MANILA – Today Google and Temasek released a joint study looking at the opportunities in Southeast Asia across six countries by Google and Temasek called “e-conomy SEA: Unlocking the $200 billion opportunity in Southeast Asia.”
The study highlights that the Philippines is a fast-growing internet market: In 2004, there were only 7 million Filipinos online, in 10 years, internet penetration hit an impressive 45 million 2 years ago. Currently there are an estimated 55 million internet users and by 2026 it’s hoped that all Filipinos will be online.
This great momentum is good news for local businesses: with The Philippines’ online market is set to grow 34% over the next ten years, to reach $19 billion by 2025, with the majority of the growth coming from e-commerce. The factors driving this are that the Philippines has a huge population with healthy GDP growth and — with 61% of the population owning smartphones vs 39% owning computers — a clear desire to use the latest mobile devices.
Other key findings from the research:
Opportunities for ecommerce: ecommerce is set to grow at 34% CAGR from $5B in 2015 to $9.5B in 2025.
Opportunities for the online travel industry: the Filipino online travel market expected is expected to reach ~$6 billion (~17% CAGR)
Opportunities for online buyers: The number people who buy goods and services online is predicted to grow by 18% annually, or 5X in ten years from 8M to 42M in 2025.
What the Philippines needs to do to seize these opportunities
The report shows that while the opportunities are great for the Philippines, the country needs to overcome a number of key challenges including logistics and connectivity; complexity of payments; market readiness; fraud and cybersecurity — with most pressing need being investment.
Ken Lingan, Country Manager of Google Philippines, commented, “With all of the advantages that the internet brings with it, there’s never been a better time to start a business in the Philippines. And the opportunity for Pinoys to fully embracing digital is enormous: $19 billion. This will be driven by a combination of a growing population, increased income per capita, more smartphone usage. Online shopping is going to get easier and more commonplace in an archipelago like the Philippines, as more Pinoys discover the convenience of shopping online. Already there are great examples of Filipino businesses and startups leading the way in Southeast Asia and beyond. At Google we’re committed to helping businesses like them — from the largest e-commerce players to the smallest local stores — reach new customers in the Philippines and around the world.”
In main image are Minette Navarrete, president of Kickstart Ventures, and Google Philippines Country Manager Ken Lingan during the presentation of the Temasek Report.