Cross-border Shopping to Boost Ecommerce in the Philippines

In the midst of the Philippines’ digital-driven shift in the eCommerce industry, cross-border shopping has emerged as a significant trend, accounting for a substantial portion of the market. According to the Department of Trade and Industry (DTI), approximately 50% of eCommerce shoppers in the Philippines are actively engaged in cross-border shopping, contributing to 24% of the industry’s total sales.

During the recently concluded Philippine Global E-Commerce Summit 2023 held at the SMX Convention Center, Glenn Peñaranda, Trade Assistant Secretary, shed light on the potential of the country’s eCommerce market. Peñaranda emphasized that the Philippines has witnessed remarkable growth in the eCommerce sector, projecting an annual transactional increase of 15.8% from 2022 to 2025.

Peñaranda further highlighted that the Philippines stands as a powerhouse in the Information Technology-Business Process Management (IT-BPM) industry, which serves as a crucial driver of growth and innovation. The country’s workforce possesses exceptional skills, expertise, and an ability to negotiate and collaborate effectively with international counterparts, positioning the Philippines as the second-leading player in the industry.

The Philippines’ youthful population, with approximately 110 million individuals belonging to the younger generation and an average age of 25, has embraced digital technologies, enabling the rapid adoption and use of digital platforms for eCommerce.

Constantin Robertz, CEO, and Co-Founder of Locad, expressed optimism about the future of the Philippine eCommerce industry. He stated that despite the challenges posed by the pandemic, the sector continues to demonstrate resilience and growth. In the first quarter of 2023, the Philippines accounted for 11% of the combined regional Southeast Asia gross merchandise volume (GMV) across major platforms. It is predicted that the Philippine eCommerce goods GMV will reach $16 billion in 2023, reflecting a 15% year-on-year growth rate.

Nevertheless, the industry faces several challenges that need to be addressed. Logistics, market fit, competition, payment options, and the localization of these options, as well as export rules and tax policies, represent key obstacles to the sector’s continued expansion.

While the COVID-19 pandemic has significantly impacted people’s lives, it has also expedited digital transformation across individuals, businesses, and governments. This acceleration has served as a catalyst for the growth of the eCommerce industry in the Philippines, leading to an increased reliance on cross-border shopping and presenting an array of opportunities for businesses and consumers alike.

As the Philippine eCommerce market continues to flourish, the government, industry stakeholders, and businesses must collaborate to address the challenges and seize the opportunities presented by cross-border shopping, thereby further propelling the growth of the digital-driven economy in the country.