In the cross-border e-commerce arena, some Southeast Asian countries have already demonstrated their unique advantages. Vietnam has gained recognition with its internet celebrities and manufacturing prowess. Singapore, on the other hand, hosts the headquarters of many cross-border platforms. The Philippines, as the second most populous country in Southeast Asia, doesn’t stand out as prominently.
However, this land also places a significant emphasis on mobile and social media, which is a crucial factor driving e-commerce growth. High traffic and relatively low competition make the Philippine e-commerce market attractive. Among numerous product categories, the demand for electronic accessories in the Philippines remains stable and enduring.
It is expected that the e-commerce revenue in the Philippines in 2023 will reach $18.161 billion, with a compound annual growth rate (CAGR) of 12.9% from 2023 to 2027. According to ecommerceDB data, electronics and media are the largest market segments, accounting for 31.2% of e-commerce revenue in the Philippines. 6Wresearch predicts that, driven by greater convenience in purchasing, the Philippine mobile accessories market is expected to experience exponential growth from 2023 to 2029.
In the Philippines, many unique advantages arise from natural conditions, making it a treasure trove for cross-border businesses.
Why the Philippines?
As an archipelago nation, the Philippines is located at the southeastern boundary of Southeast Asia, consisting of over 7,000 islands. However, there are significant regional disparities in development, and the population distribution is quite uneven. Over 15 million people are concentrated in the “Greater Manila” national capital region, which hosts more than half of the country’s factories.
Despite the congestion, it could be a promising market for cross-border e-commerce. The most economically powerful households in the Philippines are concentrated in this region, making it easier for warehousing and distribution.
Furthermore, the population structure here is quite youthful. The Philippines has a population of approximately 109 million, making it the second most populous country in Southeast Asia. Unlike East Asia, which is grappling with an aging population, the median age in the Philippines is only 25.7 years.
People in the Philippines are deeply immersed in the internet, with over 70% of active users and an internet penetration rate of 67.8%. The smartphone penetration rate has reached 69%, with an average daily internet usage of over 9 hours, ranking among the top three worldwide.
With a larger population base, a young population, widespread internet and social media usage, the Philippines provides fertile ground for the development of social platforms and e-commerce, especially among young people who are more willing to try new things and are interested in electronic products. This lays the foundation for the demand in the electronic accessories industry.
The Philippines had a GDP of over $400 billion in 2022, with a per capita GDP of $3,623, showing a positive growth trend. The Philippine central bank recently announced that GDP growth in 2023 is expected to exceed 6%. Additionally, after years of vigorous economic development and efforts to combat criminal activities, the domestic environment in the Philippines has significantly improved, making political stability crucial for trade activities.
Looking at population distribution, demographics, internet and social media usage, and economic and political development, the Philippines demonstrates favorable trends for the development of cross-border e-commerce.
Why Electronic Accessories?
On one hand, the robust sales of electronic products are driving the vibrant development of the electronic accessories market. The electronic products market has always been significant in the Philippines. In 2022, the shipment volume of mobile phones alone reached 16.3 million units. Furthermore, domestic brands such as realme, ITEL, and OPPO dominate the Philippine market. Among the top 5 brands by market share, all except Samsung are Chinese brands, with realme having a market share of up to 22.8% in 2022.
Considering the popularity of such brands in the Philippines, it’s evident that local manufacturers have a distinct advantage when it comes to supplying related accessories.
In addition to various mobile accessories like phone cases and Bluetooth earphones, there is also a market for equipment that complements computers and cameras, such as stands, keyboards, monitors, webcams, and mice. It’s important to note that the penetration rate of mobile phones is much higher in the Philippines compared to desktop or laptop computers, resulting in a higher demand for mobile accessories.
Philippine consumers tend to research products they want to purchase online and prefer infrequent large-scale shopping, which is closely related to the convenience of online shopping. They also tend to prefer cash-on-delivery payment methods over electronic wallets.
On the other hand, the economic situation in the Philippines is also a significant factor. The average individual income in the Philippines ranges from three to four hundred US dollars, and there isn’t a strong emphasis on savings, nor is there a strong desire for fixed assets like houses and cars, as they are more concerned about their future. Despite the relatively low income, high consumer enthusiasm prevails, with an average annual per capita expenditure of $2,616, which is higher than that of Vietnam.
However, due to the relatively low income, consumers in the Philippines are sensitive to prices and have low brand loyalty. This is one of the reasons why electronic accessories have gained traction in the Philippines. Instead of frequently replacing electronic products, these small online product consumptions are more affordable and have significant potential.
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