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Monday, July 15, 2024

PH e-commerce expected to grow 15% to $16b in 2023—Locad study

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Electronic commerce in the Philippines is expected to grow 15 percent to $16 billion in 2023 from $14 billion in 2022 across all major platforms, albeit slower compared to the compounded annual growth rate of 67 percent in the last four years.

Locad co-founder and chief executive Constantine Robertz said there remained significant growth potential for Philippines brands in regional and global markets despite a slowing down of e-commerce in the new normal.

“To grow in percentage term is not as exponential anymore as it was in the pandemic. We’re still seeing growth on a much higher base than what we had last year and and even more so in the first few years in pandemic and pre-pandemic,” he said at the Philippine Global e-Commerce Summit 2023 at the SMX Convention Center Wednesday.

A market research study organized by logistics solutions provider Locad Philippines with Cube Asia estimates the Philippine e-commerce would reach $24 billion, with 17-percent growth through 2025.

The study reveals that the Philippines’ share is close to a tenth of the combined e-commerce value in Southeast Asia and Australia of $170 billion.

The US controls a sixth of global e-commerce at $1.1 trillion compared the expected global value of $6.3 trillion in 2023.

“With a thriving local e-commerce scene and promising global outlook, Filipino and regional brands face opportunity to grow through cross-border commerce,” Robert said.

He said key challenges such as massive competition in the regional market, more so in the global market, logistics and fulfillment, financial payment methods and regulatory barriers, face Philippine brands and players.

Department of Trade and Industry assistant secretary Glenn Peñaranda, who keynoted the summit, said cross-border shopping plays a crucial role in the e-commerce landscape, constituting a significant portion of total e-commerce sales.

Citing a recent report from JP Morgan, he said the Philippines continues to engage China, the US and South Korea for cross-border purchases.

“Notably, around 50 percent of online shoppers in the Philippines engage in cross-border shopping, with sales accounting for 24 percent of the entire e-commerce market,” he said.

He said the Philippines has immense potential to increase cross border shopping with 79 million active online users. E-Commerce has contributed 3.4 percent, about $2 billion, to the country’s gross domestic product in 2020.

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