The Philippines is among the East Asian economies experiencing growth in e-commerce traffic amid its high population level as they should continue fostering the establishment and accessibility of online marketplaces to further drive the supply.
A report titled The Landscape of B2C E-Commerce Marketplaces in the Philippines published by the Economic and Social Commission for Asia and the Pacific (ESCAP) said that over the period 2019-2022, traffic on the 163 business-to-consumer (B2C) marketplaces has grown significantly, rising from 960 million visits to 1.7 billion visits.
Citing Statista, the report said the number of users in the e-commerce market is forecast to increase by 21.8 percent to reach 60.41 million users in 2027.
Based on authors’ calculations, the density of B2C marketplaces in the Philippines is particularly low with a total of 163 B2C marketplaces for a population of 115.6 million. This amid a low internet penetration rate of 56 percent and a moderate proportion of its population purchasing goods online (41 percent).
The report said the Philippines has a larger proportion of generic B2C marketplaces (62 percent) compared to specialized marketplaces (38 percent).
Among the 62 specialized marketplaces, 29 percent specialize in fashion, accessories, and shoes (capturing 18 percent of the traffic) and 29 percent in automotive parts (51.5 percent of the traffic). The traffic dynamics also show that consumer preferences lean towards groceries (23 percent of the traffic).
Another report, The landscape of B2C e-commerce marketplaces in East Asia, said that while internet penetration has a limited impact on e-commerce traffic growth, there appears to be a moderate relationship between a country’s information communications technology (ICT) skills score and the increase in marketplace traffic.
It thus underscored the need for countries to further develop digital infrastructure and enhance ICT skills and digital literacy to promote the establishment and accessibility of online marketplaces.
In a webinar, ESCAP digital trade expert Silvere Dernouh said possible areas of support include recruitment of high-level staff with IT skills, particularly to develop secure payment systems; organizing training sessions in business strategies adapted to e-commerce; and providing management with data analytics to adapt in real time to market evolutions.
Dernouh also cited the need to support the development of national marketplaces and enhance their competitiveness considering the increasing concentration of traffic towards a limited number of marketplaces.
This is by targeting the right type of marketplace, adoption of localization strategies to meet domestic preferences and improving product offering in underserved categories, he said.
For instance, the report said that in order to capture a share of the continuing increase in traffic, marketplaces should be advised on their positioning in sectors with potential (baby products; cars, motorbikes, and motor parts; electronics/IT and appliances; groceries) since their share of traffic captured is higher than their share of marketplaces.
“On the other hand, they should avoid sectors with strong competition (fashion, accessories, and shoes; home and living; beauty, health, and personal care), as their share of traffic is much lower than their share of marketplaces,” it added.
To achieve this, the report said governments should support the development of logistics capacities and supply chains for quality goods produced at the national level, and thus enable the consolidation of production sectors at that level to meet increasing demand.
Meanwhile, other East Asian economies that experienced an increase in marketplace traffic from 2019 to 2022 include Thailand, Malaysia, Indonesia, Vietnam, and Singapore.
