Tuesday, March 5, 2024

Covid-19 forces PH online economy to catch up to SE Asia peers

A new report from iPrice Group, in collaboration with App Annie and SimilarWeb, has revealed that the Philippine e-commerce industry is experiencing a major shift as Filipinos turn to online shopping due to the Covid-19 pandemic.

After comparing Q2 2020 with Q1 2020, data showed that the Philippines experienced the highest increase in the usage of shopping apps (53%) in Southeast Asia. The total sessions in shopping apps in the country reached 4.9 billion, the report said.

The iPrice report noted the Philippines is now catching up with its Southeast Asian peers in terms of digital adaptations, especially since e-commerce and digital services were not as accessible in the country.

Although the report said that brick-and-mortar stores are still deemed to be more profitable, the country’s strict lockdown measures have forced the country’s economy to adapt. This can also be seen in data from Statista, which shows that 44% of Filipinos aged 35-44 purchased more online during Covid-19.

Moreover, iPrice’s previous study earlier this year also revealed that Filipinos were looking up WiFi adapters 590% more as they gear up to spend more of their time online. Though the Philippines may not be as savvy with e-commerce as its other Southeast Asian peers like Indonesia or Singapore, its gradual adaptation is still pretty evident, the report said.

Overall, Southeast Asians are spending more money online this year, comparing the first half of 2020 with the first half of 2019. The average basket size (amount added to an online cart) immensely increased in each country, but notably, the Philippines had the highest increase in basket size (57%) compared to its neighbors. In iPrice’s platform alone, Filipinos now spend about P1,311 per month on average.

iPrice also analyzed Web traffic data from SimilarWeb, which shed light on sites that are thriving or failing, product categories that are gaining demand, and how e-commerce players are adapting to the unexpected pandemic.

In the Philippines, the Web traffic of fashion sites collectively decreased by 30% compared to last year’s, while electronics sites increased by a glaring 59%. This proves Filipinos’ increased demand for gadgets during social distancing, the report said.

Compared to other Southeast Asian countries, the Philippines had the highest Web traffic increase in electronics sites. In fact, e-sites in other countries (except Singapore) even experienced a decrease in Web traffic, it said.

With the unexpected virus reshaping these consumer trends, e-commerce players switched up their 2020 promotional strategies to adapt to the situation. E-commerce giants like Lazada PH and Shopee PH had bountiful free-shipping promos across the year. They added a number of promos on essential goods too. Meanwhile, local player Beauty MNL offered numerous discounts/promos on vitamins and supplements.

“With the rising trend of online shopping in the country, the Philippines’ Internet economy may just be getting the push it needs. The Philippines is known to survive with cash-based transactions and brick-and-mortar stores, but perhaps its inevitable adaptation to Covid-19 will allow the country’s digital world to catch up to its more developed Southeast Asian neighbors. E-commerce players then now have a responsibility to keep encouraging this rising trend, while emerging local merchants are now presented with more potential opportunities,” it said.


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