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Philippine E-commerce Market to Reach P2.2 Trillion by 2028

Philippine E-commerce Market

The Philippine e-commerce market is expected to hit P2.2 trillion by 2028, driven by increasing online purchases and the entry of more brands, according to data and analytics company GlobalData.

Key Drivers of E-commerce Growth

Shivani Gupta, Senior Banking and Payments Analyst at GlobalData, indicated that the Philippine e-commerce market is anticipated to post a compound annual growth rate (CAGR) of 13.2% from 2024 to 2028, reaching P2.2 trillion ($39.5 billion) in 2028.

Gupta stated, “The uptrend in e-commerce sales is likely to continue over the next few years, supported by evolving consumer preferences, government initiatives, rise in social commerce, and the entry of new e-commerce companies.”

For 2023, GlobalData predicts the country’s e-commerce market will expand by nearly 20%, from P1.1 trillion ($20.1 billion) last year to P1.3 trillion ($24.1 billion). From 2019 to 2023, the market registered a 28.6% CAGR.

Factors Supporting Market Expansion

Gupta highlighted several factors contributing to the rapid growth of the Philippine e-commerce market:

  • Young Population: A large, tech-savvy youth demographic is driving online shopping.
  • Confidence in Online Payments: Increasing trust in online payment systems.
  • Improving Logistics: Better logistics and delivery systems are facilitating smoother transactions.
  • Secure Payment Solutions: Availability of secure alternative payment methods.
  • Online Shopping Festivals: Events like Black Friday, Cyber Monday, and Single’s Day boost sales.

Government initiatives also play a significant role in promoting e-commerce. The Department of Trade and Industry’s partnership with e-commerce and logistics provider SOMAGO encourages small and medium enterprises (SMEs) to establish online businesses and sell products via the SOMAGO platform.

The market is becoming more competitive with the entry of new companies. Last year, Chinese e-commerce platform Temu launched operations in the Philippines to compete with established players like Lazada and Shopee. Social media platforms are also being utilized as e-commerce channels to enhance customer engagement and boost sales.

Preferred Payment Methods

According to GlobalData’s Financial Services Consumer Survey conducted in Q2 2023, alternative payment solutions lead the e-commerce space with a combined market share of 36.4% in 2023. Mobile wallets such as Gcash and Maya are popular due to their simplicity, speed, and convenience.

Payment cards, including debit, credit, charge, and prepaid cards, collectively account for a 28.2% share. These are favored for their value-added benefits such as interest-free installment payments, reward programs, cashback, and discounts.

Despite the rise in electronic payments, over 23% of e-commerce purchases in the Philippines are still made using cash.

 

Check Also: Revolutionizing Marketing: Filipino Brands Thriving on TikTok

 

Before this article ends, let’s uncover the…

Future Trends in Philippine E-commerce

Philippine E-commerce Market

As the Philippine e-commerce market matures, several emerging trends are poised to shape its future landscape. These include the adoption of advanced technologies, increased focus on sustainability, and the rise of personalized shopping experiences.

Technological Advancements. The integration of artificial intelligence (AI) and machine learning (ML) is enhancing customer service through chatbots and personalized recommendations. Virtual reality (VR) and augmented reality (AR) are also being explored to provide immersive shopping experiences.

Sustainability Initiatives. With growing environmental consciousness, e-commerce companies are adopting more sustainable practices. This includes eco-friendly packaging, carbon-neutral shipping options, and promoting the sale of sustainable products.

Personalized Shopping. Leveraging big data and analytics, e-commerce platforms are offering more personalized shopping experiences. This includes tailored product recommendations, customized marketing campaigns, and individualized customer service.

These trends, combined with the existing drivers of market growth, indicate a robust future for the Philippine e-commerce sector. As businesses continue to innovate and adapt to consumer demands, the market is expected to evolve in dynamic and exciting ways.

Overall…

The Philippine e-commerce market is poised for substantial growth, projected to reach P2.2 trillion by 2028. This expansion is fueled by factors such as a young, tech-savvy population, improved online payment systems, better logistics, and supportive government initiatives. The competitive landscape is further enriched by the entry of new e-commerce players and the rise of social commerce, enhancing consumer engagement and driving sales.

Looking ahead, the market will be shaped by emerging trends like technological advancements, sustainability initiatives, and personalized shopping experiences. The integration of AI, VR, and AR will transform customer service and shopping interactions, while a focus on eco-friendly practices will address increasing environmental concerns. These developments, alongside existing growth drivers, promise a dynamic and prosperous future for the Philippine e-commerce sector.

 

Read Also: World Bank Raises Economic Growth Projection for Philippine GDP in 2025

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Written by Marjo Piedad

Traveler | Foodie | CONTENT EDITOR
📍Cebu, Philippines
 
For features and advertising inquiries, please email  editor@proudlyfilipino.com.

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