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Philippines E-Commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

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  • 101 Pages
  • August 2022
  • Region: Philippines
  • Mordor Intelligence
  • ID: 5601222
UP TO OFF until Jun 30th 2023
The Philippines' e-commerce market has grown in recent years, boosted by growing consumer preferences for online shopping and increasing penetration of the Internet. The COVID-19 pandemic further accelerated this trend. The market is expected to grow at a CAGR of 11.4% during the forecast period (2022 - 2027).

Key Highlights

  • With a vibrant economy and a large population savvy in digital technology, the Philippines is a fast-growing e-commerce market in Southeast Asia. Some websites and digital applications are already competing for market share with global, regional, and domestic players. Increasing connectivity in the Philippines, which is rapidly overcoming Filipino infrastructure problems, has made more and more of the large population of over 100 million people access the Internet. Connected Filipinos access the country's e-commerce market primarily through mobile devices and computers.
  • According to the World Bank, the Philippines is one of the most dynamic economies in the East Asia Pacific region. The Philippines has experienced rapid urbanization in recent years, strong growth in the middle class, and a large young population. As in other Southeast Asian countries, the emergence of powerful and affordable mobile devices is at the heart of the surge in internet use among Filipinos.
  • Recognizing the importance of e-commerce to the Philippine economy, the country's Ministry of Commerce and Industry (DTI) has developed the Philippines E-Commerce Roadmap 2016-2020/21. Its main goal is for online business activities to account for 25% of the country's GDP by 2020. The government has promised to implement this roadmap, especially in internet access, eGovernment systems, eBanking, ePayment, tax system improvements, consumer protection, logistics, etc.
  • The Philippines is developing rapidly, but it is also a fact that it lags behind in terms of technology and management. The lack of action by government leaders and local organizations to improve the country's technology and online industries has also hampered advances in e-commerce. When it comes to internet speeds, carriers and governments need improvements in the country.
  • Due to the COVID-19 pandemic, the demand for e-commerce in the Philippines is increasing. The fast-growing middle class, high consumer spending, and an emerging technical population all contribute to the growth of e-commerce.

Key Market Trends

Fashion industry on rise in the country

  • Filipinos were skeptical about spending money on the internet. But that changed during the COVID-19 pandemic. The blockage forced Filipinos to buy groceries and other necessities online. This has caused an explosive increase in e-commerce transactions. Filipino entrepreneurs quickly caught up. Suddenly, thousands of entrepreneurs set up their e-commerce stores selling everything from face masks to Adobe. Large companies are also doubling their e-commerce efforts in the fashion and beauty industry.
  • The e-commerce landscape of the Philippines is constantly growing and evolving with its neighbors in Southeast Asia. In fashion retail, physical stores in malls have been a major business model for decades, but pandemics have changed it all. The people in the country are choosing a specific business model that is scalable, fits their product, and fits the target audience.
  • Alibaba's one of the most expensive investments outside of China, Lazada, an e-commerce platform, received the highest visits in the first quarter of 2021. Fashion e-commerce sites have been hit in the region as clothing and apparel have made life easier for online shoppers staying at home.
  • The Philippines has encouraged new companies in the fashion industry to enter their country for the past few years. This has led to the market's continued growth and has been observed in the wholesale and retail industries, leveraging the e-commerce market with new brands in the country.
  • E-commerce contributed 3.4% to the Philippines' GDP in 2020, according to data from the Philippine Department of Trade and Industry (DTI). By 2022, the Philippines hopes to raise e-commerce income to 5.5% of GDP.
  • The growth of the domestic retail industry may also be related to the connection between Filipinos and the mall, which has led to its continued expansion. This has generated a lot of interest from foreign brands that have come to the country for many years. With the international brands encouraged in the country, the e-commerce market for fashion has increased as people use their websites and mobile apps for purchasing.

