ASEAN Market Series: How to Enter the Philippine E-Commerce Market 🇵🇭

With the fast-developing e-commerce industry and rising wealth of the country’s middle class, the Philippine market provides a prime opportunity for e-commerce expansion.

E-commerce revenue in the Philippines is growing at an impressive rate, with industry analysts expecting to see a CAGR annual growth rate of 12.93% between 2023 and 2027. 

For those who are thinking about entering the Philippine market, or who already operate in the Philippines and just want to learn more, we have you covered.

As a Hong Kong-based logistics provider, we have been working in the region for over a decade now, and we’ve picked up some tips along the way. Here are some pointers for those who aren’t familiar with the region, from a logistics company that has seen it all.

 In this article, we will be running through:

• Filippino online shopping trends and preferences
• The logistics infrastructure of the nation
• Opportunities and challenges to watch out for

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Philippine e-commerce trends and preferences

Doing business in one market is hard enough, let alone multiple — particularly if it's geographically far from your home base. 

If you are a foreign company thinking about entering the Philippines, you have to start out with the basics.

How do Filipinos like to shop?

The three most popular platforms are Shopee, Lazada, and Amazon. Online shopping in the Philippines is very marketplace-driven, so if you are entering the market, you should sell on at least one of these.

Live shopping is also quite popular, which involves sellers streaming live videos where they talk about or use the products for sale. 52% of Filipinos say that live shopping brings in more customers than posting on marketplaces and apps.

Social media is also very important for shopping, particularly since many of the socials now offer live selling services. Facebook, TikTok, Instagram, and other social platforms all have their own in-app livestream shopping platforms. 

Filipinos spend on average 10 hours a day on social media. Recently, TikTok has pulled ahead as the most popular social media platform for shopping.

Successful marketing campaigns in the Philippine market need to include live streaming and social media. Luckily, it doesn’t cost very much to livestream-market on social media or on a shopping platform like Lazada. Plus, learning how to do live selling well will allow you to connect with your buyers directly and build trust.

What are Filipinos buying online?

The most popular types of products bought online in the country are fashion and apparel at 65%, beauty at 47%, food and beverages at 35%, and consumer electronics at 34%.

Entering the online shopping sphere of the Philippines can seem tricky when you see that social media marketing is overrun with well-known local brands. However, many foreign products and product types, from beauty products to apparel, actually do better than local brands. 

Foreign players make up a larger share of online sales activity. International products from brands like Uniqlo and H&M, which offer a mix of quality and affordability, are preferred by many Filipinos.

That preference is defined by a perception of quality. That means that if you are looking to enter the Filipino market, you should position yourself as a high-end/high-quality brand.

Logistics in the Philippines

In order to successfully deliver parcels in the Philippines, there are a couple of things about local logistics you should understand. 

Logistics is fragmented

The literally fragmented geography of the archipelago nation adds an extra layer of complexity to last-mile delivery. That means that most items will need to be transported by boat from island to island until they reach their port of destination.

Once they reach the port, road transport is used to get items to their final destination. This last-mile transportation is typically done by small, local carriers.

RELATED: 4 Things to Know When Shipping From the Philippines to the US

Some logistics technologies aren’t widely used

There are a couple of areas when it comes to technology that Philippine logistics lag behind. The big issue is that there are not a ton of options for SAAS software integrations in the nation. If they are there, there is not enough knowledge of them or desire to use them.

This means that many carriers and fulfillment providers rely on outdated systems to keep track of orders and inventory. 

Another issue is the preference for the cash-on-delivery method, where e-commerce shoppers opt to pay only after they’ve received their purchase. Factors like a lack of trust in online payment methods and a desire to see the product in person before paying make this the preferred payment method for a majority of Filipino e-shoppers. 

The cash-on-delivery method can be difficult for efficient e-commerce logistics, seeing as the last-mile courier also has to function as the party accepting payment. However, giving customers the option to use COD is one of the best ways to accommodate local preferences and build your brand in the Philippines. 

In order to accommodate local preferences, you’ll want to do a little research to find a trusted local COD courier service.

Team up with a logistics provider that specializes in scaling businesses — and has over a decade of experience in Southeast Asia

Entering a foreign market is intimidating … without the right logistics partner to support you. At CBIP, we have over ten years of experience helping e-commerce retailers expand to new markets, all over the world.

As a Hong Kong-based logistics company, we are very experienced in working with logistics throughout Southeast Asia. We know that finding the right logistics provider in the Philippines can be tough for foreign businesses who aren’t familiar with the area. 

Luckily, that is exactly where CBIP shines: As a 4PL, we don’t own our own warehouses and trucks. Rather, we have an extensive network of logistics partners working in the region where you need them. 

We connect you with the providers you need, connect all of their systems to you, and help you with all the big and small details all along the way.

If you are looking to expand your business into the Philippines this year but don’t know where to start, get in contact with us today for a free logistics assessment.