E-Commerce in Philippines: Outlook & Retail Trends in 2023

Last Updated: October 30, 2023


How's The Development of E-Commerce in Philippines?

In the time period leading up to the pandemic, online retail sales represented a small portion of the overall market, around 3%. However, due to the effects of lockdowns, this share increased to nearly 4% in 2020, and an estimated of more than 5% by the end of 2022, owing to the impact of lockdowns and change in behavior for many Filipino.

Despite this growth, the Philippines is expected to lag behind other countries in the region in terms of online retail, due to factors such as slow internet speeds, inadequate logistics, and relatively low internet penetration. Only about 54% of the population is estimated to have used the internet in 2021, which is lower than the global average. 

However, there is a significant potential for online retailers to reach the 92 million active social media users in the Philippines, who access the internet primarily through their smartphones. The government estimates that e-commerce contributed 3.4% to the country’s GDP in 2020, and this is projected to increase to 5.5% in 2022.

The government has attempted to boost the sector in the past, but these efforts have fallen short of the target set in the e-Commerce Roadmap 2016-20, which aimed to have the sector contribute 25% to GDP by the end of the plan’s time horizon. In 2020, the government passed the Internet Transactions Act to improve regulation in the sector, but implementation has been hindered by issues such as resistance from e-commerce platforms to provisions that would hold them liable for products that do not comply with existing laws.

Online & Offline Retail in Philippines
Unit: Billion USD
Online & Offline Retail Growth in Philippines
Unit: %
Retail Value Added (% of GDP) in Philippines
Unit: %
E-Commerce Sales a a % of Retail in Philippines
Unit: %

Competition Among E-Commerce Platforms in Philippines

Online marketplaces like Lazada, Shopee, Zalora, Ebay, and Kimstore have been becoming increasingly popular in the Philippines since the onset of the pandemic. Lazada, which is owned by Alibaba in China, has been making its products available to customers in the ASEAN region through its Taobao platform. Additionally, online grocery shopping has also seen an increase, with delivery companies like Foodpanda partnering with 7-Eleven stores. With the rise in online shopping, digital payment services have also seen a boost. The market is currently dominated by two players, Gcash and Maya, with Gcash having 60 million users and Maya boasting 47 million registered users. With a large youth base in the Philippines, there is potential for convenient credit facilities such as “buy now, pay later” schemes to be successful.

Retail & E-Commerce Trends in Philippines

3rd-party platforms dominating the growth: Since the outbreak of the pandemic in 2020, the e-commerce market in the Philippines has grown rapidly, with a majority of this growth being captured by major e-commerce platforms. This is due to their established IT infrastructure and user-friendly interfaces, which give them an advantage over local competitors. However, local retailers are also seeing growth, with companies like SM Retail reporting a 600% increase in online sales growth in 2020, and the SSI Group reporting e-commerce sales four and a half times larger than in 2019. These retailers have invested significantly to continue improving their e-commerce offerings.

Expanding Categories: The pandemic has led to changes in consumer purchasing behavior in the Philippines with more people opting to buy essentials online. Digital platforms have had to prioritize easy and convenient access to everyday essentials, leading to a 15-fold increase in categories such as food staples and cleaning supplies. Retailers have adopted the use of personal shoppers to meet the needs of consumers looking for ways to avoid person-to-person contact. Examples of this include SM Retail launching a concierge service and Rustan’s Department Store launching a Personal Shopper On Call service. Despite the trend of personal shoppers, e-commerce platform Shopee broke a record by selling 12 million items in the first 24 minutes of its 12.12 year-end sale in 2020.

Financial Environment

Source: World Bank, Payment Providers, eMarketer

In Philippines, There are about 1.9% of people use credit cards, and 21% of people use debit cards. While there are 9.1% of people purchase on the internet, there is only 7% of people with online banking accounts.

% of People With Financial Accounts
Unit: %
% of People with Credit Cards
Unit: %
% of People with Debit Cards
Unit: %
% of People Exchange Through Digital Channels
Unit: %
% of People Buy Through Online Channels
Unit: %
% of People with Internet Banking Accounts
Unit: %
% of People Pay Utility Bill Online
Unit: %
E-Commerce Sales as a % of Total Retail
Unit: %

Weekly Use of E-Commerce

Source: Statista Digital Market Outlook

E-Commerce Driving Factors

Source: GWI.com (Q3, 2021)

For E-Commerce Customers in PhilippinesWhat are the major driving factors to purchasing online?

% of respondents think is their main drivers
Source: Multi-select survey

Consumer Goods E-Commerce in Philippines

Source: GWI.com (Q3, 2021)

There is 43.31 million consumer goods e-commerce users in Philippines, and they spend total of around 16.79 billion USD dollars in 2021. That makes a per capita spending on consumer goods e-commerce of around  388 USD. Also, in those e-commerce users, about 31.8% of them purchase through their mobile phone.

Market Size of Consumer Goods E-Commerce
Unit: Million USD

Digital Media E-Commerce in Philippines

Source: Digital Market Outlook 2021
Market Size of Digital Media E-Commerce
Unit: Million USD
  • Retail Sales & E-Commerce Penetration: eMarketer, Edge By Ascential, Euromonitor Retail Passport
  • Currency: Based on IMF Data 2022/12
  • Consumer Behavior: Statista Digital Market Outlook
  • Retail Channels: Euromonitor, Local Association, Financial Reports (Of Relevant Retailers)
  • Data Compilation: OOSGA.org
  • Analysis: OOSGA CR Team Analytics

E-Commerce Roadmap: The Department of Trade Industry

SM Retail:  2020 Annual Report 

Author: CR Team

Our consumer research practice tracks what customers spend and how they make decisions across major economies in the world.

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