Overview of the Philippines E-commerce Industry
Recognized as the fastest-growing digital economy in Southeast Asia[1], the Philippines e-commerce market is surging ahead. With projected revenues hitting $16.75 billion in 2025 and a strong 10.05% annual growth rate (CAGR 2025-2029), the market is on track to reach a substantial $24.57 billion by 2029[2]. This dynamic growth presents a massive opportunity for businesses ready to tap into this expanding digital market. However, navigating this fragmented and evolving landscape requires staying ahead of the curve.
This comprehensive guide equips you with the essential knowledge on the latest trends, key online selling platforms in the Philippines, strategic partnerships, and actionable insights to thrive in the Philippines’ e-commerce space.
Key Trends in Philippines’ Online Retail Market
Adaptation is key to survival in the Filipino e-commerce market. In this section, we will dive into the ever-evolving world of Philippine e-commerce. From the unstoppable surge of social media commerce to the seamless integration of online and offline sales, we’ve covered all of the top trends to equip you with the knowledge you need.
a. Live-selling continues to dominate
Driven by Filipinos’ extensive social media engagement, a significant 74% of local businesses recognize live selling as a key strategy for attracting new customers and boosting online sales[3].
While platforms like Facebook and YouTube have large user bases, TikTok Shop has solidified its position as a leading social commerce platform, offering a seamless way for businesses to connect with and sell directly to millions of users. Live selling on these platforms also continues its strong trajectory, proving to be a highly effective sales and customer acquisition strategy.
“The use of TikTok is rising quickly in the Philippines. A few months ago, after launching their business on TikTok shop, some of our clients in the region received 4,000+ orders from the platform on top of their combined 6,000 orders from Shopee and Lazada,” says Abhinandan Arkade, Senior Director of Product Management, Anchanto.
b. The evolution of omnichannel experiences
The integration of online and offline retail through omnichannel strategies is becoming increasingly sophisticated. Click-and-collect options are now widely adopted by major retailers across various sectors, catering to consumer demand for both online convenience and in-person pickup.
This trend reflects the ongoing evolution of how Filipinos shop, blending digital browsing with physical collection. Even SM Markets, a leading mall and supermarket chain in the Philippines, offers “Click & Collect,” allowing customers to purchase groceries online and pick them up at their preferred branch, showcasing the widespread adoption of this omnichannel approach.
c. E-commerce remains marketplace-centric
Online marketplaces continue to be the primary destinations for online shoppers in the Philippines. Between February and April 2024, Shopee held the largest share of e-commerce traffic at 51%, followed by Lazada with 24%[4]. This highlights the critical need for businesses to establish a strong presence on these dominant platforms to reach a broad consumer base.
“Consumers in the Philippines also love e-commerce sales and comparing prices across different online marketplaces to find the best offers. This reinforces the need for brands to strengthen their presence on multiple channels and invest in unifying sales channels to bring coherence to the omnichannel experience,” says Abhinandan Arkade, Senior Director of Product Management, Anchanto.
“Consumers in the Philippines also love e-commerce sales and comparing prices across different online marketplaces to find the best offers. This reinforces the need for brands to strengthen their presence on multiple channels and invest in unifying sales channels to bring coherency to the omnichannel experience,” says Abhinandan Arkade, Senior Director of Product Management, Anchanto.
d. Heightened expectations from e-commerce enablers
Brands are increasingly seeking e-commerce enablers who act as extensions of their own teams, offering strategic guidance and comprehensive solutions beyond basic online storefront management. This includes a demand for enablers to invest in advanced technology that provides flexibility, visibility, and end-to-end capabilities, potentially encompassing fulfillment and last-mile logistics support.
