The E-commerce industry in the Philippines has seen remarkable growth, with its current value standing at an impressive $15.62 billion. Projections indicate that this figure will surge to $29.54 billion by 2027.
This highlights the undeniable shift towards E-commerce. Many new businesses have embraced the digital realm, alongside traditional brick-and-mortar stores. It is now crucial for businesses to integrate online selling into their operations.
Fortunately, launching an E-commerce venture has become increasingly accessible, quicker, and more cost-effective. If you are considering starting your own E-commerce business but are unsure where to begin, this guide will prove invaluable.
We will provide you with comprehensive insights, covering the advantages and disadvantages of E-commerce, selecting the right platform for your business, and optimizing your delivery and logistics processes, among other essential aspects.
How to Start an E-commerce Business in the Philippines
Starting an E-commerce business can be quite overwhelming, particularly if you are new to the industry. In order to assist you on your entrepreneurial journey, we have prepared a comprehensive step-by-step guide for you to follow.
1. Choosing a Product/Niche
Consider carefully the niche you choose for your E-commerce business, as it will greatly impact its performance and success. Take your time to select a niche that has a consistent demand in the market throughout the year.
Whether you opt for a broad niche like fashion, food, healthcare, or furniture, or decide to focus on a specific one such as mountaineering gear, surf suits, limited edition shoes, or blackout curtains, the possibilities are endless. Be innovative and think outside the box.
Failing to narrow down your products to a specific niche can make it challenging to build a loyal customer base. By specializing in a niche, you can establish trust with your consumers and position yourself as an expert in the industry. This approach will increase your chances of reaching the top of the value chain and prevent confusion among your target audience.
2. Market Research
Accurate market research is essential in order to fully understand the competitive landscape. To assist you in this endeavor, it is recommended to conduct a SWOT analysis, which involves identifying the Strengths, Weaknesses, Opportunities, and Threats of your competitors. By answering questions such as who your competition is and what their strengths and weaknesses are, you can gain valuable insights. Additionally, it would be beneficial to identify what sets your business apart from your competitors.
Another effective method to gain insights is by conducting a customer survey. This will allow you to understand your customers’ preferences and determine their desired price points. Once you have a clear focus on your business, it becomes easier to differentiate yourself from your competitors. This step will also help in defining your company’s value proposition and brand positioning.
3. Setting Up the Business
After selecting your niche, it is crucial to begin establishing your E-commerce business. Develop a logo and a detailed business plan to ensure everything is well-organized.
Once these steps are completed, proceed to register your business name to give it official status. For further guidance on starting a business in the Philippines, refer to a comprehensive guide available for your reference.
4. Setting Up & Optimizing Sales Channels
Once your business is up and running, it’s time to set up your E-commerce store. Remember, sales won’t come pouring in as soon as you launch. You must work on optimizing your sales channels to ensure your products are easily accessible and visible to your target audience.
Wondering how to do this effectively?
Start by crafting an irresistible offer for your audience. Show your customers how your product can improve their lives. Without this crucial information, they won’t see the value in purchasing from you.
Next, familiarize yourself with SEO techniques to boost your search engine rankings. This will enhance the visibility of your products on Google and your chosen platform.
In addition, build a strong presence on social media. Showcase your products on various platforms and online marketplaces to attract more customers and boost sales.
Lastly, fine-tune your E-commerce store or online listings to maximize performance and drive sales growth.
5. Choosing the Best Payment Gateways
In today’s era, it is imperative to ensure that customers find purchasing convenient. Hence, it is essential to offer a diverse range of payment gateways to cater to the varying needs of customers. Providing options such as bank transfer, GCash, Grabpay, Cash on Delivery, PayMaya, and other platforms will facilitate seamless payment experiences for customers.
6. Delivery & Logistics Management
Some of the key responsibilities of a business owner include ensuring the safety of your inventory and timely delivery of orders to customers. Although these tasks may appear straightforward, they are actually quite challenging and time-consuming.
