Development of the e-commerce market in the Philippines – news from supermarkets

The Philippine e-commerce market continues to grow at a rapid pace and is expected to grow by 19.6% in 2024, driven by consumers’ growing preference for online shopping and strong internet penetration, as discovered by GlobalData, a leading data company and analyses.

GlobalData e-commerce analysis revealed 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 By 2023, the market is expected to reach PHP 1. 3 trillion ($24.1 billion) in 2024.

“The e-commerce market in the Philippines is growing at a rapid pace, supported by a large young population, growing 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,” said Shivani Gupta, senior banking and payments analyst at GlobalData.

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. Under the program, small and medium-sized enterprises are encouraged to set up their businesses on the Internet and sell their products via the SOMAGO platform. This has also helped in enhancing skills and capabilities in online business and has enabled products to be sold both domestically and internationally through this platform.

To tap the growth potential in the e-commerce space, international brands have also ventured 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 has also played a key role as an e-commerce sales platform, with social media companies using their channels to increase customer engagement and sales. With millions of users, the TikTok Store has become a leader in social commerce, allowing you to purchase products directly on the platform.

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 alternatives payment tools among online shoppers, which have gained importance due to their simplicity, speed and convenience.

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

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

“The upward trend in e-commerce sales is likely to continue over the next several years, supported by changing consumer preferences, government initiatives, the growth of social commerce and the entry of new e-commerce companies into the market. 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) in 2028.”

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