Philippines E-Commerce Performance Recovering in 2019

2018 was a challenging year for e-commerce growth in the Philippines as we had to deal with inflation, competition with imported products found in local marketplaces, high transportation cost, and slow Internet connectivity in the multiple areas in the countryside.

2019 began showing signs of recovery. We hope to restore back to 2017 levels and even surpass it soon.

DigitalFilipino.com and i-Metrics Asia-Pacific Corporation released the June 2019 edition of the Philippines E-Commerce Intensity Index (ECI) and Philippines E-Commerce Maturity Scorecard (ECMS). This initiative started in August 2013 in response to e-commerce statistics at that time which I believe do not accurate represent our country’s e-commerce growth.

Philippines E-Commerce Intensity Index (ECI)

The ECI measures the extent of B2B online engagement in 3 industries – manufacturing, retail/wholesale, and services. It tracks:

• Percent of revenues generated online.
• Percent of payments transacted online.
• Percent of purchases transacted online.

The panel is comprised of companies from the top 10,000 corporations of the Philippines. The relevant e-commerce data, generated by the report, are meant to help industry and government with planning and decision making.

Here are the report highlights as of June 2019 are:

1. The Composite Online Purchase is at 50%. This was 58% in 2017.
2. The Composite Online Revenue is at 42%. This was 49% in 2017.
3. The Composite Online Payment is at 47%. This was 41% in 2017.

The services sector is the one continuously growing whereas the manufacturing and retail/wholesale sector is heavily affected by developments in the past 2 years.

Philippines E-Commerce Maturity Scorecard

To measure the demand-side, we also have the Philippines E-Commerce Maturity Scorecard. It measures:

• Time spent online.
• Extend of online influence in Internet user’s decision making.
• Estimate the value of purchases and payments made online.

Highlights of the report as of June 2019 includes:

1. Internet usage at 6.65 hours per day.
2. The popular digital resource used for online transaction are GCash/PayMaya at 21%. Credit card at 17%.
3. Friends and families are primary influencers for online purchase.
4. Electronics (52%) and Clothes/Shoes (47%) were popular product categories purchased by users in the past month.
5. As of end 2018, Internet users who have done online shopping is at 28%. Online sales volume estimated at 274 billion pesos.

Aiming to reach 25% of eGDP

The ECI findings help us determine the eGDP, currently at 11%. This is the derived proportion of the sum of online transactions o the country’s Gross Domestic Product as published by the Philippines Statistical Authority. B2B E-Commerce Sales value estimated at one trillion pesos.

For e-commerce impact to reach 25% of eGDP, the following needs to take place:

• Improve Internet connectivity for businesses nationwide. 47% uses mobile phone to access the Internet.
• Get more MSMEs to market, sell their products and services via online retail or wholesale through their own online stores or 3rd party marketplaces.
• We need more e-commerce stores in the country to address the need of MSMEs to go online. This is currently less than 20.000. In the Philippines E-Commerce Roadmap 2016-2020, we were aiming for 100,000 MSMEs to do business online.

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