Increased use of internet, online payments and mobile phones leveraged e-commerce market

  • The e-commerce industry in the Philippines has the potential for growth and development. This is mainly driven by Filipino consumers who are absorbed in a digital lifestyle. The Philippines has achieved the highest e-commerce growth in the ASEAN region in recent years.
  • The Filipino lifestyle is becoming more and more digital. Coupled with the accelerated growth of GDP, the Philippines is a significant destination for the digital storm. Other industries will also benefit from the development of e-commerce in the Philippines. These industries include telecommunications (data boom), logistics and warehousing (supply chain), and social media. Shopping malls, retail chains, and lifestyle brands can also benefit from increased domestic internet usage by trying to innovate their businesses through the e-commerce industry.
  • As a mobile-first country, almost everyone in the Philippines owns a smartphone. And most people with smartphones use social media. As of January 2021, it is estimated that there are approximately 89 million social media users in the Philippines. This leverages social media marketing for various companies in various industries, including fashion, food & beverages, electronics, and more. Digital marketing can improve the e-commerce business in the country.
  • In recent years, more and more consumer electronics brands have entered the online retail market, either through partnerships with e-commerce retailers or by creating their own online platforms. At the same time, many retailers are expanding their stores to emerging cities such as Zamboanga and Pampanga outside of Metro Manila.
  • The number of online vendors who registered their enterprises with the DTI's Business Name Registration System (BNRS) increased significantly last year. The number of registered internet firms climbed from roughly 1,700 in the first quarter of 2020 to around 88,000 by the end of 2020.
  • Online sellers offering mobile gadgets and accessories are targeted at mobile media professionals and enthusiasts. For instance, Kim Store is claimed to be one of the most popular and established online gadget stores in the country. The company offers a wide range of original brand products and the latest models.

Competitive Landscape

The Philippines' e-commerce is moderately fragmented with the presence of key players in the country. The market might get highly competitive with the entry of new players, and international players entering the country leverages the e-commerce market.
  • April 2022 - Lazada has announced the official launch of Lazada One, the Group's regional headquarters and office in Singapore. Lazada has a strong presence in Southeast Asia and aims to further expand the digitization of the region. The company aims to empower women and young people across Southeast Asia, educate them in the digital economy, and provide scholarships and growth opportunities to break the digital divide. This will enable continuous exposure to six markets in Southeast Asia, including Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.
  • May 2022 - Globe Telecom, Inc has introduced another kind of power in the home through GFiber. GFiber is a new and exciting fiber portfolio that enables customers to experience high-speed Internet and services that transcend connectivity, including service-rich services and services that can be used in everyday life.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

This product will be delivered within 2 business days.

Table of Contents

1.1 Study Assumptions and Market Definitions
1.2 Scope of the Study
4.1 Market Overview
4.2 Industry Attractiveness-Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Key market trends and share of e-commerce of total Retail sector
4.4 Impact of COVID-19 on the e-commerce sales
5.1 Market Drivers
5.1.1 Growing Demand from Fashion Industry
5.1.2 Penetration of Internet and Smartphone Usage
5.2 Market Challenges
5.2.1 Low Internet Speed
5.3 Analysis of key demographic trends and patterns related to ecommerce industry in Philippines (Coverage to include Population, Internet Penetration, ecommerce Penetration, Age & Income etc.)
5.4 Analysis of the key modes of transaction in the ecommerce industry in Philippines (coverage to include prevalent modes of payment such as cash, card, bank transfer, wallets, etc.)
5.5 Analysis of cross-border ecommerce industry in Philippines (Current market value of cross-border & key trends)
5.6 Current positioning of country Philippines in the ecommerce industry in region Asia-Pacific
6 Market Segmentation
6.1 By B2C ecommerce
6.1.1 Market size (GMV) for the period of 2017-2027
6.1.2 Market Segmentation - by Application Beauty & Personal Care Consumer Electronics Fashion & Apparel Food & Beverage Furniture & Home Others (Toys, DIY, Media, etc.)
6.2 By B2B ecommerce
6.2.1 Market size for the period of 2017-2027
7 Competitive Landscape
7.1 Company Profiles
7.1.1 Lazada Group
7.1.2 Shopee
7.1.3 Metrodeal
7.1.4 eBay
7.1.5 Carousell
7.1.6 Galleon
7.1.7 BeautyMNL
7.1.8 Zalora
7.1.9 Globe Telecom, Inc.
8 Investment Analysis9 Future Outlook of the Market

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Lazada Group
  • Shopee
  • Metrodeal
  • eBay
  • Carousell
  • Galleon
  • BeautyMNL
  • Zalora
  • Globe Telecom, Inc.