“Many retail businesses are diverging into last-mile delivery and now fulfillment services too. To do this, they are acquiring warehouses to offer end-to-end fulfillment services. But, they need to be mindful of how they can make these services worth the money they’ve invested. Technology can provide them with the support they need,” suggests Abhinandan Arkade, Senior Director of Product Management, Anchanto.
e. Fashion and cosmetics sectors showing strong growth
The fashion and cosmetics industries are experiencing significant growth in the Philippines’ e-commerce market. The pandemic accelerated the shift towards online purchasing in these sectors, and major corporations, alongside new domestic brands, are actively expanding their online presence. This trend is fueled by rising disposable incomes and increasingly diverse consumer demands in these categories[5].
f. Connectivity and digital payments driving the market
Increased internet penetration, particularly with the ongoing rollout of advanced networks like 5G by telecommunications providers such as Globe Telecom, is a significant driver for e-commerce growth. Plus, the Philippines’ leadership in digital payments, with popular platforms like GCash, Maya, and the newly launched Higala (IIPS), facilitates online transactions and builds consumer confidence. The high adoption of mobile internet and the prevalence of mobile-friendly e-commerce platforms in the Philippines further fuel this trend[6].
Top E-commerce Marketplaces in the Philippines
As e-commerce in the Philippines has become increasingly popular in recent years, more and more consumers are turning to online marketplaces to buy and sell products. Here are some of the top marketplaces in the country and the unique features that make them attractive options for both buyers and sellers in the Philippine e-commerce market:
- Lazada: Lazada is one of the largest marketplaces across Southeast Asia with over 50 million active users. It is backed by Alibaba’s best-in-class technology infrastructure and serves 560 million consumers across the SEA region[12].
- Shopee: Shopee is a leading platform that offers user-friendly, secure, and swift online shopping, backed by robust payment and fulfillment systems. In 2024, it achieved global net sales of $93.5 million[8]. The primary visitor demographic in the Philippines now spans 25 to 34 year olds across both desktop and mobile devices[9].
- Temu: Temu first debuted in the Philippines in late 2023[10], quickly rising in popularity by offering a wide range of products at competitive prices. Its business model focuses on direct sourcing, eliminating intermediaries.
- TikTok Shop: Another new player, TikTok Shop, has rapidly grown in the Philippines’ e-commerce space. Leveraging their short-video format and live-streaming capabilities, it offers a unique shopping experience. Filipinos are increasingly purchasing fashion and beauty items on the platform[11], with revenue projected to reach $142.64 million by 2029[12].
- Zalora: Zalora is one of the largest marketplaces across Southeast Asia with over 50 million active users. Its top product categories include fashion and beauty, sports, fitness, and more.
Top Last-Mile Carriers in the Philippines E-commerce Industry
When it comes to delivering goods to customers, last-mile carriers play a critical role. In the Philippines, there are several such companies that provide reliable and cost-effective logistics solutions. In this section, we will see some of the top last-mile carriers operating in the Philippines:
- J&T Express: J&T is a leading express delivery service backed by powerful technology. The company offers coverage across the Philippines and is operational 365 days a year. Users receive free pick-ups and on-time deliveries.
- Ninjavan: The carrier offers affordable delivery services and is trusted by 2,000,000 businesses[18]. Ninjavan also provides international shipping, warehousing, fulfillment, and pickup and drop-off points.
- Entrego: The company supports fulfillment and logistics needs of businesses in the Philippines. Its services include Parcel Management for Corporate Solutions and logistics and fulfillment solutions for MSMEs nationwide.
- LBC: LBC is an express delivery and cargo shipping provider in the Philippines and is growing its network of over 6,400 locations, partners, and agents across 30 countries. The company aims to offer fast and reliable deliveries like 24-hour door-to-door delivery in the Philippines
- 2GO: 2GO is a leading integrated transportation and logistics provider in the Philippines, known for its extensive network, including sea travel and express delivery. With a focus on nationwide connectivity, the company significantly boosted its cargo capacity in 2024 and is poised for continued growth in 2025[14].
- XDE Logistics: The carrier owns 1000+ vehicles to serve its customers. The company moves over 4 million kilos of cargo across the country and is serving 15+ industries with 3000 accounts.
