Before the Covid-19 pandemic hit our shores, the Philippines ranked low in e-commerce vis-à-vis other countries in the region like Malaysia or Singapore where a large number of the populace was digitech-savvy.
The pandemic changed all that. When people in Metro Manila and other urban centers around the country found themselves locked down within the confines of their homes, they – including those who previously had absolutely no background, no knowledge, or even interest in digital technology – went online to communicate with the outside world, downloading shopping apps to buy groceries, medicines, and other household necessities.
Analysts say that virtually overnight, the Philippines registered the highest increase among countries in the Southeast Asian region in terms of shopping app use and online spending.
Total number of visits to shopping applications rose to nearly five billion during the close to two-year pandemic lockdown period.
Before long, online shopping platforms Shopee and Lazada became household names among many Filipino shoppers.
By 2021, e-commerce market shares in the Philippines reached $17 billion, largely contributed by some 73 million active online users, according to data from a US government advisory directed mainly at American investors.
“This is estimated to reach $24 billion, with 17 percent growth through 2025. The Covid-19 pandemic increased e-commerce demand, with Filipinos working and studying from home,” said the International Trade Administration, an agency under the US Department of Commerce that promotes US exports of non-agricultural goods and services.
Shopee, Lazada, and Zalora were identified as among the top Philippine e-commerce platforms. “Products from Asia Pacific markets with free trade agreements with the Philippines are sold on these platforms,” said the ITA. “And the top product categories include beauty, electronics, fashion, furniture, health, and household care.”
74% smartphone penetration
The Filipino working population, basically aged between 25 to 44 years old, actively access these platforms from their desktop and mobile phones. In 2021, smartphone household penetration reached 74.1 percent, a two percent increase from 2020.
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COMMUNICATON, social media, electronic trade rolled into one. | PHOTOGRAPH COURTESY OF COMMUNITYPSYCHOLOGY.COM[/caption]
The ITA report described Filipinos as “prolific social media users, actively using these platforms for a whopping 10 hours daily, seven days a week.”
In 2021, among the best platforms to reach Filipino consumers were Facebook (67 million active users), YouTube (58.5 million active users), Instagram (14 million active users), Twitter (9.3 million active users), and Linkedin (9.2 million active users). It is estimated that Filipino social media users will reach nearly 79 million in 2022, the ITA said.
The advisory called the Philippines “the fastest growing app market in Southeast Asia,” with local telecommunication companies “recording 159 million mobile subscribers” so far this year.
It also revealed that in 2020, the year that the Philippines went into lockdown because of the Covid-19 pandemic, the Bangko Sentral ng Pilipinas recorded 20.1 percent digital payments from financial transactions totaling $46.8 billion, a 61 percent increase from the previous year.
In the past, and to some extent even now, Filipinos have been wary about making purchases online because of fear of identity theft, distrust in not seeing the actual product, and lack of payment options, among other reasons.
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FILIPINOS embrace technology shift. | PHOTOGRAPH COURTESY OF UNIONBANK[/caption]
However, restrictions brought about by the pandemic drove many Filipino consumers with little choice but to transact online for essential needs, paving the way for e-commerce growth in full throttle.
With more and more Filipinos cognizant of and getting comfortable with the practical use of online shopping, the growth of e-commerce in the Philippines has turned out nothing short of tremendous.
Currently, research marks the country as second in Southeast Asia with some 76 million internet users spending 9, 10 hours online daily browsing through social media mostly.
As a business, social media is one outlet tapped by Shopee, Lazada and other e-commerce platforms.
Market research point to about 90 percent of consumers using the internet to purchase goods and services, with some 76 percent transactions fulfilled. With growing e-commerce numbers, it is projected that by 2025 around $12 billion will come from online sales.
Since the pandemic accelerated e-commerce growth in the Philippines, the question at present is how will the situation be beyond the pandemic?
Research analysts are convinced that online shopping will continue to grow post-pandemic, with at least 48 percent of Filipinos still shopping online – because of ease of convenience, basically – even when things fully get back to normal.
Filipinos have already realized the convenience of shopping online for a wide range of products compared to brick-and-mortar stores.
With more enhancements being developed by e-commerce platforms, it is comfortable to expect that market penetration for online shopping will grow more, and remain high in the years to come.
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