Convenience, better prices, and access to extraordinary deals and discounts are the top benefits driving more and more Filipinos to shop online. According to a recent Global E-Commerce Trends Report by J. P. Morgan, almost 40 percent of the population, or close to 45 million Filipinos, now shop online and spend an average of around PHP 8,700 per year. Interestingly, only half of these online consumers have shopped locally, while the other half have purchased from other countries, such as China, the U.S., and South Korea.
The same report also stated that total cross-border shopping sales accounted for almost a quarter of all ecommerce sales in the Philippines in 2020 alone. Because the number of Filipino cross-border shoppers has been increasing exponentially, there’s hardly any doubt that this sales figure is much higher today. Perhaps you’re wondering why more and more Filipinos are choosing to shop from online stores abroad. If so, continue reading, as this piece will discuss five reasons why cross-border ecommerce is becoming more popular in the country.
The Philippines’ De Minimis Value of Imported Goods Is Now PHP 10,000
As its first reform measure under the new Customs Modernization and Tariff Act (CMTA), the Bureau of Customs (BOC) increased the “de minimis” value from a mere PHP 10 to PHP 10,000. That means Filipino online shoppers can now purchase goods valued up to PHP 10,000 from anywhere in the world and ship to the Philippines via air or sea, tax-free.
This is a welcome change for avid shoppers. After all, without duties and taxes, imported products will become more affordable and accessible. Instead of being exclusive to the rich and well-connected who can afford and negotiate hefty customs fees, a higher de minimis threshold (DMT) makes buying from online overseas stores attainable to the ordinary Filipino.
Besides the relief from additional fees, it’s worth pointing out that packages within DMT are no longer subject to regular importation procedures. They are entitled to immediate release by BOC under the law. As such, consumers can receive their purchased goods faster, making cross-border online shopping even more attractive.
Rise in Popularity of Fandom Merchandise
Another reason why cross-border ecommerce continues to flourish in the country is the rising number of Filipino fans shopping for official merchandise, or “merch,” of their favorite international artists. These items range from albums, light sticks, and posters to buttons, t-shirts, photo cards, and more. Most fans collect them in earnest to support their idols and gain bragging rights, while others regard them as an investment.
Perhaps this purchasing behavior is most evident among Filipino K-pop fans. A recent study published in the Ateneo Journals Online found that the passion of Filipino K-pop and K-drama fans is indeed a significant driver of online consumer engagement for pop cultural content consumption, community formation, conversation making, and commerce behaviors. The cost of this “passion” is worth thousands of pesos, proving itself a lucrative market. An article on OneNews.PH reports that Filipino fans of Korean groups Blackpink and Twice spend an average of more than Php 32,000 and nearly Php 40,000, respectively, on merchandise.
Access to Exclusive Brands and Products
Despite the increasing number of foreign brands setting up shop in the country, there are still many products and stores that are only available overseas, such as books and limited-edition beauty products. While some shoppers might ask relatives or friends living abroad to buy these exclusive items for them, many Filipinos are now discovering the convenience of shopping cross-border. Rather than asking for a favor or waiting for balikbayans to return home with their “pasabuys,” shoppers now opt to search for and buy directly from online shops abroad.
Availability of Shipping Services that Allow Filipinos to Shop for Imported Goods More Conveniently
Buying overseas used to be stressful, inconvenient, and expensive. Aside from the long delivery period, with some taking as long as a few months, the shipping fees are often heftier than the price of the items. However, this painful process is no longer the norm. Thanks to shipping companies that offer affordable shipping services to the Philippines, Filipinos can order from thousands of online stores in the U.S. or any other foreign location and have their orders delivered directly to their doorstep at affordable rates.
Shoppers can simply browse their favorite online stores and have their purchases sent to the warehouse address of their chosen shipping company. The company will then receive and consolidate the orders into one package, much like a “balikbayan box,” and ship it to the Philippines. Because of such services, more Filipinos are enjoying shopping overseas.
One of the biggest draws of shopping at international online stores is access to imported products at more affordable prices. Filipinos love a good bargain, and buying direct from the source allows them to gain significant savings and take advantage of exclusive promotions. Branded shoes, laptops, cellphones, and other electronic devices and accessories are examples of foreign goods that many Filipinos buy cross-border to save money.
Cross-border ecommerce is steadily increasing in popularity, and there’s a high chance that this trend will continue in the years to come. After all, foreign brands, retailers, and other online shopping players continue to adapt to the changing needs of consumers and create services to expand their market.