The Philippines is a growing market for social networking sites. With international social networking sites such as Friendster, Multiply, Facebook, Twitter and several local sites, Budflick, Hikot, PinoyKubo, Tayotayolang, iCubee and Pysoldev in use, the country has been tagged as “The Social Networking Capital of the World” in a study released by Universal McCann. Social network site has also been also for election campaigns as well as tools to aid criminal investigations.

Some other examples of the use of social networks are the promotion television programs like Pinoy Big Brother: Teen Edition Plus with its two profiles on Multiply few years back. ABS-CBN tied up in with local television networks which to do the promotion. A call center company posted job openings on its Multiply community site and was able to attract recruits. One of the senatorial candidates, Francis Escudero, created his own Friendster profile in 2007 to bolster support from Filipino users and won a seat in the Senate. Since then, local celebrities and politicians created their own Friendster profiles to communicate with the public.

With 83 percent of Filipinos surveyed using social network, they are also ranked as top photo uploaders and web video viewers and second as blog readers and video uploaders. Over 7.9 million Filipinos are internet users with the intensity of 6.9 million users visiting a social networking site at least once a month.

It began with Friendster. In 2008, the biggest percentage of users, 39 percent, was from the Philippines with 13.2 million out of the 39 million unique visitors they had. In addition to that, Multiply president and founder Peter Pezaris said that the Filipino users of their site comprised the largest and most active group in terms of number of subscribers and photographs being uploaded daily. About 2.2 million out of more than 9 million Multiply registered users are Filipinos, outnumbering nationalities with a bigger population like the United States, Indonesia, and Brazil. Also, one million photographs were uploaded by Filipinos to Multiply every day, which was half of their total worldwide uploads.

As one of the most popular social networks in the Philippines, sixty percent of Filipino Multipliers are female, while seventy percent are under the age of 25. Just like its counterpart, Friendster, which has repositioned itself into a social gaming hub early this year, Multiply has decided to pivot as well. The shift in strategy, from a social network to a social shopping site, was market-driven. Filipinos who have been on Multiply since 2004 have been using it as an online repository of photos to showcase their respective products. Two years later, more Filipinos started using it to sell their wares and transact online despite the lack of its e-commerce features. “There are now close to 65,000 sellers on Multiply in the Philippines. At least half of the traffic on Multiply in the Philippines is sales-related,” says David Hersh, Multiply Chief Product Officer and Co-Founder to ABS-CBN, at the end of last year.

Jack Madrid, Multiply Philippines Country Manager (photo) stated that their high growth in the country led to the company’s first Philippines office in Ortigas, Mandaluyong City. It’s their fourth office in the world after the headquarters in Florida, their New York’s office and second in Asia after their Jakarta’s office. With 40 employees, their focus will be on delivering education and training to young online entrepreneurs. Entrepreneurial organization and community, goNegosyo, is their first partner in this program.

“I am proud to say that the Philippines is the largest, and fastest growing market for Multiply, with over 2,000 new merchants coming online each month,” Pezaris said. The Philippines reportedly has over 95,000 sellers with over a million products for sale. “Apparel, fashion, cosmetics and electronic gadgets such as cameras, cell phones are top two most selling product categories in Philippines,” Jack states firmly.

“The center of the business will be in Manila. There will be a local sales and marketing group in the local office and we will be hiring sales representatives that will combine both traditional and social media marketing,” he says. Most of the promotional and marketing activities are done with online search, campaigns and events. They will host their own and also partnership events three to four times annually. Bazaars are the most frequent types of event that they have scheduled for. A formal launch party, which involves inviting merchants, advertisers, press and buyers, is the nearest event planned that will take place this coming October. Aside from that, there is a plan to host a fashion-related event involving selected merchants. “To encourage and educate (online) entrepreneurship in academic institutions, we do regular university visits or tours. Usually I will be accompanied by our business development manager to do it,” Jack explains.

While the software development side of the business will remain in the US, Hersh says he expects some of the work to be outsourced to the Philippines in the second half of 2012.

The new marketplace also provides several payment options for buyers including transaction via 2 local banks, Paypal and G-Cash. Banco De Oro (BDO) and Bank of the Philippine Islands (BPI) are two banks they have partnered with. G-Cash itself is a service offered by local telecommunications operator, Globe Telecom, 6 years ago to subscribers which allows them to buy products using their prepaid credits. Meanwhile, Multiply’s credit card service will be up on October this year.

Under Multiply’s payment options, online buyers will deposit their payment to a local bank, G-Cash or PayPal account, which will then be deposited to the bank account of the seller minus a small fee. The product will then be shipped to the awaiting buyer. To date, about 30 percent of the sales are paid through bank deposits, 30 percent with G-Cash and 40 percent via PayPal.

Hersh says one benefit of the Naspers acquisition is that it has formalized a partnership between Multiply and Sulit.com.ph, which is considered the leading online classified ads and buy-and-sell website in the Philippines. Multiply and Sulit are now sister companies after Naspers also bought into the local e-commerce site. Hersh says the business models of both Multiply and Sulit actually overlap since both are involved in e-commerce. Some Multiply sellers promote their products and stores on Sulit, he explains. “We expect to leverage each other’s knowledge since we seem to be reaching out to different markets,” he says.

Starting 26th August, similar to what Multiply Indonesia applies, merchants are waived the  3.9 percent transaction fee until 31 January 2012 to encourage faster adoption by buyers and merchants.

As Jack wraps up, in the long run, “We aim to be the dominant e-commerce and online shopping destination in Philippines offering the best shopping experience in the next two or three years.”

The Multiply Philippines team.