Philippines - ECommerce Philippines - ECommerce

Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and , reputable, prominent B2B websites.

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Last Published: 7/18/2019

Overview

eCommerce is geared for massive growth but is also facing challenges related to the need for adequate network infrastructure. The rising middle class, high consumer spending, and a young and vibrant, tech-savvy population is driving eCommerce forward by leaps and bounds. There is pressure from the Philippine Government for the private telecommunications companies to provide higher bandwidth capacity to the retail market.

Current Market Trends

Filipinos are prolific users of social media.  Estimates this year show that there are 76 million active social media users from the Philippines.  Of this number, 75 million are on Facebook; 12 million on Twitter, and 4 million are LinkedIn users [1].
There is good reason to be optimistic about eCommerce growth in the Philippines. However, the country also faces the following challenges:
Infrastructure gap: need further improvement on internet speed. According to OOKLA’s Speedtest Global Index, the Philippines fixed broadband internet speed is 19.28 Mbps on February 2019.  This is a 143.74 percent improvement from July 2016’s 7.91 Mbps and puts the Philippines on the 21^st in Asia Pacific for fixed broadband.  Mobile broadband speed also improved by 94.35 percent to 14.46 Mbps in February 2019 from 7.44 Mbps in July 2016.  This bumped up the Philippines ranking to 23^rd in Asia Pacific in mobile broadband.[2]

Most internet users gain access through smartphones.  Smartphone penetration is now at 48.4 percent of households[3].

• Low Broadband Penetration: Many Filipinos access the web through internet cafés and their workplace.  
• Low digital payment penetration: Bangko Sentral ng Pilipinas (BSP) in a 2018 report shows that an estimated 66 percent of Filipinos do not use banks and about eight percent use credit cards . Hence, online stores in the Philippines provide cash on delivery payment options or payment centers (i.e. 7/11 branches).  Different companies such as telcos, banks, and fintech start-ups have rolled out e-wallets to for unbanked populations.  Major players include PayMaya (PLDT), GCash (Globe). The BSP also launched PESONet, a new electronic funds transfer service that enables customers of participating banks, e-money issuers or mobile money operators to transfer funds in Philippine Peso currency to another customer of other participating banks, e-money issuers or mobile money operators in the Philippines.
• The Philippines is a fast-growing retail e-commerce market and the most popular retail e-commerce platforms include Lazada, Shoppee, Zalora, Ebay, and Kimstore.[4]
• Security concerns: Those who have credit cards are wary of transacting online given the numerous incidents of hacking and poor cybersecurity efforts that still plague the country.  This is why e-commerce platforms have established a cash payment mechanism using large convenience store chains (i.e. 7/11 and Mini Stop), and local express delivery service (i.e. LBC). Filipino consumers require further education on security measures that can protect their online transactions. This will establish increased levels of confidence in online banking, purchasing, and selling.

eCommerce Intellectual Property Rights

The Philippines has passed adequate legislation to promote eCommerce; the eCommerce Law, Cybercrime, and Data Privacy Laws.  However, enforcement agencies like the Department of Justice and Philippine National Police, and the local courts are not yet adept to handle cases involving electronic transactions.  The system is simply not yet in place.  The National Privacy Commission (NPC) is tasked with implementing the Data Privacy Law, and they have had significant achievement through Philippine-based companies designating “Data Privacy Officers” or DPOs.  The NPC is also leading the way for the Philippines to be complaint with international privacy agreements such as the European General Data Protection Regulation (GDPR) and APEC Cross Border Privacy Rules (CBPR).

Popular eCommerce Sites

• www.b2bpricenow.com– A trading portal with close to 8,000 members that are mostly from cooperatives.  It is officially endorsed by the Philippine Congress as the Philippine e-Marketplace for Agriculture and Fisheries.  This site is a trading portal that provides up to the minute price update on market information for agriculture, consumer goods, and industrial manufactures. 
• https://e-order.asiarx.com/– Caters primarily to the pharmaceutical and medical supply industry, has a regional scope, multilingual capabilities, tight real-time integration with supplier systems, and focus on the customer’s perspective and business processes.  AsiaRx takes control of the entire procurement process from finding the product to availability check, to order status verification.
• http://philippines.tradekey.com – A B2B marketplace connecting Filipino exporters with overseas buyers.  It connects traders with global wholesalers, buyers, importers and exporters, manufacturers and distributors in over 240 countries.
• www.philippinecompanies.com – A Philippine business directory with 413,282 registered companies. This website builds its database from publicly accessible directories such as Business Registrations from various municipalities.
• http://philippines.tradeford.com – Provides global importers with information on products, exporters, suppliers, manufacturers and wholesalers.  TradeFord's database of buyers and suppliers covers major industries such as apparel, fashion, chemicals, construction, electronics, furniture, food and beverage, health and beauty, machinery, transportation, and more.
• https://www.kenresearch.com – Global industry research and information service company.  Provides industry intelligence, equity research reports and business consulting services covering several sectors.
• https://www.olx.ph/ - Global online marketplace open in 45 countries in world used for buying and selling of goods and services. 

Online Payment
The increase of online shopping and access to online bank transactions is increasing payment in the Philippines. Vendors are turning to online payment as a convenient buying method.  However, security concerns, and a cash-based society is limiting

Mobile eCommerce

Data from Globe Telecom and the Philippine Long-Distance Telephone Company shows that there are 134.6 million mobile subscribers in the Philippines[5] [6].  Most Filipinos access the internet through their mobile phones, providing cost effective and consistent access. Philippine and international businesses sell products and services through mobile that has a direct access to online consumers. The Philippines is the fastest growing app market in Southeast Asia.

Digital Marketing

The proliferation of social media and online platforms directly contributed to the growth of digital marketing. There were 76 million Filipino online users in 2018 and the strong growth trends continue. Traditional marketing companies emerged with new marketing techniques that include social media. Businesses are continuing to transition to digital marketing to reach an even wider market for potential customers; this is a strong and growing trend[7].

Major Buying Holidays

Consumers in the Philippines traditionally make purchases during the months of November, December, March, April and May. These are the peak months that employees receive salary bonuses. Businesses offer sales and discounts during these months.

Social Media

Filipinos are prolific users of social media.  Estimates this year show that there are 76 million active social media users in the Philippines.  Of this number, 75 million use Facebook; 12 million use Twitter, and 4 million are LinkedIn users.  The Philippines is recognized as one of the top countries for internet users worldwide in terms of time spent on social media; 4 hours on mobile and 5.2 hours on desktop and tablet.[8] Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.

More Information

Philippines eCommerce Industry Trade Development and Promotion eCommerce