The Future of Filipino Shoppers

The Future of Filipino Shoppers

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Fueled by the continuing advancements in mobile and digital technology, the retail industry is being reshaped into a bustling online global bazaar right before our eyes, and more aptly in the palm of every consumer’s hands.

 

The Rise of Mobile Shopping

 

The introduction of e-commerce 40 years ago has the paved way to a gradual but very noticeable shift in customer preferences towards online shopping.

 

Case in point, brands report 73% sales from their websites, a close race with in-store’s 79%, according to the PwC Global Total Retail Survey 2017. Surprisingly, mobile app sales pale in comparison to the two channels at 25%-barely beating catalog sales at 24%.

 

Heightened Customer Expectations

 

The PWC Survey gleaned that 37% of shoppers globally use their mobile phones to pay for purchases online, 44% use it to research products, while 38% use it to compare prices. With mobile shopping steadily gaining more traction, so is the mobile user/shopper’s demand to access content and services.

 

This heightened expectation on customer experience also entails the rising demand for more tech-savvy store associates with deep knowledge on product range and store networks. In fact, 78% of shoppers think that sales associates who know the store’s products, systems, and technology inside and out make a real difference.

 

Indeed, global retail trends are tech-driven, specifically, mobile-motivated. In response to this, brands are making sure that mobile experience is integrated into campaigns. In the US alone, 69% marketers plan to spend more on mobile websites.

 

The Asia-Pacific Retail Situation

 

Meanwhile, in the Asia-Pacific, the thriving e-commerce, alongside the expanding middle class, drives retail sales in the region—promising an increase of 7.7 amounting to $ 9.254 trillion is reportedly expected. But what’s more impressive is the e-commerce sales, which is projected to reach $1.365 trillion by the end of 2017—a remarkable increase of 29.6% since 2016.

 

These projections aren’t hard to believe since the Asia-Pacific has one billion online users, making up more than 46% of the total online users in the world. The increasing number of individuals gaining internet access is what drives e-commerce growth even further.

 

With approximately 924.8 million people in Asia-Pacific expected to make at least one online purchase in 2017, eMarketer estimates that e-commerce will make up 25.4% of total retail sales in Asia-Pacific by 2021.

 

Retail and Rise of E-Commerce in the PH

 

One of the rising front-runners in the increasingly robust digital economy in the Asia-Pacific region, the Philippines rank second-highest in Southeast Asia and 6th in the whole of Asia with over 33 million users.

 

41.7% of these online users are smartphone users, with 32% purchasing online at least monthly. Indeed, 30.3 million Filipinos are estimated to make an online purchase.

 

The infographic below sheds light on the innovations and improvements in the Philippine retail industry and gives us a glimpse of the future of Filipino shoppers vis-a-vis the rising popularity of e-commerce in the country.

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Emergence of the Filipino Mobile Shopper

 

Philippine e-commerce has seen a steady climb over the years with a 22% increase—from last year’s $1 billion online business revenues to this year’s $ 1.2 billion.

 

The PWC Total Retail Survey documented that 54% of Filipinos search for products on Amazon alone. Unfortunately, other local e-commerce sites were not included in the said survey.

 

Perhaps if other online business transactions such as those on online pawning and buy-and-sell platforms were factored in, the numbers might have increased even more.

 

Filipinos go online shopping for three primary reasons: (1) 58% of Filipinos agree that they shop online for the convenience, (2) 47% cited price, and (3) 46% favored the deals found online. Considering these, it is then understandable how companies are willing to invest big bucks on mobile ads. In fact, mobile advertising spending in the Philippines is projected to grow to about USD 64.6 million by the end of 2017, accounting for 7.0% of total ad spending in the country.

 

Demand for Convenience

 

Filipinos online shop for convenience (58%), price (47%), and deals (46%) are being cited as top reasons for online shopping.

 

Nielsen’s latest Shopper Trends Report noticed an increasing patronage of convenience stores. 29% of Filipino shoppers visited convenience stores in the past four weeks, which is a remarkable spike from just 8% in 2012.

 

Most convenient store shoppers visit the store to buy a quick meal or snack or to satisfy a craving for a particular food or beverage. Additionally, digital kiosks have been popping in convenience stores and serving as payment centers or bills payment and loading station.

