Research by Nielsen shows that Gadgets & Electronics are the top eCommerce product category in the Philippines, accounting for 33 per cent of online purchases. This is consistent with data from Statista, which shows that Electronics & Media is the country’s largest eCommerce market segment with a market volume of US$270 million in 2019. It also explains the rise of Argomall, an eCommerce platform that specialises in selling electronics like smartphones and tablets, on iPrice’s eCommerce website visit rankings.
Given how Filipinos spend an average of 4 hours and 12 minutes per day on social media—according to Hootsuite and We Are Social’s Digital in 2019 report—it should come as no surprise that they’re also prolific users of tech, specifically, mobile gadgets. The country’s mobile phone penetration rate stands at 116 per cent.
In fact, two of the top three bestselling products on Lazada within 12 hours of launching its 11.11 shopping festival in 2018 were smartphones: the Xiaomi Redmi S2 and the Pocophone F1.
Filipinos also vote with their wallets when shopping for tech, with many favouring less expensive brands. Chinese brands Xiaomi and Huawei, with their array of mid-range devicessold at discounted prices during 11.11, edged out household brand names with higher price points, such as Samsung and Apple.
Image Source: Revu.com.ph
A separate report by International Data Corporation (IDC) Philippines also revealed that the top smartphone vendors for the first half of 2018 were smaller brands specialising in mid-range devices: Cherry Mobile (a Philippine electronics and mobile phone brand), Vivo, Oppo, and Huawei. These brands offer phones with features previously exclusive to flagship devices, such as bezel-less displays, powerful processors, and long battery life.
Samsung also made the list, with IDC noting that the company also offers lower-priced smartphones such as the Galaxy J and A Series on top of their premium Galaxy S and Galaxy Note products.
If consumer electronics is your primary vertical, it’s a good idea to pay attention to the devices that aren’t widely available in the Philippines. While mid-range devices offering value for money are driving smartphone growth in the Philippines, people are turning online to shop for these devices due to the lack of official retailers in the Philippines.
For example, Xiaomi opened their first physical store in the Philippines only in 2018. But this store is located in the capital, leaving consumers outside of Metro Manila with no choice but to purchase products on platforms like Lazada and Shopee. And even on these sites, the demand for devices is so high that hyped-up midrange devices like the Pocophone F1 sold out in five minutes. This presents a window of opportunity for you to cater to underserved consumers hungry for gadgets.
Want to find out more about how your eCommerce products can clear customs in the Philippines and in other SEA countries? Find out in our downloadable Customs Clearance guide!
Taking advantage of a price-driven market
If there’s one thing we can surmise from the popularity of these eCommerce product categories in the Philippines, it’s that Filipinos shop online because of price, discounts, brand, and convenience. For international merchants, this could mean that lower-priced and medium-range items offer the best returns in the Philippines, at least for now. This may be an emerging eCommerce market, but all signs point towards sustained growth in the future. If you play your cards right, you may be able to secure a favourable position in the country before other merchants rush in.
As mentioned earlier, Filipinos are voracious social media users, so be sure to invest in social media marketing and advertising, particularly on Facebook, to stay top of mind in this market. For electronics, discounts and sales are a surefire way to grab attention, as seen in Lazada and Shopee’s shopping festivals. For fashion, consider partnering with local influencers on Instagram—the de facto haven for Filipino fashionistas.
Keeping in mind Filipino online shoppers’ focus on price, try to see if you can offer vouchers and promo codes for your store. See, for example, this list of Lazada voucher codes. If you have a strong following on your store’s social media pages, you can run simple contests or polls there, too, to reward your customers with prizes. And keep an eye out for the hottest sales periods in the Philippines so you can plan your product offerings and marketing campaigns ahead of time.
As an archipelago of more than 7,600 islands, the Philippines presents eCommerce merchants with logistics issues. However, suburban and rural areas with fewer shopping malls comprise a potential market for online sellers, who can deliver items that are otherwise unavailable in brick-and-mortar stores.
Therefore, it’s important to find a reliable cross-border shipping partner and last-mile delivery service provider that can deliver packages nationwide, without drastically increasing the shipping fees. If you can offer Filipino online shoppers the products they’re looking plus an excellent delivery experience, you’ll be on your way to success in the Philippines’ eCommerce market in no time.
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