The third Weekly with JC event kicked off the month of February with a series of talks on e-commerce led by Diana Fung, founder of Home De Luxe, Hong Kong. Philippine e-commerce, at a glance, is led by two major platforms, namely Shopee and Lazada, and 70% of the shoppers are within the ages of 30 to 40. Unsurprising, as this is the generation exposed to technology, and is therefore more comfortable using it.
According to Ms. Fung, we are in the ‘Golden Age of E-Commerce’. The Philippines’ e-commerce grew exponentially – largely, of course, due to COVID – and is now stabilizing since we have entered a new normal since 2021. In retail sales, US and China remain to be the leaders, taking up 30% in 2022. The Philippines is still small but has potential for growth. COVID has accelerated this growth, with long periods of GCQ and ECQ being the main reason as to why it did. Livestreaming and social media became influential in driving e-commerce and purchasing, with a huge surge in online merchants having been observed in 2020.
In the years 2021 – 2022, there was a resumption in offline spending which resulted in lower activities in online spending. This is due to the fact that the consumers went back to shopping and dining outside as well as “revenge traveling” – anything to be able to celebrate some semblance of the new normal. Still, online shopping is here to stay as consumers become more aware of its benefits.
For this year until 2025, the main drivers in the market will be the social media platforms. There was an observable increase in time spent by consumers, especially young generations, on social media. TikTok, which used to be a dancing app, recently incorporated live streaming which enabled live selling– as with Facebook, which has live streaming and marketplace included. Aside from social media, digital payments are also expected to drive growth, with cashless transactions preferred now due to ease of access and safety reasons.
Diana ended her presentation stating that compared to other Southeast Asian countries, the Philippine market size is still small due to its low average spend. They remain optimistic though, given the size of the young population and the fact that the middle class is still growing. Compared to other players like China and the US, we still have a long way to go in terms of growing e-commerce as a significant percentage of our total sales. The next two years will really see e-commerce growing and continuing to flourish.
John Michael de Vera, one of the panelists and the E-commerce Manager for Reckitt Philippines, shared what he thought especially of the offline resumption and sustained growth of e-commerce. According to him, we are a unique market, because majority of the families still prefer to go out. We got to spend time with families and friends once the lockdowns have lifted, mainly due to our preference of doing so. We are now more receptive in terms of paying for convenience though – it is safe to say that e-commerce is now a habit for a common Filipino for their transactions. However, in order to continue sustaining this sudden growth, we will need government intervention, as it will accelerate market maturity. The Philippine market is highly promo-centric, with it being highly connected with vouchers, promos, sales, etc., which is another thing to note with regards to the goal of growing e-commerce here.
Raenald de Jesus, another panelist who is the Head of Marketing for Shopback Philippines, added that there is still a lot of potential for our country, with many areas still untapped outside Metro Manila. Order distribution is highly concentrated in Luzon, but there are also a lot of growth opportunities in Visayas and Mindanao areas. There are several factors that we have yet to unlock in the VisMin area, which include efficient and timely delivery, affordable shopping fees, and local activations to spread awareness.
Overall, the e-commerce industry remains optimistic in growth alone. The next two years will show how much e-commerce has improved in our country and how it will help online merchants and consumers continue thriving.
John Clements Consultants regularly holds seminars, webinars, workshops, leadership development training sessions, and job fairs. We also take part in international conferences and conventions. Check out our upcoming events!
