Discover Philippines’ Ecommerce Industry

If you are someone who has not heard of the term Ecommerce then it’s best to come out of the rock that you are under. E-commerce has been gaining so much ground at a really fast pace in the Philippines. In fact, Ecommerce is considered as a great equalizer for small and medium enterprises to enter the global market. Here in the Philippines, we have the fastest growing internet population which translates to more people purchasing goods and services online.

But what exactly is Ecommerce here in the Philippines and where is it headed? Here are some important data for you to start your journey in the discovery of Ecommerce in the Philippines.

1. Trend and Statistics

According to the Philippine E-Commerce Roadmap 2016-2020 –

At US$1.15 billion in 2013, the e-commerce industry is projected to increase at a compound annual growth rate of 101.4% during 2013 to 2018. The B2C e-commerce market is projected to grow at 107.4% during the same period. The Philippines, considering its sizeable youth population and a slightly smaller population in the working-age range, is thus well-placed to see an increase in online retail in the near future.

In a study conducted by VISA, 9 out of 10 Filipino consumers go online to shop at least once a month. As in other Asian countries, Filipinos still prefer going to malls as it has become a part of their culture.

The roadmap ensures that there is support from the government in terms of infrastructure, policies and laws for the growth of e-commerce in our country. Its primary focus is to address and resolve present challenges identified – Infrastructure, Innovation, Investment, Information flow, Intellectual Capital and Integration. With this roadmap, it is expected that e-commerce will contribute 25% to the country’s GDP by 2020. It also aims to increase the number of MSMEs doing e-commerce, establish a fast and competitive internet access, cyber crime governance and a connected government.

In an article published by Rappler on May 2016, they provided information about the e-commerce landscape in the Philippines. The infographic is quite useful if you are planning to go into e-commerce business. In the said article, it shows that most e-commerce users are female, with age between 25-34 that are middle income earners and by 2020, e-commerce users are expected to rise to 46.1 million. That said, more and more merchants are turning into e-commerce to sell their products. Entrepreneurs and businesses alike should take advantage of this potential growth in online selling.

E-commerce is turning out to be a huge industry here in the Philippines, with big companies like Lazada and Zalora leading the front. For small and medium enterprises, online selling has become a great entry point for starting a business. Not only does it cost less to have an online store instead of a normal brick-and-mortar shop, it also provides more reach of customers both local and international. For the users, online shopping offers convenience, better deals and wide array of payment options.

2. Ecommerce Law in the Philippines

On June 14, 2000, President Joseph Estrada signed into law RA 8792 –

“AN ACT PROVIDING FOR THE RECOGNITION AND USE OF ELECTRONIC COMMERCIAL AND NON -COMMERCIAL TRANSACTIONS AND DOCUMENTS, PENALTIES FOR UNLAWFUL USE THEREOF AND FOR OTHER PURPOSES” which is more commonly known as the Electronic Commerce Act of 2000.

Electronic commerce refers to the local and international dealings, transactions arrangements, agreements, contracts and exchanges and storage of information through the utilization of electronic, optical and similar medium, mode, instrumentality and technology to recognize the authenticity and reliability of electronic documents related to such activities and to promote the universal use of electronic transaction in the government and general public (Section 3).

This law is intended to facilitate the use of electronic contracts and agreements, domestically and internationally. It’s not only for commercial transactions between and among private persons but also covers the government in its dealings with the public. In terms of coverage, this law is to apply to any kind of electronic data message or electronic document used in commercial and non-commercial activities (Section 4).

Below are some of the provisions of this law:

1. It legally recognizes data messages, electronic documents and electronic signatures. This means that all the three items function the same way as your paper documents. They are considered as legal and valid documents which can be used in the court of law (if needed).
2. That said, the law also provides guidelines on the data retention for such electronic data.
3. The law was also designed to apply to contracts related to carriage of goods which includes airway bills, bills of landing or any other paper documents related to transporting goods via air, land or sea to be done electronically.
4. The law has also made electronic transactions made thru banks’ networks or other similar channels consummated once the money is dispensed or has changed hands (or in this case, bank accounts).
5. It also made provision for the government to have the capability to transact electronically and that the Department of Trade and Industry as the country’s e-commerce authority.
6. Also as important, this law has laid the penalties related to crimes such as hacking, cracking and data piracy offenses from a minimum fine of Php100,000.
7. Since e-commerce is mainly exchange of goods, existing laws such as Consumer Act of the Philippines also applies.

In today’s environment where most dealings are already done electronically – thru the internet or other similar networks – one should be aware of how the ecommerce law impacts such transactions. The goal of such law is to ensure that electronic transactions are safe and information gathered are kept private and confidential. It also emphasizes on the penalties to be imposed for cases of fraud or hacking to prevent misuse or abuse.

