Understanding the Psyche of Filipino Millennials’ Shopping Behaviour
The Philippine e-commerce has been continuously growing its online market reach from the rising middle class and tech-savvy population mainly consisting of “millennials”. In fact, the global millennial workforce is expected to be at least half of the world population by 2020, according to PwC report.
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In the Philippines, the current workforce population comprises of more than 47% millennial population. A KMC Saville report finds that in the next five years, the Filipino millennial working population is projected to hit 55% of the entire working population. While in terms of online activity, Digital in 2018 report finds that Filipinos are the most social in Southeast Asia, spending about four hours online in a day.
To understand the Philippines’ market behaviour in the E-commerce industry, iPrice Group utilized its proprietary data by analysing its 1,300-merchant datasets. Our findings in the report shows that the Philippines has the third highest traffic in SEA, however it only translates to 0.8 purchase rate. Meanwhile, the purchase rate in mobile as compared to desktop is relatively low in all SEA markets, the Philippines is one of the lowest (together with Thailand) in all 6 markets analysed.
Based on the SEA state of E-commerce report 2017, the Philippines is the third most active in mobile commerce with 71.25% share of traffic in SEA. Despite that online shopping connotes impulsive buying due to its convenience, Filipino consumer behaviour implies an unexpected market response. Before making an actual purchase, Filipino consumers tend to utilize different online platforms first to assess their prospect product.
A Path to Purchase report 2017 finds that Filipino consumers first do a series of searches particularly from price comparison, product reviews and videos before purchasing a product. While the results could indicate a lagging factor in terms of consumer penetration, the country’s average total amount spent (basket value) suggests that Filipinos’ confidence in online shopping is high (comparing it against SEA market).
Analysing the macro-perspective of PHL economy, the country has one of the lowest GDP per capita (US$ 2951.07) in SEA (which is closely related to basket value). However, its basket value takes great leap as the second highest in SEA with US$56 (PHP 2,887) per order while Singapore tops with US$91 (PHP 4,736). The rationale on these findings indicate that Filipino consumers in general have small purchasing power. However, through trusted product reviews and comparison platforms could encourage their willingness to spend online.
Meanwhile, mode of payment in the E-commerce also largely influence purchasing activity. As more and more Filipinos are exploring the convenience of online shopping, credit card is the most common payment method in the country. Based on our SEA State of E-commerce report, there is a 95% of e-commerce merchants in the Philippines that offers credit card payment method while the next most common mode of payment is cash on delivery with 80%.
This is an expert article by iPrice Group