The Philippines’ e-market is poised to reach $19 billion (P918 billion) by 2025, outsizing both Malaysia and Singapore, according to e-commerce aggregator iPrice Group’s State of eCommerce Report 2017.
“Our findings suggests that the Philippine market is primed for growth especially with its huge market potential. We believe that the Philippine market behavior is leaning towards digital especially with its growing mobile preference which is critical in Southeast Asia’s eCommerce being a mobile first economy,” said iPrice.
The Philippine e-market was valued at $1.2 million in 2017. iPrice forecast the market will grow 34 percent annually over the next 10 years.
The e-commerce analyst attributed the growth to the country’s rising internet penetration, number of Filipinos actively visiting/participating in eCommerce and making a purchase, the average spending of Filipinos online and the common payment methods used in the Philippine market.
“The rising middle class, high consumer spending and a young and vibrant, tech-savvy population is driving eCommerce forward by leaps and bounds. About 99.2 percent of the Philippine population is covered by a mobile cellular network with 44.3 percent using the internet and many yet to conduct a purchase online,” according to iPrice.
“More merchants are turning to online payment as a convenient buying method. Last year, Ant Financial snapped up a stake in telecoms operator Globe’s Mynt, which runs Gcash which is similar to Ma’s Alipay that allows people to add phone credit, pay bills, send money, make donations, and shop online,” it added.
In the second quarter of 2017, the Philippines surpassed Singapore in mobile traffic to rank third in Southeast Asia in terms of mobile traffic size. Indonesia is on top with 87 percent followed by Thailand with 79 percent in the same quarter. The Philippines had 76 percent, Singapore with 74 percent, Malaysia with 74 percent and Vietnam with 72 percent.
iPrice found that mobile traffic in the Philippines increases on average of 10 percent over the weekend with 80.5 percent of that coming from mobile devices. The highest week day mobile traffic peak is during Monday and Friday at 72 percent. On Saturday it’s 79 percent and Sunday, 82 percent.
Meanwhile, the Philippines conversion rate is the highest during, Wednesdays and Thursdays which is 7 percent higher than the average orders across the week.
Conversion rate is the percentage of website visits that turn into a product purchase.
The Philippines has the lowest conversion rates for mobile and desktop, but it has the second highest average basket size which is valued at $56 (P2,887) compared to Indonesia, Thailand, Singapore, Malaysia and Vietnam.
Basket value refers to the average total amount spent for every order made by customer over a defined period of time.
Filipinos are paying for more expensive shopping items on desktop than mobile by 6.8 percent. The average order of value (AOV) by desktop is $59 or P3,042.34 and $55 or P2,836.07 by mobile.
“Such purchasing trend is consistent in all SEA markets. Our data suggests that the average order value is consistently higher on desktop vs. mobile, recording an 8 percent to 20 percent in conversion rate ease by country,” iPrice said.
The most popular hour Filipinos shop online is at 3 p.m., which is 66 percent (166) higher than the total average orders (100), iPrice also found.
“Considering the average number of order of the local country as reference (100%), the number of orders is highest between 9am and 5pm, when people are traditionally at work or school, with the exception of Singaporeans, who seem to enjoy evening shopping peaking at 10pm,” it said.
The most common payment methods that Philippine eCommerce merchants provide are credit card at 95 percent, cash on delivery at 80 percent, bank transfer at 65 percent, offline POS at 20 percent and installment at 15 percent.
iPrice based its findings on data collected in the period July 2016 to June 2017 from the e-markets of Indonesia, Malaysia, Singapore, Thailand, Philippines and Vietnam. More than 1,000 eCommerce merchants across SEA, including all the biggest eCommerce names in the region such as Lazada, Shopee, JD.com and thousands of smaller ecommerce merchants, with less than $1 million in annual revenues were covered by the analysis.
Southeast Asia is now the world’s third largest region for internet users — with more people online than the entire U.S. population — and internet is having a bigger impact on the region than originally thought, according to a Google report.
Visitors to 1,300 merchants number 7 million monthly, a 250 percent growth in 2017 compared to the previous year.