CAMIA: 8 leading companies in the Philippine e-commerce market

Although the Philippine e-commerce market has attracted more consumers through social media activities, it is difficult for local players to get a share of the pie as international players have already gained a huge lead and their position is unshakable.

Interestingly, the results of the Philippine E-commerce Map Q2 2018 survey show that many local players are active, with only a few international players taking over the e-commerce market activities in the Philippines.

However, it is the international players that are fueling the market activity to a large extent as they account for 93% of the total e-commerce market activity. Meanwhile, in terms of social media activity, local players account for 75% of the total e-commerce market social media activity (Facebook, Instagram and Twitter).

International players are the main promoters

Eight major players make up the Philippines’ share of international e-commerce: Lazada, Shopee, Zalora, eBay, Sephora, Sophie Paris, My Sale, and Melissa Philippines.

Among the eight major players mentioned above, four e-commerce companies, Lazada, Shopee, Zalora, and eBay, are among the most visited e-commerce websites in the Philippines.

It is worth noting that Lazada's winning streak in the Philippines has captured 68% of the e-commerce market. Specifically, Lazada's traffic lead in the Philippines is at least 3 times that of its competitor Shopee, which is unique in the Philippine market because its SEA peers lead less than half of the e-commerce market in Malaysia, Vietnam and Thailand, with shares of 45%, 20% and 47% respectively. For the Indonesian and Singaporean markets, local players Tokopedia and Qoo10 are the e-commerce they are most familiar with and are the most visited e-commerce.

The online shopping preferences of Filipino consumers are mainly based on brand familiarity. According to a survey by Kantar Worldpanel, 84% of Filipino consumers said that despite the large number of low-cost alternatives on the market, they prefer to buy well-known and trusted brands and reject "copycats". This specific consumption behavior of Filipino consumers mainly affects local players, as most of them have just started to develop their respective businesses in the digital market.

Local players begin to attract fans

The total traffic of local players only accounts for 7% of the total traffic in the Philippine market, but in the entire e-commerce traffic, local players account for a larger share.

Among them, the most visited local player is BeautyMNL, which ranks 5th overall with less than 1 million traffic, followed by Kimstore, which ranks 9th.

Galleon, O Shopping and Takatack ranked 7th, 8th and 11th respectively in e-commerce in Q1 2018. Argomall moved up two levels to 6th place.

Interestingly, the report found that most local players experienced inconsistencies in their marketing activities as there were sometimes jumps and misses in rankings. The major e-commerce and traffic leaps were Apartment 8 Clothing, Zeus, Straight Forward Clothing, Great Value Plus, Bayan Mall, TV Shop, Mall Hallo Hallo and CesaPH, which increased their traffic rankings by an average of about 7 levels.

The average traffic ranking of Adobemall, Watch Portal, Goods, Mommy Mundo, Bigmk and Abubot dropped by about 8 levels.

Although local players have a lower take rate in terms of website traffic, social media activities on Instagram and Twitter attract a lot of followers, accounting for 70% and 51% of social media followers in the entire e-commerce market. Meanwhile, social media activities on Facebook are mainly taken over by international players as it has a 77% share in the entire e-commerce market.

As more and more local companies are gradually expanding their market coverage through social media platforms, they should prioritize building e-commerce brands according to the consumption preferences of Filipino consumers. The Philippine government is currently assisting local players to enter the digital market to develop the industry, however, it still lacks a clear support to compete with these international players.

Source: CAMIA