Market Trends of Philippines E-commerce Industry
Fashion Industry to Dominate the Market Significantly
- Before the COVID-19 outbreak, Filipinos hesitated to make financial commitments online. Due to the obstruction, Filipinos were obliged to purchase food and other needs online, this skyrocketed the number of e-commerce transactions. Thousands of Filipino business owners rapidly caught up, opening online stores offering everything from face masks to electronic consumer items. In the fashion and cosmetics sectors, prominent corporations also increased their E-commerce activities.
- With its Southeast Asian neighbors, the Philippines' e-commerce environment is continually expanding and changing. Physical storefronts at malls have always been a significant economic paradigm in the fashion retail industry, but pandemics have completely altered this.
- The Philippines has encouraged new fashion-related businesses to establish operations there for the past few years. Because of this, the market has continued to grow, in the wholesale and retail industries, utilizing the e-commerce market with new brands domestically.
- The e-commerce landscape in the Philippines is witnessing a surge in popularity among online consumers. These platforms not only offer a wider array of products but also boast competitive pricing. Consequently, the e-commerce market is on a trajectory of significant growth, with projections extending to 2030. Notably, Shopee leads the pack, drawing in over 70 million monthly web visitors, closely followed by Lazada, which sees around 37 million visitors each month. Insights from Meltwater reveal that, during the third quarter of 2023, a substantial 57% of Filipino respondents reported making weekly online purchases, with a notable portion opting for online grocery shopping.
- Moreover, due to rising disposable incomes and lavish spending, consumer demands in the fashion industry are becoming more complex and diverse. Other elements include the rise of life-enriching consumption, such as leisure and cultural activities, an increase in internet sales, an aging population, and a shift in the core demographic of consumers.
Understand The Key Trends Shaping This Market
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Increased Internet Use, Online Payments, and Mobile Phones to Drive the Market
- The Philippines' e-commerce market has a lot of room to expand and advance. Filipino consumers' adoption of a digital lifestyle is the key force behind this. According to the World Bank, the Philippines has one of the most dynamic economies in the East Asia Pacific area. In 2023, The Philippines emerged as Southeast Asia's fastest-growing economy, boasting a 5.6% growth rate, slightly below the government's ambitious target of 6.0-7.0%. This data is sourced from the IMF's Economic Forecast for 2024.
- The country is witnessing rapid development in 5G and internet services. In 2023, Globe Telecom significantly bolstered its 5G infrastructure, introducing 894 new sites. This expansion led to an outstanding outdoor coverage of 97.90% in the National Capital Region and 92.36% in major cities spanning the Visayas and Mindanao.
- The Philippines leads in digital payments, boasting a range of platforms like GCash, Maya, and PayMongo. In April 2024, the nation furthered its digital payment landscape with the launch of Higala, an Inclusive Instant Payment System (IIPS). This move aims to reduce real-time payment costs for the financially underserved in the country.
- According to a survey conducted by Telenor ASA, a Norwegian majority state-owned multinational telecommunications company, in August 2023, 38% of respondents in the Philippines reported predominantly using a 5G connection on their mobile devices. In contrast, 10% of respondents did not utilize a 5G network.
- Additionally, the majority of local online merchants have mobile-friendly websites and apps, which hastens the growth of mobile-based e-commerce purchases. Consequently, having a mobile-friendly application or website is widely regarded as being essential for success in the e-commerce sector.
