The Philippine e-commerce market is expected to hit P2.2 trillion by 2028 as more consumers make purchases online and more brands enter the space, according to data and analytics company GlobalData.

Shivani Gupta, senior banking and payments analyst at GlobalData, said the Philippine e-commerce market is anticipated to post a compound annual growth rate (CAGR) of 13.2 percent between 2024 and 2028 to reach P2.2 trillion or $39.5 billion in 2028.

'The uptrend in e-commerce sales is likely to continue over the next few years, supported by the evolving consumer preferences, government initiatives, rise in social commerce and the entry of new e-commerce companies,' Gupta said.

For this year, GlobalData said the country's e-commerce market, which has been growing at a fast pace, is expected to expand by nearly 20 percent to P1.3 trillion ($24.1 billion) from P1.1 trillion ($20.1 billion) last year.

From 2019 to 2023, the Philippine e-commerce market registered a 28.6-percent CAGR.

'The Philippines' e-commerce market is growing at fast pace supported by a large young population, increasing confidence in online payments, improving logistics and the availability of secure alternative payment solutions in the country. Online shopping festivals such as Black Friday, Cyber Monday and Single's Day have also contributed to the overall growth,' Gupta said.

The growth has also been supported by the government's initiatives to boost e-commerce sales including the Department of Trade and Industry's partnership with e-commerce and logistics provider SOMAGO, which involves encouraging small and medium enterprises to set up their business online and sell their products via the SOMAGO platform.

More companies are also venturing into e-commerce to take advantage of opportunities.

Last year, Chinese e-commerce platform Temu launched operations in the Philippines to compete with companies like Lazada and Shopee.

GlobalData said social media is also serving as an e-commerce selling platform to enhance customer engagement and sales.

When it comes to payment methods, GlobalData said its financial services consumer survey carried out in the second quarter of last year showed alternative payments solutions are leading the e-commerce space with its combined market share of 36.4 percent in 2023.

GlobalData said mobile wallets such as Gcash and Maya are popular alternative payment tools for shoppers due to their simplicity, as well as the speed and convenience they offer.

Payment cards are the second most preferred payment method, with debit, credit and charge and prepaid cards collectively accounting for a 28.2 percent share in 2023.

'This can be attributed to the value-added benefits offered on payment cards, including interest free installment payments, reward programs, cashback and discounts,' Gupta said.

While electronic payments are increasing, over 23 percent of e-commerce purchases in the country are still made using cash.

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