Every year, people plan decorations, delicacies to prepare and endless celebrations for Christmas. Aside from celebrating the spirit of togetherness and expressing gratitude for the blessings of the year that has been, gift-giving is among the highlights of the holiday season.
Amid the Christmas rush, people make time to buy gifts for their loved ones. Some go gift-hunting as early as September to avoid the bumper-to-bumper traffic and jampacked shopping malls. While for some who only have time for last minute shopping will “add to cart” their gift list on e-commerce platforms.
The new shopping era
The rise of e-commerce started just months after the World Health Organization declared COVID-19 as pandemic in 2020. Most governments in different parts of the world imposed restrictions on the mobility of citizens to safeguard them from acquiring the deadly disease. With these regulations, the era of online shopping boomed as consumers were forced to buy essential goods such as groceries, health products and even items for starting new hobbies at the convenience of their homes.
Since then, online shopping has shaped the post-pandemic world. In 2016, business 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.
Meanwhile in the Philippines, e-commerce sales in 2012 were at P79 billion, based on the 2012 Census of Philippine Business and Industry. A decade later and because of the pandemic-induced e-commerce, it grew to more than P991 billion as reported by the International Trade Administration.
E-commerce: Convenience, at what cost?
While it is evident that the rise and evolution of e-commerce in the past years has significantly contributed to offering a comfortable and efficient way to meet consumers’ needs, it also opened a Pandora’s box of negative impacts on cybersecurity and the environment.
In 2023, credit information company TransUnion found that many Filipinos were concerned about falling victims to fraud through online shopping. One example is scammers pose as legitimate online sellers which then trick customers by sending products different from what they ordered.
Shopping online poses several threats to the environment as well. In 2019, global data and business intelligence platform Statista said that approximately 2.1 billion pounds of plastic packaging were used in the e-commerce industry. They also projected that this would double to 4.5 billion pounds by 2025.
Is online shopping still relevant?
Given these growing concerns in cybersecurity and negative implications on the environment, is online shopping still relevant this Christmas season?
The answer is yes. Kantar Philippines reported in October that more Filipinos are going holiday shopping online as they find it more convenient to buy gifts and essentials rather than heading out to malls and physical stores. The shift in purchasing through e-commerce platforms has been fueled by many factors and these are some of the reasons why it will remain relevant in the many years to come.
Improved customer experience
Retailers now have the capacity to equip their online stores with 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.
With online shops becoming more tech-savvy, people now can try on shoes and even cosmetics without leaving the comfort of their homes through AR. Customers can also match expenses with their budget as e-commerce gives them the liberty to compare different prices of items on different shopping platforms.
Frequent sales day
What makes people shop more online is the frequent sales events. For one, two of the leading e-commerce platforms in the Philippines introduced monthly sales like “1.1”, “2.2” and so on. Worldwide, people wait for “Black Friday” and “Cyber Monday” sales as items are sold on major discounts.
In addition to these highly awaited sales events, consumers also shift to online shopping not just because of the convenience of door-to-door deliveries but also because of free shipping deals. According to the 2024 Southeast Asia Retail Report by e-commerce platform Shopify, Filipinos consider free shipping a “must-have” when buying from online retailers since this means bigger savings.
Opportunity for growth in business
In this era of digitalization, businesses have also adapted to fast changing technologies. Retailers can now expand their sales strategies beyond brick-and-mortar stores through e-commerce. Experts predict that by 2027, the e-commerce market will total to 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.
This rapid growth in the e-commerce industry is among the reasons why experts encourage retailers to set up online stores across multiple e-commerce platforms which could be an opportunity to generate higher sales for businesses. And as more online stores opened, the demand for workers such as live sellers, website developers, marketing specialists and the like rose as well.
Governments’ support for e-commerce
The government plays a crucial role in enhancing the adoption of new technologies and boosting innovation in the economy. For one, the Philippine government helped Micro, Small and Medium Enterprises (MSMEs) in onboarding sellers in the e-commerce industry. Through the One Town One Product Philippines (OTOP PH) program, the Department of Trade and Industry partnered with a Philippine-based e-commerce and logistics provider to help MSMEs in developing and selling their products beyond local markets.
Additionally, the Philippine government is also committed in ensuring the security of both consumers and business in conducting online transactions through the Internet Transactions Act of 2023 (ITA).
Staying relevant while being responsible
While e-commerce has created a better shopping experience for customers and provided ways for businesses to increase their brand awareness and generate higher sales, it is important for both retailers and consumers to also consider the downside of e-commerce.
Consumers must be aware of how they can safeguard their private information such as bank accounts and contact details to avoid falling victim to fraud. While businesses must equip their online systems with tools that will protect their customers’ cybersecurity.
The e-commerce industry has produced a hotpot of environmental concerns. That is why the United Nations Conference on Trade and Development (UNCTAD) is calling on companies, stakeholders, governments and communities to unite in being ecologically responsible. While innovating in the betterment of consumer experience, businesses must also prioritize sustainability efforts from the start of production up to the delivery of goods to customers. Consumers can also drive this change by advocating for eco-friendly products and packaging.
In conclusion, online shopping continues to thrive, offering convenience and growth opportunities for both consumers and businesses. While it 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. By doing so, we can continue to enjoy the benefits of e-commerce while celebrating the holiday season in a thoughtful and eco-friendly way.
As published in The Manila Times, dated 25 December 2024
