PH e-commerce industry sees more growth in 2019

Metro Manila (CNN Philippines, January 4) — The e-commerce industry is gaining ground as digital marketplaces end 2018 with record highs to reflect the growing number of Filipinos doing their shopping online.

The Internet World Stats reported that around 67 million Filipinos were active online in January 2018. This was a 12% increase year-on-year.

The country also ranked first in the world in terms of social media use and amount of time spent online. Businesses believe this makes the country an ideal place for e-commerce to thrive.

A report by Statista said that the Philippine e-commerce market revenue grew to $840 million or about P44 trillion in 2018 from $688 million or about P36 trillion in 2017. Revenue is expected to grow about 10.5% annually leading to a market volume of $996 million dollars or about P53 trillion pesos by 2019.

Co-founder and CEO of Zalora Philippines Paulo Campos III said their company has seen accelerated growth in the last 2 to 3 years, particularly in the 4th quarter of the year where most transactions happened. He said he expects more growth in 2019 and the years ahead.

According to Campos, about 2% of the overall retail market is done online. E-commerce penetration is about 2% and he fully expects that to go up to 5-7% in the next few years, which means the market is growing extremely fast.

Southeast Asia's leading e-commerce firm Lazada also reported record breaking sales during the 11-11 and 12-12 online shopping festivals.

The Lazada group saw 1.3 billion visits during their 11-11 and 12-12 sale days. 12-12 sales reached more than 30 times their normal day gross merchandise value in various locations, including the Philippines.

The consistent growth of e-commerce in the country can be attributed to the convenience sought by digital-savvy shoppers.

The government also sees a big potential for e-commerce. The Trade department launched its e-commerce roadmap up to 2020. It targets to have e-commerce contribute 25% to the gross domestic product by 2020 from 10 percent in 2015. The agency believes going digital will also help micro, small and medium enterprises compete globally.

Campos said he believes the Philippines can be number 1 in terms of online shopping given the amount of time Filipinos spend online and the ecosystem converging to make e-commerce thrive in the country.

“The beautiful thing about e-commerce is somehow it's a very democratizing force that anyone can really sell online and that you no longer need big investment to put up a store or offline presence to be able to sell,” said Campos in an interview.

“There's something about the power of unleashing the digital Filipino into the global economy that is quite exciting and that any type of business that emerges online, whether it be e-commerce or even some of the other digital businesses like ride-hailing, will be particularly strong here in the Philippines than in other countries,” he added.

While Campos believes internet access and the payments space can be improved, he said the country has crossed over to a point where e-commerce can only grow and become a major contributor to the retail sector.

This prospect encourages entrepreneurs to take their businesses online as they enter 2019.