The Philippines has turned to e-Commerce and the digital economy as essential drivers for economic growth and development. As the country continues its rapid digitalization, this sector plays a crucial role in stimulating the economy, creating jobs, and supporting local businesses. Within this sector, online digital platforms are seen as “game-changers” that can propel the economy forward.
“The upward trend is a reflection of the significant shift in consumer behavior and the recognition by businesses of the potential of e-Commerce,” notes Daniel Marogy, Managing Director of foodpanda Philippines, a key player in the online food and grocery platform space. “It also underscores the transformative power of e-Commerce in tapping into a broader customer base, unlocking the vast potential of the digital marketplace, and shaping a new era of commerce in the Philippines,” he adds.
Projections from data and analytics firm Global Data indicate an impressive 22.9% increase in the country’s e-Commerce sector this year. With more consumers transitioning from offline to online purchases, the industry is expected to reach P600 billion by 2023.
This optimistic outlook aligns with President Ferdinand Marcos Jr.’s vision to accelerate digitalization in the Philippines, as he believes that the transition to the digital world would especially benefit developing countries seeking a swift recovery from the pandemic.
Meanwhile, the Department of Trade and Industry (DTI) introduced the Philippines e-Commerce Roadmap 2022, a strategic initiative that aims to support industry development, generate long-term livelihood opportunities, and promote inclusive growth and ease of doing business. It especially recognizes the crucial role of micro, small, and medium enterprises (MSMEs) as the backbone of the Philippine economy, and the need to help these businesses digitalize and thrive.
The role of online food delivery platforms in empowering MSMEs
Micro, small, and medium enterprises are considered the economy’s lifeblood, contributing approximately 40% to the country’s GDP, and comprising over 99% of the more than 1 million businesses in the country.
This prevalence is also evident in foodpanda’s portfolio of vendor partners, says Marogy. “Majority of our partner vendors are in fact MSMEs such as mom-and-pop stores, home-based food businesses, and small homegrown restaurants, ” explains Marogy. “Many of them became our partners during the height of the pandemic, as the lockdowns created a level playing field for smaller players to reach a bigger market through online platforms,” he says.
“For some of these small businesses, onboarding with foodpanda was their very first foray into e-Commerce, and we helped them to digitize. And many of these, in turn, became very successful businesses that rely on both a physical store presence as well as an online platform to reach many customers. So our partnership with MSMEs is truly a win-win relationship,” Marogy adds.
Livelihood opportunities for restaurant workers and freelance delivery partners
The digitalization of the Filipino food industry, in particular, has also led to significant livelihood generation. MSMEs alone contribute 63% of the country’s total employment or about 5.4M jobs, according to data from DTI. By embracing online platforms, restaurants have gained an additional revenue channel, paving the way for increased employment and income opportunities for Filipinos.
But the livelihood opportunities are not just for the people who make and serve the food– opportunities also abound for those who deliver them.
“The rapid rise of online platforms such as foodpanda, and the rapid digitalization of big and small restaurants alike, went hand in hand. And alongside this was the huge boom of opportunities in the gig economy, particularly for freelance delivery partners, as we continue to count on our partnership with foodpanda logistics and its thousands of ‘Ka-panda’ delivery partners across the country to meet consumer demand,” Marogy notes. “Many of foodpanda logistics’ Ka-panda delivery partners come from other industries, looking for supplemental income, or are doing freelance work on multiple platforms, or breadwinners counting on foodpanda logistics for their bread and butter earnings. We are grateful to them for being our delivery heroes on the road.”
Helping the local economy thrive
As seen in many markets and industries, the expansion of businesses helps bolster the local consumer price index and generate tax revenues. The increased consumer spending creates ripples across the economy, benefitting other sectors and industries. This ultimately leads to greater revenue generation that translates to higher tax contributions from businesses and individuals.
Marogy says that the same goes for the restaurant industry. “As more restaurants embrace digital platforms for food delivery and online ordering, their customer base expands, resulting in higher food production needs.” He adds that this surge in demand necessitates increased manufacturing of food products and ingredients, and higher demand for fresh produce and raw materials to meet the restaurant industry’s evolving needs. “It creates a ripple effect, generating additional requirements for manufacturing and agricultural sectors.”
In the digital transformation era, the digital economy emerges as an important driver of the growth of the Philippines. With e-Commerce and online platforms at the forefront, this new paradigm assumes a crucial role in shaping the nation’s economic development. As the country fully embraces the digital revolution, ongoing support and expansion of online platforms become vital catalysts for progress and economic growth.
