Impact Numbers on E-Commerce in the Philippines 2023
The Philippines has experienced substantial growth in electronic business, accompanied by a rapidly expanding internet user base. With the country’s robust economic performance, as indicated by a 5.9% GDP growth in the third quarter of 2023, the country had the highest growth among major Asian economies (Department of Finance, 2023). This economic upswing reflects the positive impact of electronic business on the nation’s overall economic landscape.
Smartphone Penetration and Industry Acceleration
On top of this, thriving e-commerce in the Philippines is fueled by a surge in smartphone penetration and the younger generation’s inclination towards online shopping. With quantitative support, the country stands as the 28th largest e-commerce market, anticipating a revenue of US$12,273.7 million by 2023, surpassing Saudi Arabia, and projecting a market volume of US$15,835.4 million by 2027, showcasing a compound annual growth rate of 6.6% (EcommerceDB, 2023). In tandem, smartphone penetration in the Philippines stands at 60.7%, with 67.37 million users out of a population of 111.05 million (Newzoo, n.d.), emphasizing the pivotal role of smartphones in driving the flourishing e-commerce landscape.
Moreover, the COVID-19 pandemic has significantly accelerated the adoption of online platforms for businesses in the Philippines, with a notable impact on the electronic business sector. According to data from 2021, the Philippines’ eCommerce market achieved $17 billion in sales, driven by 73 million online active users, and is projected to reach $24 billion with a 17% growth rate through 2025 (International Trade Administration, 2022). The surge in demand for eCommerce during the pandemic, attributed to Filipinos working and studying from home, has propelled the sector forward.
Digital Infrastructure
The current digital infrastructure in the Philippines encompasses key components such as internet speed, connectivity, and coverage. As of 2023, the 4G network coverage is estimated at 98.25%, with an average broadband connection speed of 44.40 kbit/s, and the 3G network coverage at 99.61% (Statista, 2023). Notably, Aboitiz InfraCapital (AIC) plays a pivotal role in the country’s digital infrastructure development, collaborating with government and telecommunications providers. AIC’s initiatives, including the deployment of common towers and the construction of small cell sites, aim to enhance mobile network service reliability, reduce communication costs, foster connectivity, and address the digital divide, particularly in underserved regions (Aboitiz InfraCapital, n.d.). Below are some images of Aboitiz’s projects to advance digital infrastructure and connectivity in the country.
With the Philippines poised for increased digital infrastructure investments, AIC’s diversification into the data center business reflects strategic foresight in meeting rising demands for data services in the coming years, which means that e-commerce will continue to see good prospects here in the country amid light headwinds in technological innovation due to high smartphone penetration, high influx of investments, along with other good economic indicators.
Justin is currently a 5th year BS Management student at the Ateneo de Manila University, with minors in Financial Economics and Sustainability.
References:
Aboitiz InfraCapital. (n.d.). Digital Infrastructure. Retrieved from https://aboitizinfracapital.com/digital-infrastructure/
Department of Finance. (2023, September 11). PH economy posts higher 5.9% GDP growth in Q3 2023, strongest among major Asian economies. Retrieved from https://www.dof.gov.ph/ph-economy-posts-higher-5-9-gdp-growth-in-q3-2023-strongest-among-major-asian-economies/#:~:text=09%2F11%2F23-,PH%20economy%20posts%20higher%205.9%25%20GDP%20growth%20in%20Q3%202023,among%20major%20economies%20in%20Asia
EcommerceDB. (2023). Philippines E-Commerce Market Report 2023. Retrieved from https://ecommercedb.com/markets/ph/all#:~:text=The%20Philippines%20is%20the%2028th,US%2415%2C835.4%20million%20by%202027.
Newzoo. (2023). Global Smartphone Penetration. Retrieved from https://newzoo.com/resources?type=rankings
Statista. (2023). Digital Infrastructure in the Philippines — Statistics & Facts. Retrieved from https://www.statista.com/outlook/co/digital-connectivity-indicators/digital-infrastructure/philippines#:~:text=The%204G%20network%20coverage%20in,to%20amount%2099.61%25%20in%202023.
