PEOPLE go through the annual Christmas rush to buy gifts for loved ones and tokens of gratitude to friends, colleagues, superiors and employees. Some go gift-hunting as early as September to avoid heavy traffic and jampacked shopping malls. The rest are inclined to simply “add to cart” their gift list on e-commerce platforms.
The popularity of e-commerce or online businesses peaked worldwide during the pandemic. Since mobility was restricted, consumers went online to buy what they needed.
Since then, online shopping has shaped the post-pandemic world. Sales rose from $17 trillion in 2016 to $27 trillion in 2022 in 43 countries, according to the 2024 Digital Economy report by the United Nations Conference on Trade and Development (Unctad)
In the Philippines, e-commerce sales in 2012 totaled P79 billion based on the 2012 Census of Philippine Business and Industry. A decade later, it grew to more than P991 billion, as reported by the International Trade Administration.
But online shopping has also opened Pandora’s box of negative effects on cybersecurity and the environment.
In 2023, credit information company TransUnion found many Filipinos were concerned about online fraud. Scams, such as ordering an item and receiving something else, became prevalent.
Shopping online has become hazardous to the environment as well. In 2019, global data and business intelligence platform Statista said approximately 2.1 billion pounds of plastic packaging were used in the e-commerce industry. This would double to 4.5 billion pounds by 2025, Statista noted.
Convenience
Despite these drawbacks, do people still prefer buying things online?
The answer is yes. Kantar Philippines reported in October that more Filipinos find online holiday shopping more convenient than heading out to malls or physical stores.
Retailers have started using technology tools such as artificial intelligence (AI), augmented reality (AR) and machine learning (ML) to provide insights into customer behavior and preferences, as well as an improved shopping experience.
A strong, persuasive factor in online shopping is the holding of sale promos. Two leading e-commerce platforms in the Philippines introduced monthly sale gimmicks like “1.1”, “2.2” and so on. Worldwide, people wait for “Black Friday” and “Cyber Monday.”
Analysts predict that, by 2027, the e-commerce market will be worth over $7.9 trillion. In the Philippines, it is expected to grow to P2.2 trillion by 2028, according to data and analytics company GlobalData.
And as more online stores open, the demand for workers, such as live sellers, website developers and marketing specialists, has likewise risen.
The government plays a crucial role in enhancing the adoption of new technologies and boosting innovation in the digital economy. For instance, the Philippine government has been helping micro, small and medium enterprises (MSMEs) in onboarding sellers online. Through the One Town, One Product Philippines (OTOP PH) program, the Department of Trade and Industry (DTI) has partnered with a Philippine e-commerce and logistics provider to help MSMEs develop and sell their products beyond local markets.
The Philippine government is committed to protecting both consumers and entrepreneurs in e-commerce through the Internet Transactions Act (ITA) of 2023.
Consumers are always reminded how to keep private information, such as bank accounts and contact details, to avoid falling victim to fraud. Businesses equip their online systems with tools that will protect their customers’ cybersecurity.
The e-commerce industry has produced a hotpot of environmental concerns. This is why Unctad is calling on companies, stakeholders, governments and communities to unite in pursuing the goals of ecological responsibility. While promoting safety, reliability and convenience in online shopping, business owners must also prioritize sustainability efforts from the start of production to the delivery of goods to customers.
Consumers can also help by advocating for eco-friendly products and packaging.
To sum up, while online shopping has transformed the retail landscape, it also brings challenges such as cybersecurity risks and environmental concerns. To ensure a positive experience, it is essential for both shoppers and retailers to prioritize safety, sustainability, and responsible practices.
Mai Sigue-Bisnar is a partner for advisory services and the brand & communications & business development leader at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 partners and 1,500 staff members. Connect with us on LinkedIn and like us on Facebook. Send us an email to [email protected], or visit the website: www.grantthornton.com.ph.
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