In the pandemic’s initial throes, the Philippines witnessed a staggering surge in online shopping, reshaping consumer habits. This boom became a catalyst, propelling established enterprises and aspiring entrepreneurs alike into the digital marketplace.
However, the pivotal question lingers: has this unprecedented growth sustained its momentum? Is the online shopping frenzy still at its peak, or has it begun to slow down in its trajectory?
This article showcases the current state of this digital wave. If you’re an entrepreneur looking for the optimal move, who believes understanding the present pulse of eCommerce is crucial, read on!
The State of eCommerce in the Philippines: 5 Statistics
Here’s how the Philippine eCommerce industry is doing according to the numbers:
1. The PH eCommerce market will soar from 758 billion PHP in 2023 to nearly 1.5 trillion PHP in 2028.
The analysts attribute the near doubling of the industry in a mere five years to increased internet penetration and continued support by government programs. They predict a compound annual growth rate (CAGR) of 13.78% for the period (2023-2028).
2. 57% of Filipino consumers shopped from eCommerce marketplaces every week during the third quarter of 2023.
A significant number (57%) of Filipino buyers actively engage in online shopping. The number indicates the pervasive adoption and reliance on digital marketplaces for people’s shopping needs.
Filipino internet users, predominantly consisting of Gen Zs and Millennials, are increasingly utilizing e-commerce platforms for their retail needs. These platforms not only offer a diverse range of shopping options but also present competitive pricing, making them a preferred choice among online consumers in the Philippines.
3. Phishing attacks comprise most digital fraud schemes experienced in Q4 2023.
The growth in eCommerce has also drawn the attention of many malicious actors looking to take advantage. Social engineering scams like phishing and smishing (text message phishing) are the most prevalent types at 50% and 42%, respectively.
In eCommerce, where financial transactions and personal information exchange are integral, the prevalence of digital fraud poses a significant risk. For online businesses, the consequences of falling victim to such schemes can include financial losses, compromised customer data, and reputational damage.
It becomes imperative for businesses to invest in cybersecurity measures, including employee education on recognizing and mitigating phishing threats, implementing advanced email and text message filtering systems, and staying abreast of emerging phishing techniques. Moreover, fostering a cybersecurity-aware culture among both businesses and consumers is essential.
4. The lack of product quality guarantees is the most pressing issue of online shopping in the Philippines, according to most respondents (54.45%).
Another pressing issue hindering eCommerce's growth is the need for guaranteed product quality. Reproductions and off-brand goods litter nearly all online marketplaces, which most survey respondents (54.45%) point to as the leading challenge to online shopping as of January 2023.
Online marketplaces are inundated with products of varying quality, and the lack of stringent quality assurances raises apprehensions among consumers. The absence of clear guarantees on the authenticity and durability of products contributes to a sense of uncertainty, deterring potential buyers from making confident purchasing decisions.
As the eCommerce landscape evolves, businesses must prioritize and assure product quality. Implementing robust quality control measures and fostering transparent product descriptions can contribute to building a more reliable and trustworthy online shopping environment.
5. The pandemic’s economic impact (40%) and reduced restrictions (35%) are the top two reasons respondents shop less online.
According to survey respondents, eCommerce's slowed growth experienced in 2022 and onwards is due to two significant reasons. The first is that the pandemic has lowered many people’s spending power. Paired with returned access to physical stores, it has slowed the industry’s growth.
In the post-pandemic landscape, eCommerce platforms may need to adapt to cater to budget-conscious consumers. Offering value-driven promotions, competitive pricing, and flexible payment options could become crucial strategies to address the economic constraints faced by potential online shoppers.
eCommerce platforms will also need to differentiate themselves by emphasizing the unique advantages they offer, such as convenience, personalized experiences, and an extensive product range. Moreover, fostering seamless integration between online and offline channels, like omnichannel strategies, can enhance the overall shopping experience and cater to the evolving preferences of consumers who may engage in both digital and physical retail.
Consumer Behavior in the Philippines: 6 Online Shopping Trends
Understanding eCommerce trends and Filipino consumer behavior is paramount for successful selling strategies. These trends can help shape your playbook for the shifting digital markets.
1. Adoption of omnichannel strategies
Businesses recognize the importance of offering a unified shopping experience, blending the physical and digital, or equipping communication touchpoints with selling capabilities. In-store pick-up options for online purchases cater to diverse consumer behavior trends and preferences. Moreover, leveraging social media channels as sales platforms has become instrumental in engaging with customers on their terms.