The real benefit of electronic commerce is experienced not only when we are able to electronically transact among ourselves. Its real benefits is when Filipinos outside the country are able to buy goods from the Philippines and when we from the Philippines are able to sell our goods internationally as easily. And just as important, e-commerce opens up a lot of business opportunities for entrepreneurs looking to have their products or services available thru this network.

It is important to note that Ecommerce is covered by existing tax regulations as per Revenue Memorandum Circular No. 55-2013. Ecommerce businesses should be registered at the Revenue District Office and that they should issue an invoice or a receipt/OR for each transaction made, file and pay the necessary taxes.

3. Top Ecommerce Websites

Though there are already several Ecommerce websites, the industry is still largely dominated by one player which Lazada Philippines. Lazada is owned by Chinese Ecommerce giant Alibaba and has presence in other countries like Singapore, Malaysia and Indonesia. It is basically an online department store and marketplace for retailers to sell their products. It has an estimated 46M site visitors monthly (data as of May 2017).

Next on the list is Metrodeal which has an estimated monthly website traffic of about 3M. This website specializes in coupons and deals gathering promotions from different establishments.

Third is Shopee Philippines, having an estimated monthly traffic of about 2.6M. They are primarily an online mobile shop though they do offer a good web experience as well.

Other websites that are performing well in the Ecommerce industry are:

Zalora Philippines – an online shopping website with an estimated monthly traffic of 2.2M

eBay Philippines – local website for the biggest American ecommerce giant with estimated monthly traffic of 1.75M

Globe Online Shop – an online site for mobile devices, gadgets and other electronic products. Estimated monthly traffic is 970,000

Goods.ph – another online department store which focuses on affordable products. Estimated monthly traffic is 384,000

Also in the top list are Villman Computers, CDR King and Galleon.ph.

4. Payment Gateways

Doing transactions online that involve payment and exchange of money is not something that most Filipinos are already comfortable with. What with the challenge of having secure connection that will assure them that their money is safe. Good thing is that there are established and secure payment gateways that ensures payments and monetary transactions are safe. Here are a few of them:

Visa and Mastercard – these are international global payments technology that is known worldwide and accepts most of the major credit and debit cards. They have a very secure payment gateway which even sometimes require OTPs (One-Time Passwords) or other form of security verification. They are the most widely used payment gateway in the world.

Paypal – this is also one of the most well-known payment gateways used in Ecommerce sites. Paypal is secure and reliable and widely used both by merchants and customers. Paypal accounts can be tied to your credit card or debit card and is able to accept different currencies worldwide.

Alipay – formerly known as helloPay, it is the most popular online payment tool in China. They are the online payment tool of the Lazada group and they offer fast, convenient and secure online payments for customers and merchants.

Peso Pay – one of the leading secure payment processing solutions in the Philippines. They allow merchants to accept a wide variety of payment methods – Paypal, credit cards, debit cards, as well as over-the-counter payments and even from pawnshops! Talk about flexibility and convenience!

Dragon Pay – another option for secure payment processing in the Philippines. It allows Ecommerce websites to pay using the bank’s online banking websites but also gives the flexibility of payment for those who do not have credit cards or paypal accounts.

2Checkout– is another global payment platform that accepts mobile and online payments worldwide but with payments catered to your local currency.

Smart Money – is basically a mobile wallet that allows you send and receive remittances, can be used for online bill payments and other online payment transactions.

Globe Cash – another mobile wallet provider which also provides a platform for remittances and online payments

Other online payment gateway available are MLhuillier which accepts payment online and also on their branches nationwide, ECPay, 7-Connect, Coins PH and Asia Pay.

5. Courier Services

Another component in this industry is the courier services. Ecommerce merchants need to have the means to deliver the products to their buyers. A reliable courier service is a must to ensure a good customer experience. Here are a few of the leading courier services available in the Philippines:

FedEx – they are the world’s largest international express transportation company. They provide fast and reliable delivery to more than 220 countries

International Services & Solutions

As one of the world’s largest express transportation company, FedEx offers a wide range of shipping services to more than 220 countries and territories.
Prioritize between speed of delivery and value for money or customize your shipments to suit your specific business needs. You can count on us to deliver on time.

Reference Link: http://www.fedex.com/ph/services/
Reference Link (Calculator): https://www.fedex.com/ratefinder/home?cc=ph&language=en

JRS Express – one of the leading courier services here in the Philippines. They offer next-day delivery anywhere in the country

International Shipping

Small Parcel International Service – minimum charge for the 1st 500 grams. Additional charge for succeeding 500 grams.  Documents International Service – minimum charge for the 1st 500 grams. Additional charge for succeeding 500 grams.

Reference Link (Calculator): http://www.jrs-express.com/Home/Rates?Length=4

Fast Track Courier Services – they offer one of the lowest rates for courier services. One of their advantages is that they do door-to-door pick-up and delivery of packages.

