Shopping in Digital Pushcarts | E-Commerce in the Philippines

The pandemic, without a doubt, has transformed the way we shop. Gone are the days when fitting clothes in the dressing room before making any purchase was the norm. Or the time when we all enjoyed comparing fabrics and going through racks to check out the best deals. In this day and age, all you need is your smartphone and an internet connection to get your regular dose of retail therapy. Even paying bills is no longer a hassle; almost everything is just a click away.

While online shopping has been around since the last decade, it has become more rampant now than ever due to the closure of physical establishments.

Add to cart, pay, then just wait

If doing your shopping and groceries online or paying a little extra means avoiding traffic, long lines, and saving a lot of time, why not, right? With today’s current situation, it’s the most efficient thing to do, which is why it’s no longer surprising to learn about the soaring user base of local and international electronic commerce platforms. Online shopping offers convenience, great deals, and a wider array of options (the closure of brick-and-mortar stores left consumers with limited choices).

Flourishing in the Philippines

It's no secret that the Philippines is the social media capital of the world. The average Filipino spends at least 4 hours on social media. It also remains to be one of the countries with the highest number of internet users in the world (81.9% penetration), accompanied by having a high device ownership rate. As per Hootsuite and Global Web Index, 98.5% of Filipino internet users own a smartphone, while 77.3% own a desktop computer (85.7% of these aged 16-64 use shopping applications).

With the country’s growing middle-class population and the accelerated digital transformation brought about by the pandemic, there’s no doubt e-commerce is helping drive economic growth.

As per the Department of Trade and Industry (DTI), the e-commerce industry accounted for 3.4% of the Philippines' Gross Domestic Product (GDP) in 2020; that’s USD 12 billion or PhP 599 billion. Nielsen IQ has also reported a 325% increase in online shopping among Filipino households this year. On top of that, it was recently reported that the Philippines, along with Vietnam, are now the fastest-growing internet economies in Southeast Asia, with gross merchandise value forecasts of $40 billion and $57 billion, respectively.

What are Filipino shoppers buying online?

According to Data Reportal, the following categories have the highest number of total sales in the Philippines:

• Electronics/Physical Media; $955.4 million

• Furniture/Appliance; $845 million

• Fashion/Beauty; $652.7 million
  

Where do Filipinos shop online?

As of September 2021, insights from iPrice reveal that the top five digital merchants in the country are the following: Shopee, Lazada, Zalora, EBay, and Beauty MNL. The next five on the list are Galleon, Ubuy, Flowerstore, Sephora, and Kimstore.

Challenges to Philippines E-Commerce

The e-commerce landscape in the Philippines is promising, but there are still a few challenges that are yet to be addressed, like the need for higher bandwidth to accommodate the growing online retail market, consumer rights issues, and the dominance of cash-based payments, among others.

Fortunately, the Department of Trade and Industry (DTI) has come up with an updated e-commerce roadmap designed to help the nation become one of Southeast Asia's technological leaders. It will be focusing on three important pillars: speed, security, and safety.

When was the last time you went shopping online? Do you like it more than traditional shopping now?

➡️ READ RELATED: Online Shopping in the Philippines | 2018 ⬅️