Republic of the Philippines

Bicol University
College of Business, Economics and Management
Daraga, Albay

What do you think is the future of Philippines in E-commerce?

The internet has a significant place in the lives of many Filipinos and it can’t be denied that Filipinos are
among the world’s most active and most participative online users. The Philippines being known as the social media
capital of the world has a big chances of bringing positive impact to E-commerce industry in the country. Thus, it
would be no surprise to see the booming e-commerce industry in the future.

These days, the E-commerce industry in the country is still on its infancy stage but we can’t veer away from
the fact that Philippines holds a promising future if it can leverage its strengths to establish a strong foundation for
this industry. The Covid-19 pandemic has also increased the demand for E-commerce in the country. As many are
scared of catching the virus, many have resorted to buying online. And as more shoppers go online, more retailers
and sellers have also brought their products to and strengthened their online presence. The better news is that most
of the MSMEs eventually adapted and shifted to online platforms. These are the store owners who were initially
affected and displaced at the start of the pandemic but now they are already thriving. This phenomenon accelerates
the demand for E-commerce and in fact most of the Filipinos find it more convenient for them. But does the increased
demand for E-commerce industry means that it will continue to boom in the future or will it decline if the pandemic
comes to an end? To answer this question, we need to weigh first the facts. What are the strengths and challenges
that Philippines may encounter in building the E-commerce industry in the country?

To start with, let me discuss the strengths. One thing that most Filipino is proud for is their adaptability to
change. Although Philippines is not first to develop or test newly invented devices, Filipinos are known to quickly
adapt to changes in technology once they have entered the country. The fast adaptability of Filipinos when it comes
to technologies is a welcoming fact for E-commerce industry in the country. Filipinos are quickly adapting to how
western products are marketed locally and online. Say for instance, Lazada, Ensogo, and Metrodeals, more and
more Filipinos are becoming inclined to E-commerce and with the market expanding; it is not surprising to see the
investors for online marketers flocking in the country. Second, as Filipinos are also known to be active users of social
media, E-commerce will have a good future in the country. As e-commerce and social media works hand-in-hand in
bringing business in a wider market. And as what we can observe, most of the small businesses increased their
online presence by actively interacting with their potential customers through the use of social media such as
Facebook, YouTube and Instagram. Filipinos are not only known as social media consumers but also they are an
active producer and syndicators of content which helps the business to increase brand awareness and generate
sales online. Furthermore, Philippines is also considered to be the fastest growing online population worldwide during
the last five years. This staggering growth in the country’s online users is a good sign for the country’s E-commerce
industry. With the fast growing of online population in the country, more Filipinos will be more aware and interested in
E-commerce and it could be a good invitation to invest in such venture.
 Indeed, there is a good reason to be optimistic about the E-commerce growth in the country. However, even
though the Philippines is developing so fast it is also a brutal fact that the country is being left in some technology
and management aspects. This is an implication that the country has more to do yet. There are a lot of challenges
that Philippines may encounter in developing E-commerce industry. First is the slow internet connection. Philippines
internet speeds are appalling. I can attest to that. The country has the slowest internet connection among other
Southeast Asian countries and perhaps this is the biggest pitfalls the country has. This seems to be a perennial
problem for the Philippines’ technology industry. Investors and other international entrepreneurs seem to overlook the
country as a good spot to develop E-commerce industry because of this issue. Furthermore, even fellow Filipinos are
annoyed by the internet speed which limits them to efficiently browse the web. Second is the lack of cooperation
between key players and government. In connection to the issue of internet speed, telecom companies and the
government keeps blaming each other. The government blames the telecom companies for prioritizing profit over
quality of products while telecom companies blame the government for red tape that hinders improvements of
infrastructures that can increase internet speed. In addition, there is also a security concerns when it comes to E-
commerce. The increase in online shopping and access to online bank transactions is increasing payment in the
Philippines. Sellers are turning to online payment as a convenient buying method. However, as the transaction
involves online payment, many are wary of this especially that there are numerous incidents of hacking, scams, and
weak cyber security efforts that still plague the country. And as a result, this problem may lead to decrease growth of
E-commerce in the country. Finally is the scarcity of talents. Although Filipino IT and online professionals are some of
the best in the field, they are forced to fly out of the country to seek better opportunities not only to earn but to also
harness their talents. With underdeveloped equipment and infrastructures and terrible internet, it is difficult for local
and foreign professionals to work and operate E-commerce business in the country.

As conclusion, with the Philippines slowly adapting to digital payments and new technologies we can clearly
see the slow and continuous growth of the E-commerce industry in the country. The ability to accept variety of ways
of payment options, including cash, will also help E-commerce industry in the Philippines to succeed. But the
problems all boil down in awful internet connection of the country. And there is no better way to solve different issues
that hamper E-commerce growth in the country than by improving internet or data service in the country. If the
government together with the telecom companies succeed to resolve this issue, then there is no doubt that the E-
commerce industry will continue to boom in the future.