To simplify this process, it is essential to select a logistics partner that is not only trustworthy and reputable but also efficient. Otherwise, delayed deliveries could result in significant financial losses. Here are the key aspects to focus on when managing delivery and logistics:
1. Order fulfillment services
Fulfilling orders can be a complex task, especially when dealing with a large number of customers on a weekly basis. Order fulfillment services encompass receiving, processing, and delivering orders to customers, which can be handled either in-house or by a third party.
2. Warehousing
Proper product storage is crucial and requires a highly secure warehouse to prevent theft and damage. Additionally, the warehouse should be well-maintained, clean, and organized.
3. Live Customer Support (Sales Retention)
Customer support is often underestimated but plays a critical role in modern business operations. Effective customer support ensures that customers are acknowledged regularly and feel heard, increasing the likelihood of repeat business.
4. Cash on Delivery Integration
Cash on delivery is a convenient payment method preferred by many customers, especially in the Philippines where bank accounts may not be common. To offer cash on delivery, a reliable logistics partner is needed to ensure prompt and efficient order delivery.
5. Parcel Tracking
By partnering with a dependable logistics provider, customers can easily track their orders, reducing delivery-related anxiety and enhancing satisfaction. Tracking orders also allows business owners to monitor timely deliveries effectively.
6. E-commerce Marketing
Despite having a high-quality product and a dependable logistics partner, it is crucial to implement effective marketing techniques in order to boost sales. There are numerous online methods available for promoting your products, each with its own set of advantages and disadvantages. One such method is content marketing, which involves creating relevant blogs, posts, videos, and webinars that cater to your target audience. By exposing your customers to these forms of content, you can generate interest in your brand and introduce them to your products. Another successful strategy to consider is email marketing, where you can send personalized emails to your customers, allowing you to establish a genuine connection with them.
Tips for when you start an E-commerce Business in the Philippines
Considering all the points mentioned earlier, it is clear that there are numerous factors that must be taken into account before embarking on an E-commerce venture. It is essential to address various aspects both prior to, during, and after the actual business operations. To simplify the process, adhere to the following guidelines.
1. Take your time with the planning process
Launching your business can be an exhilarating experience, but it is crucial not to rush through the planning phase as it can lead to future complications.
Start by clearly defining your business goals and objectives. Then, proceed to develop a thorough and detailed business plan. Neglecting this crucial step may result in a short-lived venture.
2. Be in multiple sales channels if needed
Consider expanding your sales reach by utilizing various sales channels. Although focusing on your website and Google ads is a good start, branching out to platforms like Facebook, Instagram, TikTok Shop, Shopee, and Lazada can significantly increase your visibility. While managing multiple channels may require more effort, the rewards are worth it. Remember to prioritize platforms where your target audience is most engaged for optimal results.
3. Determine your USP early
Establishing your unique selling point (USP) early on is crucial when preparing to launch your online store. Defining your USP from the start will allow you to strategically position your business and gain a competitive edge. To determine your USP, consider questions such as why customers should choose your store over others, why they should purchase from you even if prices are the same, why they should pay for their orders, and how you stand out from competitors. Identifying your USP is essential for the success of your business, as it will help you highlight what sets you apart, such as offering products at a lower price than your competition.
4. Always give top-tier customer service
Providing exceptional customer service is crucial for the success of your E-commerce business. By ensuring that your customers have a positive experience, you can encourage them to make repeat purchases.
Keeping your customers informed about their orders and sending personalized messages upon delivery will make them feel valued. Promptly responding to messages received via email or social media platforms is also essential.
Consider hiring dedicated staff to manage customer inquiries and requests to enhance your customer service efforts. This will help you save time and concentrate on the core operations of your business.
5. Utilize research tools and services to streamline store management
For example, consider utilizing Google Analytics to analyze customer interactions on your website and identify high-traffic pages for targeted improvements.