 

Physical retail stores are here to stay

 

Despite the growing popularity of e-commerce, retail stores are still Filipino shoppers’ best choice. In fact, 63% of Filipinos prefer buying consumer electronics and gadgets in store.

 

When it comes to household appliances, 46% of Filipinos prefer to research on products in store. Meanwhile, 43% of Filipinos prefer to do their research for toys in store, and 52% prefer to purchase toys in store.
Growing Health Consciousness

 

The recent years have seen a noticeable growth in the sales of health products.

 

A 4.4% growth in the dairy (milk products) category has been reported and personal care (hair and skin care products) saw a 3% growth in value. Total cereal and yogurt categories enjoyed double-digit growth with 11% and 12% value sales, respectively.

 

More telling is the 1.5 % decline in the value sales of beverages such as alcohol and fruit juices. Moreover, the surge of healthy-meal-plan delivery services has been observed.

 

Filipinos’ Online Purchasing Habits

Filipinos have indeed embraced online business transactions, as they find the accessibility of products and services within their fingertips convenient—reflecting a 22% increase in revenue from e-commerce.

 

  • Filipinos pay their online purchases through various payment options:
    • 53% of Filipinos pay for online purchases through cash
    • 36% Filipinos pay for online purchases through credit cards
    • 10% Filipinos pay for online purchases via bank transfers (Source)
  • 64% of online Filipinos check information first online before making a purchase.

 

The Future Filipino Shopper

 

More and more Filipinos have access to the internet, and therefore, access to information that can potentially influence their purchasing preferences and decisions.

 

Indeed, the increasing connectivity, consumer literacy, and brand presence in social media are shaping a new race of Filipino shoppers.

 

Increasingly Hyper-connected

 

Throughout the years, the number of Filipinos with internet connection has steadily increased. The Philippines topping the global social media usage is a testament on just how connected Filipinos have become.

 

  • Internet users in the country spiked four times the 7% growth rate in the previous 12-month period.
  • Filipinos spend an average of 4.3 hours a day on social media.
  • Internet users increased by 13 million (27%) from January 2016 to January 2017
  • As of January 2017, there are 60 million Filipino internet users (Source)
  • 38% of Filipinos access the internet through their mobile phones (Source)

 

These numbers prove that a vast majority of Filipinos are always online even when they are on the move—thanks to laptops and the more portable mobile phones and tablets. All of these mean that Filipinos have easy access to information that can influence their purchasing decision.

 

Increasingly Informed

 

In relation to hyper-connectivity, the Filipino shopper is highly-informed as a result of having easy access to information critical in making purchasing choices.

 

  • Local brands now maintain social media presence, as well as blogs geared towards helping readers become educated consumers.
  • 85% of online Filipinos watch videos of the brands, products, or services they are thinking of buying
  • 35% of Filipinos are receptive towards targeted online ads
  • 83% of Filipinos appreciate relevant online ads
  • 43% of them don’t bother that their online activity is being tracked as long as they see ads that are relevant
  • Mobile advertising spending in the Philippines is projected to grow to USD 6 million by the end of 2017.

 

Filipinos utilize their connectivity to research on products and services before making any purchase. Blog articles, videos, and ads churned out by local brands online contribute to making Filipino shoppers become more informed consumers.

 

Increasingly Social-Review Reliant

 

As previously mentioned, Filipinos spend an average of 4.3 hours a day on social media.

 

  • 64% of online Filipinos rely on social media channels to influence their purchase decisions
  • 89% of online Filipinos read and consider what people post or comment before purchasing a product or availing of a service.
  • 44% of shoppers spend more with a brand when the brand engages in social media interactions.

 

Indeed, Filipino shoppers appreciate every bit of information they can find online as long as it is relevant and helps them make the right purchasing decision.

 

Conclusion

 

In this rapidly evolving digital age, the retail industry has proven that it will not be left behind. As the retail industry transforms, so does Filipino shoppers. That said, they can be expected to become progressive online and mobile shoppers, increasingly social media-reliant buyers, and more educated consumers.

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Gem Muzones

Gem is a contributing writer for PawnHero. She was a news writer who walked alongside protesters in the streets of Manila and a magazine editor who got free passes to product launches and the hippest events. She's a big Game of Thrones fangirl, 1/2 of a budget travel blogging duo for Travels with a Hobo, and suffers from chronic hair dissatisfaction (she changes her hair color every month).