Philippines e-commerce transactions to hit P500 billion

MANILA, Philippines — The country’s e-commerce transaction value may hit almost P500 billion over the next five years after the pandemic encouraged more activities online.

GlobalData, a leading data and analytics company in the UK, said the e-commerce transaction value in the Philippines would likely increase at a strong annual rate of 17 percent over a five-year period.

E-commerce transactions  are expected to reach nearly P495 billion ($10.3 billion) by 2025 from the P229.8 billion ($4.8 billion) in 2020.

This year alone, e-commerce transactions are estimated to grow 15 percent to reach P264.5 billion ($5.5 billion).

GlobalData said the country’s e-commerce market has been registering growth over the past years on the back of growing consumers’ preferences for online shopping and increasing internet penetration.

But the pandemic last year accelerated such a trend in a faster than expected way.

This as consumers were forced to stay at home to avoid contracting the virus, thus, the spike in e-commerce activities, both essential and non-essential.

GlobalData senior analyst Shivani Gupta said the current trend would continue with an increase in new online shoppers and proliferation of online sellers in the country.

“While sectors such as travel and accommodation were affected due to lockdown and travel restrictions, a strong growth was seen in online purchases of retail goods such as grocery and electronics. This helped drive the growth in e-commerce sales,” Gupta said.

The Department of Trade and Industry said the number of online sellers increased from 1,700 in March 2020 or during the start of the lockdown to 93,318 in January.

In order to boost e-commerce sales, the government earlier launched the e-commerce roadmap to promote adoption among small and medium enterprises and beef up consumer confidence in online shopping.

The government plans to raise the contribution of e-commerce  to the national economy to 5.5 percent by 2022 from  only 3.4 percent last year.

Consequently, GlobalData said the growth of online shopping would also support the expansion of electronic payments.

“Rising consumers’ preferences for online shopping, increasing number of online merchants, proliferation of alternative payment solutions and government support will support e-commerce sales in the Philippines,” Gupta said.

Alternative payment solutions such as GCash, PayMaya, and PayPal are the most preferred payment methods in the Philippines, collectively accounting for 30.6 percent of total e-commerce payments this year.

These are closely followed by cash with a 29.8 percent share while payment cards account for 23.5 percent.