GlobalData reveals that e-commerce payments in the Philippines will grow by almost 20% in 2024.

The Philippine e-commerce market is growing at a rapid pace and is expected to grow by 19.6% in 2024, driven by rising consumer preferences for online shopping and strong internet penetration, says GlobalData, EPI’s publisher.

GlobalData E-commerce analytics

GlobalData e-commerce analysis shows that the Philippine e-commerce market recorded a compound annual growth rate (CAGR) of 28.6% from 2019 to 2023 to reach PHP 1.1 trillion ($20.1 billion) in 2023. The market is expected to reach PHP 1.3 trillion ($24.1 billion) in 2024

Shivani Gupta, senior banking and payments analyst at GlobalData, said: “The Philippine e-commerce market is growing at a rapid pace, supported by its 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 Singles’ Day also contributed to the overall growth.”

Philippines One Town One Product Program

The government is also undertaking various initiatives to increase e-commerce sales. In June 2023, the Department of Trade and Industry launched the One Town One Product Philippines program in partnership with e-commerce and logistics provider SOMAGO. The program encourages SMEs to set up their businesses online and sell their products via the SOMAGO platform. It also helps them improve their skills and capabilities in online business and provides them with opportunities to sell their products both domestically and abroad through this platform.

To tap the growth potential in the e-commerce space, international brands are also venturing into this space. For example, in August 2023, Chinese e-commerce platform Temu launched operations in the Philippines to compete with the likes of Lazada and Shopee.

Social media also plays a key role as an e-commerce sales platform, with social media companies using their channels to increase customer engagement and sales. TikTok Store, with millions of users, is at the forefront of social commerce, allowing you to purchase products directly on the platform.

GlobalData 2023 Financial Services Consumer Survey

When it comes to payment methods, alternative payment solutions are leading the e-commerce space with a combined market share of 36.4% in 2023, according to the GlobalData 2023 Financial Services Consumer Survey. Gcash, Maya, and PayPal are some of the popular alternative payment tools among online shoppers, which have gained importance due to their simplicity, speed and convenience.

Gupta added: “Payment cards are the second most preferred payment method, with debit, credit and charge cards and prepaid cards expected to have a combined 28.2% share in 2023. This can be attributed to the additional benefits offered on payment cards, including free interest rates installment payments, rewards programs, cashback and rebates.”

The story continues

Despite the increase in electronic payments, over 23% of e-commerce purchases in the Philippines are still made using cash. This highlights consumers’ traditional preferences for cash, especially among the unbanked, rural and elderly population.

Gupta concluded: “The upward trend in e-commerce sales is likely to continue over the next several years, supported by changing consumer preferences, government initiatives, the rise of social commerce and the entry of new e-commerce companies. The e-commerce market is expected to grow at a CAGR of 13.2% from 2024 to 2028 to reach PHP 2.2 trillion ($39.5 billion) by 2028.

“E-commerce payments in the Philippines will grow by almost 20% in 2024, says GlobalData” was originally created and published by Electronic Payments International, a brand of GlobalData.

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