It is a fact. E-commerce and m-commerce are still on the rise. While many would say that the past decade (and its experience with the bursting of the dotcom bubble in its earlier years) may mean that the digital space is too crowded, the fact remains that for a fast-growing market like Southeast Asia, the cycle has not yet gone past its growth phase.
Internet and smartphone penetration’s rapid increase in 2014 and 2015 ensure massive opportunities for commerce on the web, particularly on mobile. The Philippines with its 41% Internet penetration – higher than that of the region’s 32%– represents a promising market of around 44 million users, with steady growth expected, particularly in the area of mobile. In fact, according to Euromonitor International, m-commerce is expected to reach US$9 million in both Philippine and Thai markets by 2018.
Smartphones and mcommerce
In 2014, the Philippines grew by 60% in terms of retail volume, with recorded sales of smartphones hitting 10.8 million units for the year. This number may even be higher considering the gray market and the underground economy.
This growth was largely fuelled by the entry of low-cost phones – not just from the local and secondary brands, but from the top brands – as part of the efforts to push subscribers into using more data.
The low costs are key: whereas in previous years, smartphones cost upwards of Php30,000, the number of sub- Php 10,000 and sub-PhP5,000 units and models have grown exponentially in the past several years, making them more affordable particularly to younger consumers with less disposable income.
Opportunities for mcommerce
The increased smartphone penetration through low-cost phones aimed at younger customers equals increasing opportunities in mobile commerce.
Internet retail appeals more to younger consumers as they are generally more technology-savvy, digitally-connected and highly exposed to e-commerce. Younger consumers are also more open to its novelty, as well as have more propensity for impulse buying, making them more receptive to internet shopping.
New developments, like iOS and Android apps make it easier for consumers to get updates on new products. Lazada, Zalora and other retailers have developed applications for mobile, with other industries are jumping into the app craze . Banks are now creating mobile apps for their customers, as are different businesses- food companies, individual clothing brands and more.
Some analysts attribute the growth of m-commerce in the Philippines to the booming business process outsourcing (BPO) industry. International working hours and night shifts make the 24/7 nature of m-commerce much more viable than regular shopping.
Peer influence via social media applications, as well as a greater willingness to accept information through mobile applications, have also contributed to the growth of the mobile phenomenon.
While older Filipinos are still uncertain about online payments, and prefer Cash on Delivery arrangements, younger users are more comfortable, particularly with known secure online payment systems such as Paypal, G-Cash, Smartmoney, Dragonpay, Pesopay and the like. Physical payment centers such as banks, convenience stores and pawnshops now also accept payments for online transactions, addressing half the discomfort of making online payments.
Still has more potential
Many experts say that mobile commerce in the Philippines still has not yet reached its peak. Compared with internet usage statistics, particularly on social media, current mobile commerce statistics prove that there is still much room to grow. But with more players, more education, more tools –most likely coming from a population of digital natives, we can be quite certain that we will see rapid acceleration in the growth of mcommerce in the Philippines.