Top Product Categories the Dominating Philippines’ E-commerce Market
The Philippines’ e-commerce market is characterized by increasing consumer demand across various product categories. Several sectors are currently leading in terms of online sales and growth:
- Fashion: Apparel, footwear, and accessories continue to dominate the online shopping scene in the Philippines[15]. The convenience of browsing and purchasing clothing from various brands and sellers makes this a popular category.
- Beauty and Personal Care: This category continues to thrive online, encompassing skincare, makeup, hair care, and personal hygiene products. The influence of social media and the accessibility of both local and international brands boosts its growth.
- Consumer Electronics: The increase in smartphone adoption continues to drive the Philippine consumer electronics market, with mobile devices constituting over 55% of all consumer electronics spending in the country[16]. Other gadgets like laptops, wearables (smartwatches, wireless earbuds), and home entertainment systems remain highly sought after online.
- Home and Living: As more Filipinos establish their own homes, online shopping for furniture, home décor, kitchenware, and appliances is on the rise. This trend is fueled by the increasing purchasing power of millennials and the strong influence of social media platforms which shape home design trends. Retailers are adapting by offering curated collections and personalized shopping experiences to cater to this evolving market[17].
Food and Beverages: With the growing popularity of platforms like Grab and Foodpanda across Southeast Asia, online grocery shopping and food delivery services are rapidly gaining momentum in the Philippines. Filipino consumers are increasingly opting for the convenience of ordering pantry staples, snacks, beverages, and even fresh produce through these digital channels.
The Philippine’s E-commerce Industry Challenges
The Philippines has a rapidly growing e-commerce industry, but it is not without its challenges. From logistics and technology to payment methods and competition, businesses operating in this space must navigate several obstacles to succeed in this market. Let’s look at some of the biggest e-commerce challenges in the region:
a. Logistics can be tricky in the archipelagic country
As an archipelago, the Philippines relies on maritime transport to move goods within domestic and foreign markets. Road transport is used to move goods to and from ports and within each island. On account of this, the Philippines has the highest logistics cost[20] among member-states of the Association of Southeast Asian Nations (ASEAN).
The logistics market in the Philippines is also highly fragmented, with both domestic and international companies present. In some cases, you may find only specific delivery companies servicing selected areas. Juggling between different delivery partners can be challenging as well. Fortunately, technology is being tested to optimize the warehousing and logistics industry.
b. Limited awareness of useful SaaS technology
The technology landscape in the Philippines is constantly evolving, and many businesses are actively seeking out new solutions to improve their operations in e-commerce. However, identifying the ideal solution is challenging as there are different tech options available in the Philippines, but only a few providers have a local presence in the area. As a result, getting a full understanding of how they can help is difficult. The same goes for explaining different challenges to the solutions provider. This challenge becomes even more problematic with language barriers.
“Based on our interactions with many e-commerce brands and enablers in the Philippines, several businesses are still using legacy systems and these are not scalable. Retailers and brands are open to evolving however they are not aware of the right tools available in the market. They invest in custom-built tech solutions to achieve what they want. Some are still functioning through a manual approach until their volumes grow. However, customer demands and competition advance backend operations need to improve too to deliver success. So, relying on non-scalable options no longer makes sense,” says Abhinandan Arkade, Senior Director of Product Management, Anchanto.
c. Difficulty monitoring competitor performance
Whether launching a business online in the Philippines, expanding beyond the Philippines, or entering the country’s retail market, knowing the competition is vital. Without the right means to check and compare your and your competitor’s performance, it is difficult to identify a winning strategy. Most businesses across the globe lack real-time data on their competitors to compare pricing, products, customer response, and sales. Those who do possess the means to do this experience difficulties like complicated data piles that are impossible to read and make quick decisions.
d. Cash on delivery is still the preferred payment method
A study found that 71% of online shoppers prefer cash on delivery (COD) in the Philippines[21] as their primary payment method. Even when using social commerce cash on delivery is the preferred option. The reasons for this include –
COD payments can be problematic for businesses as it takes longer to receive the payment. This means revenue calculation delays. If the order is cancelled while out for delivery, a cost occurs.
