you can’t not be there, but just because you have a page or many fans doesn’t mean you’re going to sell.
Let me explain why Sulit is different from Multiply. Sulit is like classifieds. If you were selling a watch or a car, or two phones, you would list it on Sulit. But if you want to go into a business, like if you had a collection of cars or watches, then you go to Multiply.
BA: Anything goes with your merchants, correct?
JM: Yes. Half of our goods are probably apparel. Tech gadgets, cameras, cellphones, accessories are the second biggest. Next would be baby-related items.
BA: Aside from the shopping cart and payment systems, what sort of protection do you give merchants?
JM: We have a product called Trusted Merchant. It’s a work in progress, but it exists. We verify the accuracy of a seller’s information. We want to know who he or she is, where they live, what their phone number is, we get copies of their business registration—it’s our way of telling the shoppers we know this merchant. If it’s a trusted merchant, we allow them to put a “trusted badge” on their site. There are a couple of hundred of them now; there’s a cost to the processing, but these are the merchants we can say we know.
BA: Can you give us a profile of your usual merchant?
JM: There’s no one profile. The majority are women. Maybe 25 years and up. We invited 50 or 60 merchants one day, I don’t know if that was representative but 80 percent were women. But almost all are working, and this is an important part, but not their only source, of their income.
BA: Do you have any anecdotes or success stories about your merchants?
JM: We’ve a few merchants who have become very big. In the category of gadgets, there’s Kimstore and her competitor called Bbgadgets. There is no cheaper place to buy a camera or cellphone than Kimstore. She’s a Go Negosyo awardee and is only 22 years old.
We also have this group called Multiply Millionaires. We talk to them. They say their dream is to have a real store. It’s funny. If you’re online, size does not matter, you can talk to anyone. Then we also talk to the big brands. So these brands tell us: their dream is to have an online store. So I think we’re coming in this (industry) at a right time.
But we have a long way to go. Every week we’re experimenting and adding new things. But what I like about our owners is that we’re not going to take any shortcuts for success. We’re here for the long term. And to show you how committed we are, we’ve decided to waive our transaction fee until early next year. We have a transaction fee of 3.9 percent; we net out the proceeds from the buyers, but because we really want Multiply to be the marketplace of choice online, we decided to waive that till next year.
BA: Do you have other revenue streams?
JM: We have an advertising sales team and I think the advertising solutions we bring are quite unique. I think what makes e-commerce interesting is that the people who go to Multiply have a different mindset. If you go to for example, Yahoo!, you’re there to check your mail, and maybe you’ll read one or two headlines before you check your mail. But if you’re going to Multiply, you’re there to windowshop or you’re curious about something. So we think that is more interesting to some brands for advertising because there is already an intent to buy.
BA: So with you setting up Multiply here in the Philippines, staffing it with Filipnos, can you say this business model is uniquely Filipino?
JM: I would argue that Multiply is a Philippine company. Because we wouldn’t have changed to e-commerce if not for the Philippines. And I’m proud of that, whenever I give a talk, I tell them that story—traffic went down, it was Holy Week in the Philippines…people love that stuff.
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