Triple power The Economic Development Group, spearheaded by Department of Economy, Planning and Development Secretary Arsenio Balisacan, Special Assistant to the President for Investment and Economic Affairs Secretary Frederick Go and Finance Secretary Ralph Recto, holds its second meeting this year to discuss strategies to improve the economic and investment landscape. PHOTOGRAPH COURTESY OF DOF
BUSINESS

After pandemic boom, e-commerce waning?

Social commerce is gaining traction as a compelling alternative, seamlessly integrating entertainment and shopping.

James Indino

The Philippine e-commerce landscape has experienced a meteoric rise, with platforms like Lazada, Shopee and TikTok Shop becoming integral to the lives of Filipinos. The pandemic accelerated this shift, driven by convenience and attractive deals. However, the initial boom is giving way to a more complex reality, marked by emerging challenges.

Logistics stands out as a critical bottleneck. Despite substantial investments by major platforms in their fulfillment networks, the Philippines’ archipelago geography presents persistent delivery hurdles. Metro Manila’s notorious traffic congestion hinders same-day delivery aspirations, while provincial buyers face extended wait times and high shipping costs. While platforms have launched their own logistics arms (Shopee Xpress, Lazada Logistics, etc.), last-mile delivery remains a significant obstacle.

Hyperlocal e-commerce, with businesses strategically locating inventory closer to demand centers, offers a potential solution by reducing transit times. The increasing collaborations between e-commerce platforms and third-party logistics providers suggest an ongoing industry adjustment, prioritizing efficient and fast delivery over sheer sales volume.

Consumer fatigue surfaces

Beyond logistics, consumer fatigue is also emerging. The era of relentless discounts and promotions, while initially appealing, proved unsustainable. Platforms now face pressure to achieve profitability, leading to increased advertising costs and marketplace fees for sellers, prompting some to reconsider their participation. Simultaneously, consumers are growing weary of constant promotional bombardments, seeking value beyond just low prices. This shift is pushing the e-commerce battleground towards differentiation rather than mere discounts.

Social commerce is gaining traction as a compelling alternative, seamlessly integrating entertainment and shopping. TikTok Shop’s success highlights the consumer desire for engagement. Livestream shopping and influencer-led reviews are proving more effective than traditional static listings. The future of e-commerce appears to be leaning towards connection over mere transactions, with brands recognizing engagement as a key asset.