Technology management framework for online shopping as a disruptive innovation in the Philippines/ Arlene O. Trillanes

Dissertation

College of Industrial Education Doctor of Philosophy in Technology Management Technological University of the Philippines 2023

Clayton Christensen made the seminal work on disruptive innovation in 1997, The theory proposes that established and successful businesses focus on product improvements for their most demanding customers at the expense of their low-end and mainstream customers. New entrants with new or innovative technologies focus on improving product offerings for these low-end customers. They move steadily upmarket until it delivers the same performance that the mainstream customers of the established businesses expect. Disruption happens when these customers take up the new entrant's products or services. The Philippines is not a stranger to the market influences and opportunities afforded by disrupted technologies. Disruptions had occurred in various industries as early as 1910 with the first automatic telephone system, in the 1990s with the cellular phone and the Internet, in the 2000s with Internet banking, and the 2010s onwards with eCommerce platforms and the Internet population boom. Online shopping has gained traction in the Philippines with the entry of Lazada and Shopee, two of the most popular platforms operating in the country. These platforms have been described as among the disruptive eCommerce startups for their technological innovation and mass scale. Local businesses have also taken steps to capitalize on the eCommerce growth, but they have yet to match the market reach that both Shopee and Lazada hold. This study proposes a framework that will catapult online shopping through locally owned platforms as a disruptive innovation. In developing the framework, the study investigated the disruptive technologies that are important for online shopping to be disruptive, the disruptive technology-driven features of online shopping platforms that could contribute to disruption, and the barriers or challenges that may inhibit disruption. The study also looked into comparing the foreign-owned platforms with the locally-owned platforms to determine if there is a difference in the customer experience of shoppers using these platforms. A mixed methods approach was taken to investigate where qualitative and quantitative data gathered from expert and literature searches were used to identify and assess the constructs to be measured to account for the disruptive potential of online shopping. Results show that big data and analytics, Artificial Intelligence (AI) and the Internet of Things (IoT) are the top three important technologies for online shopping innovations in the areas of marketing strategies, customer experience and governance. To optimize the impact of these technologies, key enablers have been identified, namely digital infrastructure, digital finance, government and people and organization. Nonetheless, the country's political and legal, economic, social and technological landscapes will continue to influence the growth and transformation of online shopping in the Philippines. With the framework as a reference, the study also proposes a roadmap for locally-owned online shopping platforms to gain headway in the online retail industry and disrupt the current foreign-based players, Shopee and La7ada, and even retail in general-Authro's Abstract.