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Online Retail in the Philippines Is Spurred by Rising Internet Penetration, but Challenged by Infrastructure

The report “Philippines B2C E-Commerce Market 2015,” newly published by Hamburg-based secondary market research company yStats.com, specialized in market intelligence on B2C E-Commerce and Online Payments worldwide, provides insights into evolving online retail in the Philippines. The report finds that among the factors contributing to development of B2C E-Commerce in the Philippines are rising smartphone and Internet penetration, while the major challenges include payment and logistics infrastructures. 

With a population of over 100 million people and the thirteenth largest Internet audience worldwide, the Philippines has a great potential for B2C E-Commerce development. Half of the population is under 25 years-old, and thus more likely to become tech-savvy. Although only a one-digit share of adult Internet users was making purchases online in the Philippines last year, less than in some other emerging markets worldwide, rising Internet and smartphone penetration is expected to boost online shopping. The main challenges to the robust growth of B2C E-Commerce in the Philippines are underdeveloped payments and logistics infrastructure. The government recently launched a roadmap to overcome these challenges and support the growth of online retail.

Philippines B2C E-Commerce Market 2015-01

Some major trends of the B2C E-Commerce market in the Philippines include mobile shopping, social commerce and cross-border shopping.  A high double-digit share of online shoppers in the Philippines used mobile phones to make purchases online at the start of last year, more than in any other country in Southeast Asia, though M-Commerce was largely limited to the purchase of digital goods and services. Furthermore, the online audience in the Philippines is one of the most engaged in social networks by global standards, which makes social media an important platform for online merchants. The country’s major online retailer, Lazada.com.ph had over 10 million fans on its Facebook page in the Philippines, ranking second in popularity among all Facebook pages in the country.

Other important players of the E-Commerce market in the Philippines included daily deals websites Cashcashpinoy.com and Ensogo.com.ph, each of which received substantial investment recently, online clothing retailer Zalora.com.ph and classifieds website Olx.ph. Popular foreign shopping websites include Amazon.com, Aliexpress.com and eBay.com.