'Shoppertainment' and 10-Minute Shopping: Key Insights on Ecommerce in the Philippines
The competition among ecommerce platforms is more cutthroat than ever, particularly in the region. According to a study by Accenture cited in the latest Map of Ecommerce Report by Malaysia-based meta-search aggregator and comparison website iPrice, Southeast Asia’s share of digital commerce will exceed $30 billion in the next two years.
Online statistics portal Statista, meanwhile, estimates ecommerce in the Philippines to grow by about 7.9 percent annually over the next five years, reaching a market volume of about $1.48 billion by 2024.
No wonder the biggest ecommerce platforms in the region are fighting hard to cast a wider net, attract more users, and strengthen their position in the industry even further.
Based on monthly web visits, the top five ecommerce sites in the country in 2019 are still Lazada, Shopee, Zalora, Ebay, and Beauty MNL.
A study by iPrice and mobile data and analytics platform App Annie shows a slightly different list in terms of the most-used mobile shopping apps. While the top three remains unchanged, the fourth and fifth spots are taken by Amazon and AliExpress, with Beauty MNL just missing the cut and landing at number six.
The rest of the top 10 includes relative newcomer Wish, eBay, Sephora, and Alibaba.com.
But clearly it’s not enough to offer a vast array of merchandise, a user-friendly interface and seamless and hassle-free transactions when buying something online. The iPrice and App Annie report recognized how the strongest mobile apps have started utilizing so-called “Shoppertainment” to draw more users in.
Lazada, for example has introduced quiz game “Guess It!” on its app, while Shopee launched Shopee Live Festival—where customers can win discount voucher giveaways and special prizes are given away to customers—in six countries. Indonesian site Tokopedia collaborated with K-pop sensation BTS for promotional activities, while Tiki and Sendo launched their own livestream app features in Vietnam.
The report also revealed other key insights about ecommerce in the Philippines:
Philippine online shoppers spent an average of 10 minutes a day on ecommerce sites
Filipinos spent the third-longest time shopping online, spending about 10 minutes a day on ecommerce sites, while Thailand leads in average visit time at 12 minutes a day, followed by Indonesia with 11 minutes a day. Vietnam spends the least time on ecommerce sites at just about seven minutes a day.
Filipinos spend an average of about P1,000 during online sales
Filipinos spend an average of P1,013 during an online sale, which is about P281 more than the average household expenditure per day (according to statistics from the Philippine Statistical Authority). They also shelled out 25 percent more during the 12.12 Sale than Singles’ Day (or 11.11), which points to just how big the Christmas season is in the country. This means Filipinos spent the most on 12.12 than any other online sale or ordinary day.
Meanwhile, elsewhere in Southeast Asia, data reveal that there was an increase in consumer spending by an average of 56 percent on big online sales events compared to an ordinary day in 2019. Consumers in the region are definitely more likely to spend during big sales periods, exactly like how physical sales still bring crowds of people into malls.
In Southeast Asia, average amount spent on 11.11 was $47 (P2,375), which is 74 percent higher than the average of an ordinary day, while the average amount spent on 12.12 was $44 (P2,223), or 63 percent higher than the average of an ordinary day. Unlike in the Philippines though, consumers in the region spent the most on 11.11 more than any other day.
Filipinos and Southeast Asians spent the most on electronics
Here’s one category where data in the Philippines matches the rest of the region.
According to iPrice’s database, the top categories of 2019 are the following:
- Electronics: About 40 percent of 2019’s product orders were under the electronics category. The average amount spent on electronics in a day is $37 (P1,869).
- Fashion: About 25 percent of the product orders received in 2019 were under the fashion category. Average amount spent on fashion items in a day was $22 (P1,112).
- Home & Living: About 15 percent of orders were under home and living. Although it has fewer orders than fashion, the average amount spent on this category is slightly higher, amounting to $23 (P1,162).
Ecommerce sites acquired traffic mostly through direct or organic searches
Mobile might be the future but desktop is far from dead. An analysis during the fourth quarter of 2019 by iPrice and SimilarWeb broke down the sources of web traffic into five categories: direct, organic, paid, social, and others. The study found that an average of 48 percent of web visits to ecommerce sites are acquired directly (typing it on their browser’s URL). This validates the importance of brand strength.
Moreover, ecommerce sites acquired traffic from organic searches (by typing it in search engines or accessing through other entities such as clicking links in an article) by an average of 38 percent, indicating that Search Engine Optimization (SEO) also plays a huge role in how companies acquire their user base.
The Philippines, Vietnam, Indonesia, and Thailand’s ecommerce sites acquire traffic mostly through direct traffic, while the more mature countries like Singapore and Malaysia’s, acquire traffic mostly through organic searches. Acquiring traffic through social media and paid advertisements apparently isn’t as effective as direct traffic and organic searches in Southeast Asia.