Startup communities have found fertile ground to bring in innovations within the logistics and eCommerce in the Philippines, thanks to the growth of these industries.
Ph logistics and eCommerce
An increasing number of people are interested in identifying and supporting potential goods and enterprises coming out of logistics and eCommerce, thanks to the increased attention of venture capitalists (VCs) and angel investors or funders.
A Gobe-Core partner, Carlo Chen-Delantar of Pan-Asia VC, claims that Filipino entrepreneurs may create goods in the business-to-customer (B2C) space that enhance the services provided by logistics firms while capitalizing on the explosive expansion of eCommerce. According to Delantar, just 23% of firms are entering the B2C industry, despite its potential.
“As our funding landscape matures, we hope to see dramatic improvements in the pre-seed to stage A startup turnaround times,” said Delantar, pointing to the rise in startup communities drawing investors in the Philippines.
Attending the recent “Geeks on a Beach” event on Panglao Island, Bohol, Delantar emphasized the value of the startup scene in the Philippines as a resource for the expanding eCommerce and logistics industries.
He mentioned that the greatest last-mile delivery rates for product deliveries are seen in the Philippines. Interestingly, marketing initiatives with attractive incentives like free delivery have contributed to the nation’s massive adoption of eCommerce.
He emphasized that a new generation of digital entrepreneurs and Pinoy startups, the new age, had to capitalize on this trend.
More than 10,000 micro, small, and medium-sized businesses (MSMEs) switched to eCommerce during the epidemic, yet none of them have yet to become billionaires. He went on, “The time is right to introduce quality products to support the growth of logistics and eCommerce.”
The Department of Trade and Industry (DTI) estimates that by 2025, the Philippine eCommerce industry will reach a value of US$24 billion. The nation is also expected to experience significant growth in logistics and eCommerce, with an estimated 15.8% annual rise in transaction value between 2022 and 2025.
eCommerce sales are predicted to expand significantly from the P270 reported in 2021 to P495.2 billion, or US$9.7 billion, by 2025.
According to a survey released by Ken Research, the logistics sector makes up around 4 to 6 percent of the nation’s GDP. As a result, the Philippine logistics industry is expected to grow at a compound yearly growth rate of 8.2 percent between 2022 and 2027, when it is projected to reach a P1.160 trillion market size.
Despite these developments, the industry still confronts significant challenges that may prevent it from expanding further. The National Economic and Development Authority (NEDA) claims that in order for the nation to be competitive in the global market, it must enhance its infrastructure and increase the adoption of new technologies, particularly in rural regions.
