The Philippines e-commerce market grew by an estimated rate of 31.3 percent in 2022 to reach PHP 500.9 billion (USD 9.8 billion), as an increasing number of consumers shift from offline to online purchases, according to a report released by GlobalData.
Following that same growth trajectory, the e-commerce market in the Philippines is expected to grow by 22.9 percent to reach PHP 615.7 billion in 2023.
As a result of the nation’s growing e-commerce market, cards are the most preferred payment tool for e-commerce purchases in the Philippines, accounting for over half of online purchases in 2022, the report added.
Meanwhile, nearly 90 percent of Filipino consumers reported having shopped online in the past six months, while only 6 percent indicated that they had never shopped online.
“The Philippines is one of the fastest growing e-commerce markets in Southeast Asia, supported by high internet and smartphone penetration,” said Shivani Gupta, Senior Banking and Payments Analyst at GlobalData.
“Furthermore, the Covid-19 pandemic accelerated the shift in consumer preference from brick-and-mortar to online channels. E-commerce growth in the Philippines has also been boosted by government initiatives such as ‘Philippine e-Commerce Roadmap 2020,’ which aims to promote e-commerce adoption among SMEs.”
GlobalData’s survey also revealed that among various tools used for e-commerce purchases, payment cards dominate, with debit, credit, and charge cards collectively accounting for 51 percent share in 2022. This can be attributed to the value-added benefits offered on payment cards, including interest-free instalment payments, reward programs, cashback, and discounts, the report added.
Alternative payment tools such as GCash, PayPal, and PayMaya are the second most preferred payment tools for e-commerce purchases, collectively accounting for a 24.5 percent share of transaction value in 2022.
“Emergence of new payment models such as buy now pay later, which allows consumers to split total purchase amount into instalments are some of the factors supporting alternative payments growth,” added Shivani.
“Several players including Atome, BillEase, Akulaku, Cashalo, UnaPay, and TendoPay are offering this service in the Philippines. E-commerce platform Lazada joined the list with its BNPL service ‘LazPayLater’ launched in November 2022.”