6. Tips to Succeed in the Philippines E-commerce Industry
Navigating the vibrant yet competitive Philippine e-commerce landscape requires a strategic and adaptable approach. While the market offers significant growth potential, understanding and addressing its unique characteristics is crucial for success. Here are key strategies to consider in 2025:
a. Address logistical challenges with reliable partners
As seen in the challenges, logistics can be a challenge in the Philippines due to the archipelagic nature of the country. So, partner with reputable logistics providers who can deliver to all areas of the country to help reduce this problem. Evaluate partners based on their network coverage, delivery speed, and tracking capabilities. Consider those with strategically located fulfillment centers to expedite deliveries and potentially offer options like cash-on-delivery (COD), which remains popular among Filipinos.
b. Localize offerings
The Philippines is a diverse country with varying cultural and language preferences, which makes it essential to localize your offerings with products that cater to local tastes and preferences. This includes translating product descriptions accurately, understanding local holidays and customs for promotional campaigns, and potentially offering customer support in local languages. Shopee Philippines’ Help Center, for example, offers ‘Taglish’ (a mix of Tagalog and English) versions of their articles.
c. Leverage social media
In addition to diversifying your online presence on marketplaces, use social media sites like Facebook, Instagram, and TikTok, which are also highly popular e-commerce platforms in the Philippines. Develop engaging, platform-specific content and leverage influencer marketing to reach target audiences authentically. Integrate your social media presence seamlessly with your e-commerce platform to boost direct purchases and enhance the customer journey. Live selling and interactive content are particularly effective in this market.
d. Focus on digital shelf health and post purchase experience
The Philippines has a high mobile penetration rate, and a significant portion of online shopping occurs via smartphones. Ensure your website and e-commerce platform are fully optimized for mobile devices, offering a seamless and user-friendly experience. Consider developing a dedicated mobile app to enhance customer engagement and convenience. Mobile-first design, fast loading times, and mobile payment options are critical for capturing this substantial segment of the market.
e. Focus on digital shelf health and post purchase experience
In 2022, Anchanto recorded over 60 million product units sold by its customers in the Philippines, a market where Anchanto has seen substantial growth, now comprising 18% of its Asian customer base. As more businesses join the local e-commerce landscape, preparations must be made to deal with the competition. For this, digital shelf health must be managed efficiently with the right data insights. Using advanced digital shelf health analytics can provide essential details about competitor performance, prices, products, and more, giving you a competitive edge.
Beyond the sale, focus on the post-purchase experience. Provide proactive shipping updates through your own channels (not solely relying on the logistics provider), offer excellent customer support, and streamline the return process. A positive post-purchase experience fosters customer loyalty and encourages repeat purchases, giving you a crucial competitive edge.
Advantages of Cross-Border Expansion
If you are thinking of expanding into the Philippines or from here to other nations, it is vital to know the potential available for your business. To help you with this, here are a few details to bear in mind:
Benefits of Venturing into the Philippines E-commerce Industry
E-commerce in the Philippines has immense promise given the support from authorities, growing infrastructure, and the consumer market. Let’s look deeper into these aspects to see how they’re really helping e-commerce thrive within the country.
a. Support from the government
Recognizing the need to sustain the impressive e-commerce growth in the Philippines, government bodies are actively engaging with the industry. The DTI (Department of Trade and Industry) recently published an E-commerce Roadmap which spans from 2022 to 2030 [22].