Additionally, explore services such as Payo to optimize logistics and free up time for enhancing your business strategies.
Top Philippines Ecommerce
This list ranks the top eCommerce platforms in The Philippines using data collected from our E-commerce Marketplace Monitoring Services in Southeast Asia. By analyzing website traffic and app download statistics from January 2024, we aim to provide insights into the online market in the region. Additionally, we will explore some international marketplaces that, despite not having a specific PH store, remain popular among Filipino consumers.
1. Shopee PH
Shopee dominates the B2C eCommerce market in The Philippines with over 46% market share, surpassing Lazada by nearly 30 million visits. The rapid growth of Shopee since its inception in 2015 has positioned it as a formidable competitor to Lazada across various Southeast Asian markets. Originally a C2C platform, Shopee has successfully transitioned to a strong B2C player in the region, resonating with customers. With a mobile-first approach, Shopee’s app holds the top spot for marketplace downloads on both Google Play Store and Apple’s App Store.
2. Lazada PH
Lazada provides support for C2C, B2C, cross-border, and flagship brand sellers. One of Lazada’s key strengths lies in its advanced logistics capabilities, which include same-day and next-day delivery services in numerous urban areas. The company continues to enhance its network by establishing new warehouses, creating more possibilities nationwide. Similar to Shopee, Lazada offers a wide range of products across various categories. Fashion stands out as one of the most popular categories in the Philippines.
3. Carousell PH
Carousell, a prominent player in Southeast Asia, has established its presence in multiple countries within the region. Currently, it holds the position of the second-largest marketplace in Singapore. Originally focused on classified ads for electronic devices, Carousell has undergone a transformation and expanded its offerings. It now operates as a comprehensive marketplace catering to both consumer-to-consumer (C2C) and business-to-consumer (B2C) transactions. Users can find a wide range of products, including fashion and beauty items, automobiles (both new and used), and even properties.
4. Zalora
Zalora, a retailer of fashion and cosmetics based in Singapore, stands out as one of the top three platforms in the country with over a million monthly visits. Offering a wide range of over 50,000 products, Zalora features popular international brands alongside emerging brands from the Philippines. This strategic approach is consistent across all regions where Zalora is present, showcasing a mix of globally recognized products while also promoting local brands.
5. Seataoo
Seataoo, a marketplace based in the Philippines, has swiftly gained popularity since its launch in September 2022. It caters to cross-border eCommerce, with a primary focus on sporting clothing and equipment. Currently, Seataoo operates in 25 regions, with Singapore, Hong Kong, and The Philippines being its largest markets.
Expand Your Business to Philippines Ecommerce with AsiaCommerce
When doing expanding your business in Philippines e-commerce, it’s essential to have a reliable partner by your side. That’s where AsiaCommerce comes in.
Our SEA Market Entry service is designed to help you navigate the complexities of entering the Southeast Asian market seamlessly. Whether you’re a startup looking to make your mark or an established business seeking new opportunities, our comprehensive suite of solutions is tailored to meet your unique needs.
With AsiaCommerce, you gain access to a team of experts who specialize in market research, partnership arrangement, and sales program development. We understand that each market in Southeast Asia presents its own set of challenges and opportunities. That’s why we conduct in-depth research to provide you with valuable insights into local consumer behavior, industry trends, and regulatory requirements. Armed with this knowledge, we help you forge strategic partnerships with key players in your target industry, ensuring a smooth entry into the market.
Furthermore, our consultation services extend beyond market entry strategy. We offer guidance and clarification on product branding, helping you position your offerings effectively to resonate with your target audience. Whether you’re navigating cultural nuances or grappling with regulatory compliance, AsiaCommerce is here to support you every step of the way. With our expertise and personalized approach, you can overcome the challenges of expansion smoothly and unlock the full potential of the Southeast Asian market. Visit our service page now to get further information for your business expansion.
