Philstar.com / Ira Lissing
MANILA, Philippines — The Philippine e-commerce market is expected to reach P2.2 trillion by 2028 as more consumers buy online and more brands enter the sector, according to data and analytics firm GlobalData.
Shivani Gupta, senior banking and payments analyst at GlobalData, said the Philippine e-commerce market is expected to register a compound annual growth rate (CAGR) of 13.2 percent between 2024 and 2028, reaching 2.2 trillion pesos ($39.5 billion) in 2028.
“Fueled by changing consumer preferences, government initiatives, rise in social commerce and entry of new e-commerce players, e-commerce sales are likely to continue their upward trend over the next few years,” Gupta said.
The country's fast-growing e-commerce market is expected to expand nearly 20 percent this year to 1.3 trillion pesos ($24.1 billion) from 1.1 trillion pesos ($20.1 billion) last year, according to GlobalData.
From 2019 to 2023, the Philippine e-commerce market recorded a CAGR of 28.6%.
“The Philippine e-commerce market is growing rapidly, fuelled by a large young population, increased confidence in online payments, improved logistics and the availability of secure alternative payment solutions in the country. Online shopping festivals such as Black Friday, Cyber Monday and Singles' Day are also contributing to the overall growth,” Gupta said.
This growth has also been supported by government efforts to increase e-commerce sales, including a partnership between the Department of Trade and Industry and e-commerce and logistics provider SOMAGO to encourage small and medium-sized enterprises to set up their businesses online and sell their products through SOMAGO's platform.
More and more businesses are entering the e-commerce market to take advantage of the opportunities.
Last year, Chinese e-commerce platform Temu launched in the Philippines to compete with companies like Lazada and Shopee.
GlobalData said social media also acts as an e-commerce sales platform, increasing customer engagement and sales.
On payment methods, GlobalData said its financial services consumer survey conducted in the second quarter of last year showed that alternative payment solutions will lead the e-commerce sector with a total market share of 36.4% by 2023.
According to GlobalData, mobile wallets such as Gcash and Maya have become popular alternative payment tools with shoppers due to their simplicity, speed and convenience.
Payment cards will be the second most preferred payment method, with debit, credit, charge and prepaid cards combined to account for a 28.2% share by 2023.
“This is due to the added value benefits offered by payment cards such as interest-free installments, rewards programs, cashbacks and discounts,” Gupta said.
Although electronic payments are on the rise, more than 23% of e-commerce purchases in the country are still made with cash.
