The Philippines e-commerce market is growing at a fast pace and is expected to surge by 19.6% in 2024, driven by growing consumer preference for online shopping and strong internet penetration, finds GlobalData, a leading data and analytics company.

GlobalData’s E-Commerce Analytics reveals that Philippine e-commerce market registered a compound annual growth rate (CAGR) of 28.6% between 2019 and 2023 to reach PHP1.1 trillion ($20.1 billion) in 2023. The market is set to reach PHP1.3 trillion ($24.1 billion) in 2024.

Shivani Gupta, Senior Banking and Payments Analyst at GlobalData, comments: “The Philippines’ e-commerce market is growing at fast pace supported by a large young population, increasing confidence in online payments, improving logistics, and the availability of secure alternative payment solutions in the country. Online shopping festivals such as Black Friday, Cyber Monday, and Single’s Day have also contributed to the overall growth.”

The government is also taking various initiatives to boost e-commerce sales. In June 2023, the Department of Trade and Industry launched the One Town One Product Philippines program, in partnership with e-commerce and logistics provider SOMAGO. Under the program, SMEs are encouraged to set up their business online and sell their products via the SOMAGO platform. It also helps them to upgrade their skills and capabilities in online business and provide them with opportunities to sell their products both domestically and internationally via this platform.

To leverage the growth potential in e-commerce space, international brands are also venturing into this space. For instance, in August 2023, Chinese e-commerce platform Temu launched its operations in the Philippines to compete with companies such as Lazada, and Shopee.

Social media is also playing a key role as an e-commerce selling platform, with social media companies using their channels to enhance customer engagement and sales. TikTok shop, with millions of users, leads the way in social commerce by enabling direct product purchases on the platform.

In terms of payment methods, alternative payment solutions lead e-commerce space with a combined market share of 36.4% in 2023, according to the GlobalData’s 2023 Financial Services Consumer Survey*. Gcash, Maya and PayPal are some of the popular alternative payment tools among online shoppers, which have gained prominence due to their simplicity, speed, and convenience.

Gupta continues: “Payment cards are the second most preferred payment method, with debit, credit and charge, and prepaid cards collectively accounting for 28.2% share in 2023. This can be attributed to the value-added benefits offered on payment cards, including interest free instalment payments, reward programs, cashback, and discounts.”

Despite the rise in electronic payments, over 23% of e-commerce purchases in the Philippine are still made using cash. This highlights the traditional preference for cash among consumers especially among unbanked, rural, and elderly population.

Gupta concludes: “The uptrend in e-commerce sales is likely to continue over the next few years supported by the evolving consumer preferences, government initiatives, rise in social commerce and the entry of new e-commerce companies. The e-commerce market is anticipated to increase at a CAGR of 13.2% between 2024 and 2028 to reach PHP2.2 trillion ($39.5 billion) in 2028.”

*GlobalData’s 2023 Financial Services Consumer Survey was carried out in Q2 2023. Approximately 50,000 respondents aged 18+ were surveyed across 40 countries.