For example, fast food chain Jollibee recently began allowing in-store pick-up of mobile and online orders to make their service more seamless.
2. Challenges in local logistics infrastructure
Logistics remains a significant barrier due to high operational costs and an inconsistent infrastructure network. Investments from the private and public sectors are slowly but surely improving this issue. However, there is still a need for better fulfillment centers, cross-border logistics networks, and last-mile delivery solutions to truly penetrate regional markets.
For instance, local F&B businesses face logistical challenges in reaching customers efficiently. Despite ongoing efforts by both private and public sectors to enhance the infrastructure, the need for more robust fulfillment centers, streamlined cross-border logistics networks, and effective last-mile delivery solutions persists.
Food delivery services, such as Grab Philippines, are actively addressing these challenges by expanding their reach beyond urban areas and navigating logistical hurdles to ensure timely and reliable deliveries for customers across different regions.
3. Delivery and customer experience
Efficient delivery services coupled with exceptional customer experiences are becoming game changers due to the mentioned logistics challenges. Online businesses can distinguish themselves by providing prompt delivery times and flexible options tailored to their preferences. Positive delivery experiences significantly influence repeat purchases and customer retention.
4. Popular product categories
Online shopping behavior in the Philippines dictates the most sought-after product categories in online marketplaces. Typical categories include electronics, fashion, beauty and personal care, and household essentials. Factors influencing these choices revolve around competitive pricing, product quality, convenience, and brand reputation.
In the realm of Filipino online shopping, the trends in popular categories also extend to F&B marketplaces. The preferences for local and international culinary delights, snacks, and beverages are heavily influenced by factors such as unique flavors, artisanal qualities, and the reputation of the brands offering them.
Source: GCash
Notably, as consumer tastes and market dynamics evolve, so do the trends in F&B categories, reflecting the changing preferences and adventurous spirit of Filipino online shoppers. Exploring F&B sections on platforms like GLife will provide a variety of options such as bakeries, desserts, fast food, groceries, and more to cater to online consumers’ evolving tastes.
5. Mobile shopping and app usage
Mobile eCommerce dominates the Philippine market, with 40 million more active phone subscriptions than people. The convenience of mobile apps for eCommerce platforms is pivotal in reaching more of the market. User-friendly interfaces, personalized experiences, and efficient transactions significantly increase sales and heighten customer engagement.
Apps tailored for F&B experiences contribute to the mobile revolution, allowing consumers to explore culinary delights at their fingertips. With user-friendly interfaces and hassle-free transactions, these apps enhance the overall dining and gastronomic experience for users.
Today, popular food brands have dedicated apps that bring the convenience of mobile technology to their customers. For example, Shakey’s Super App allows users to have a more seamless experience when ordering their pizzas and other menu items. The app features an order tracker, exclusive promos, and the ability to link loyalty cards digitally.
6. Payment methods in online shopping
While cash on delivery is still the most preferred payment option as of 2022, you can expect an increased presence from alternatives like digital wallets, credit cards, and other options. However, concerns persist regarding the security of online transactions, emphasizing the need for secure payment gateways to foster customer trust.
Prospects of the Evolving Consumer Landscape
While eCommerce’s undeniable growth signifies vast opportunities, a cautious approach ensures businesses can capitalize on this expansive market effectively. Crafting meticulous strategies allows for maximizing benefits while avoiding potential pitfalls.
Enter RUSH’s all-in-one eCommerce platform. We offer solutions tailored for seamless online experiences, such as eStore, which simplifies the process of scaling your business. From the discovery stage to the final shipment, it’s designed to provide you support throughout the whole customer journey. Meanwhile, our Loyalty solutions allow you to customize to fit your business goals and turn customers into brand advocates.
RUSH also supports dine-in experiences with its eStore programs, Scan to Order and Scan to Pay. These programs enable customers to serve themselves in a restaurant by viewing the menu, placing orders, and settling their payments - all with a quick QR code scan. This comprehensive approach ensures businesses can keep pace with evolving consumer behaviors while expanding their brand presence in the thriving local market.
Ready to bring convenience and delight to the table? Book a Demo with RUSH today and witness firsthand how our eCommerce solutions can amplify your brand’s success.