International Shipping

For international shipping email c.s@fastrack.ph. There’s no other information or rates for international shipping posted on their website other than the one that can be found on the FAQ

Reference Link: http://www.fastrack.ph/faq/index.php

2Go Express – they are a cargo airline that offers bulk cargo and express parcel services throughout the Philippines.

International  Shipping

• 2GO Express International – Send your cargo to over 250 countries covered by the 2GO Express International Service. 2GO express has partnered with the world’s top providers to enable us to bring you world class international logistics solutions.
• FedEx Services – 2GO Express is the sole retail partner for FedEx in the Philippines. Visit our FedEx Accredited Ship Centers to avail of any of the FedEx services. For a complete list of FedEx Accredited outlets, please contact our hotline at 77-99-222 or click on the Branch Locator Tool.

International Budget Box

Our International Budget Box products are used for international parcel shipments to over 250 countries. This products comes in two weight capacities:

1 Kilo International BudgetBox weight limit one (1) kilo
2 Kilo International BudgetBox weight limit two (2) kilos \

Our International BudgetBox products are available when you book through our hotline number 77-99-222 or when you visit the nearest 2GO Express outlet. For complete list of outlets please click on the Branch Locator Tool.

Reference Link: https://express.2go.com.ph/products-and-services.asp
Reference Link (Calculator): https://supplychain.2go.com.ph/CustomerSupport/tools/quote_int.asp

Abest Express – has been in the courier business for more than 24 years. They have branches in different locations and they also do pick-up at your convenience.

International Shipping

Only accepts DOCUMENTS as of the moment, non-documents are not allowed. All international documents are subject to inspection.

Reference Link: http://abestexpress.com/international-rates/

DHL Philippines – is also an international courier company that transports urgent documents and goods.

International Shipping

Export Services – International Express Delivery – Express services to another country with DHL’s versatile and reliable delivery options: from emergency same day, through guaranteed time-critical next day, to less urgent day certain options.

Reference Link: http://www.dhl.com.ph/en/express/export_services.html
Reference Link (Calculator): https://www.mydhl.dhl.com/mydhl/appmanager/..

Air21 – they are the answer to your logistical needs. They have door-to-door services, crating services, cargo and even warehousing service.

LBC Express – is probably the most well-known courier service here in Manila. Although they have relatively high rates, it is compensated by the fact that there is an LBC branch anywhere you go. For places not covered by their door-to-door delivery service, one can opt to send a package to the nearest LBC branch for pick-up.

International Sending

Our international Padamas are the secure choice for sending documents and parcels to your loved ones abroad. With over 250 country destinations worldwide, you can choose between X Pack and X Pouch sizes when you want to send loved ones abroad their passports, gadgets, documents, and photos.

Available sizes:

• X Pack (for non-documents) 19 x 13.75 inches
• X Pouch (for documents) 17 x 10.5 inches

Reference Link: http://www.lbcexpress.com/category/lbc-express/documents-and-mail#internationalsending

Xend Business Solutions – also one of the more affordable shipping service in the country. They have door-to-door services and drop-off points (including 7-11 stores) where you can easily leave your package for shipping.

International Shipping

• International Express – 1 to 3 Business Days
  The International Express option is coursed through UPS. It is a date certain service that takes 1 to 3 days to more than 160 countries and territories worldwide.
• Express Mail Service (EMS) – 3 to 7 Business Days
  The Express Mail Service (EMS) option is coursed through the Singapore Post postal system or Philpost. The average transit time is 3 to 7 business days.
• Premium Registered Mail (Postal) – 7 to 15 Business Days
  The Premium Registered Mail (Postal) options is an accelerated airmail service that is coursed through the Singapore Post postal system or Philpost. Unlike regular registered mail, this service offers detailed online tracking from pick-up to delivery in 88 countries so you know where your package is every step of the way.

Reference Link (Calculator): http://new.xend.com.ph/rates/

Lalamove – they operate 24/7 and specialize in on-demand, same-day delivery service. They have a quite a unique business model from the traditional courier services.

Lite Express – one of Asia’s leading courier services. They guarantee fast, reliable and secure delivery of your documents and packages.

Other courier services worth mentioning are Metrowide Courier Express, Air Speed Phils, Sonic Express, Zoom Courier, Cliqnship, Checkmeout, Ninja Van, AP Cargo and a whole lot more.

E-commerce has definitely changed the way business is being done all over the world. For the entrepreneurs, it has given them a wider reach of customers at a lesser cost. For the normal consumer, it is slowly becoming a part of their lifestyle – doing online purchase, hotel bookings, flight bookings and other services. Growth, massive growth in fact, is expected to happen for the e-commerce industry in the Philippines. If you don’t have an online shop yet, don’t get left behind, talk with a credible ecommerce develoment company now, and start selling online.