The Philippines e-commerce market has continued to grow at a fast pace and is expected to surge by 19.6 percent in 2024, driven by growing consumer preference for online shopping and strong internet penetration, as found by GlobalData, a leading data and analytics company.
GlobalData’s E-Commerce Analytics revealed that the Philippine e-commerce market registered a compound annual growth rate (CAGR) of 28.6 percent between 2019 and 2023 to reach PHP1.1 trillion ($20.1 billion) in 2023. The market is set to reach PHP1.3 trillion ($24.1 billion) in 2024.
“The Philippines’ e-commerce market is growing at fast pace supported by a large young population, increasing confidence in online payments, improving logistics, and the availability of secure alternative payment solutions in the country. Online shopping festivals such as Black Friday, Cyber Monday, and Single’s Day have also contributed to the overall growth,” said Shivani Gupta, Senior Banking and Payments Analyst at GlobalData.
The government is also taking various initiatives to boost e-commerce sales. In June 2023, the Department of Trade and Industry launched the One Town One Product Philippines programme, in partnership with e-commerce and logistics provider SOMAGO. Under the program, SMEs are encouraged to set up their business online and sell their products via the SOMAGO platform. It also helped to upgrade skills and capabilities in online business and provided an opportunity to sell products both domestically and internationally via this platform.
To leverage the growth potential in e-commerce space, international brands have also ventured into this space. For instance, in August 2023, Chinese e-commerce platform Temu launched its operations in the Philippines to compete with companies such as Lazada, and Shopee.
Social media has also played a key role as an e-commerce selling platform, with social media companies using their channels to enhance customer engagement and sales. TikTok shop, with millions of users, has led the way in social commerce by enabling direct product purchases on the platform.
In terms of payment methods, alternative payment solutions lead the e-commerce space with a combined market share of 36.4 percent in 2023, according to GlobalData’s 2023 Financial Services Consumer Survey. Gcash, Maya and PayPal are some of the popular alternative payment tools among online shoppers, which have gained prominence due to their simplicity, speed, and convenience.
“Payment cards are the second most preferred payment method, with debit, credit and charge, and prepaid cards collectively accounting for 28.2 percent share in 2023. This can be attributed to the value-added benefits offered on payment cards, including interest free instalment payments, reward programs, cashback, and discounts,” said Gupta.
Despite the rise in electronic payments, over 23 percent of e-commerce purchases in the Philippines are still made using cash. This highlights the traditional preference for cash among consumers especially among unbanked, rural, and elderly population.
“The uptrend in e-commerce sales is likely to continue over the next few years supported by the evolving consumer preferences, government initiatives, rise in social commerce and the entry of new e-commerce companies. The e-commerce market is anticipated to increase at a CAGR of 13.2 percent between 2024 and 2028 to reach PHP 2.2 trillion (USD 39.5 billion) in 2028.”
To read more news, click here.