Based on the roadmap, several factors were identified that will contribute to the success of the Philippines e-commerce industry. For instance:
- Enabling and accelerating digital transformation of MSMEs
- Increasing the number of e-commerce businesses in the country
- Ensure speed, enhance security, establish structure
- Provide budgetary support to fund e-commerce initiatives
- Promote cashless transactions and increase uptake of digital payments
b. A growing high-value market
The Philippines E-commerce Roadmap also points out that there is a new market forming with young and digital-ready consumers. The middle-class segment is also growing with increasing purchasing power. This presents a great opportunity with immense potential for businesses starting out in the Philippines’ e-commerce industry.
c. Continuously improving logistics network
While the Philippines will continue to be an archipelagic nation, its logistics network is expected to improve by bridging geographical gaps. As discussed, many businesses are launching fulfillment services by setting up warehouses across the country. With these facilities in place, e-commerce parcels can be transferred from warehouse to warehouse and clubbed together for deliveries in the same locality. This will help cut costs. Moreover, the rising competition among fulfillment providers will help regulate costs.
Benefits of Venturing into Foreign Online Markets for Filipino Businesses
Beyond the Philippines, there are many markets within the Southeast Asian region with great e-commerce potential. If you’re considering expanding your retail business, here’s why these foreign online markets make sense.
a. Increased market reach
By selling products online in other countries, you can expand your customer base beyond the Philippines, allowing you to reach a global audience and potentially increase sales. Diversifying your customer base can also reduce reliance on a single market. This can help protect against economic downturns and other risks that may affect the Philippine market.
b. Access to new business opportunities
Cross-border e-commerce can also provide opportunities for your Filipino business to enter into new partnerships and collaborations with companies from around the world. This can help expand your product offerings, improve your supply chain, and access new sources of capital.
c. Improved competitiveness
By expanding your market reach through cross-border e-commerce, you can improve your competitiveness. There is a lot to learn from larger international players. Going up against them can expose you to new ideas and concepts that you can introduce to your business in the Philippines and other locations.
Future of E-commerce in the Philippines
The Philippine digital economy is set to maintain its upward trajectory, projected to expand by 15% to 20% in 2025[21], with e-commerce as one of the main growth drivers. Beyond the current key trends, the future of e-commerce in the Philippines points towards a deeper transformation driven by evolving technologies and consumer behaviors. Here’s what to expect as the e-commerce space evolves:
- AI-driven e-commerce ecosystem: Expect a greater integration of Artificial Intelligence (AI) and Machine Learning (ML) not just in personalization and customer service, but also in areas like predictive analytics for warehouse management, dynamic pricing strategies, and fraud detection, leading to more efficient and secure online transactions.
- Growing cross-border opportunities: As digital literacy and trust in online transactions grow, cross-border e-commerce is poised for significant expansion. In 2024, nearly 1 in 5 Filipino shoppers made an overseas e-commerce purchase every month, and the percentage of Filipino consumers shopping on cross-border sites rose from 27% in 2023 to 34% in 2024, indicating a growing appetite for international goods[22].
- Diverse digital payment options: Building upon the strong foundation of current digital payment adoption, we can anticipate further innovation and diversification in payment methods. This could include more sophisticated Buy Now Pay Later (BNPL) options and seamless integration of digital payments across online and offline experiences.
- Focus on sustainability and ethical consumption: As Filipino consumers become increasingly environmentally and socially conscious, there will be a growing demand for sustainable and ethically sourced products online. E-commerce businesses that prioritize transparency in their supply chains and offer eco-friendly options will likely gain a competitive advantage.
Time to Prepare
In this article, we’ve covered several aspects of the Philippines e-commerce industry including the current trends, top marketplaces, logistics providers, and more. We’ve even listed tips to help you succeed in the local online market along with the potential it offers foreign businesses.
Now, regardless of where you’re from or where you decide to expand your e-commerce to, ensure you:
- Research and understand your market and target audience
- Partner with businesses to leverage services, connections, and local market knowledge
- Look at the challenges and identify solutions
- Support your e-commerce with technology to simplify your multi-channel selling and backend operations
Looking to grow your business in the Philippines?
Reach out to one of our e-commerce experts to get answers to all your questions.
References – 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22