Fashion, with its multifarious styles and price tag, is unsurprisingly the most popular category for online retail in the world. 58% of global internet users have purchased at least one product under the category.

And the Philippines is not exempt from this trend. By 2021, the country is expected to see 48.8 million Filipino shoppers partake in online fashion sales.

Chris Zhao spotted this opportunity early on and in 2008, he launched Dress.PH to offer apparel online — at a time when not even Rocket Internet’s Zalora existed.

Why the Philippines?

Before building Dress.PH, Chris was already selling clothing to the US and Europe from China but he saw that these developed markets were experiencing a slowdown as they became more competitive and customer spending was downturning.

The inspiration for Dress.PH came after a vacation in the Philippines, where Chris had to buy an overpriced swimming suit because there was no other good alternative. Back in 2007, there weren’t many channels to find affordable and fashionable clothing.

“After returning to China, I did my research on the Philippines and the shopping behavior,” said Chris. “What I found convinced me to consider Southeast Asia as the right destination for my business.”

Compared to Thailand and Indonesia, the Philippines’ low competition and shared time zone with China made the market a perfect destination.

After one year spent understanding the market, Dress.PH was born.

Importance of affordable fashion for Filipinos

“Filipino shoppers behave more or less like the Chinese but with a lower level of income. I always knew price was an integral factor in their shopping decision,” revealed Chris.

Indeed, most of the population sits in the lower end of the income spectrum according to the latest data from Euromonitor and this means prioritization of price before brand recognition.

By setting up and sourcing products directly from the manufactures in China, Chris was able to lower his operation costs and sell cheaper apparel – a philosophy that has stuck with the company for the last 10 years.

The price for the clothing on Dress.PH ranges between PHP240 – PHP1,400 or $4.80 – $28.

Dress.PH also offers a wide range of categories for casual or formal occasions with the highest price no more than PHP1,800 or $36.

Building a path to conversions

Setting up the business wasn’t the hardest part of the journey, according to Chris. His previous experience selling to the States and Europe allowed him to quickly set up operations without any significant problems.

The small Dress.PH team currently consists of three employees in Manila and seven in Beijing, including Chris. Operations are also outsourced to local service providers such as aCommerce.  

So it wasn’t operations that caused concerns, it was another factor common to other markets in Southeast Asia – customer trust.

“The market isn’t as mature as the US or China and it took a while for Filipinos to feel confident in making a purchase on our website so we created the wish list feature so they could come back to a favorite item.”

“From our internal analysis, it’s usually on the fourth visit that the conversion happens.”

Data from SimilarWeb reveals that the website has more than 86,000 monthly visitors on average and unlike other ecommerce sites, more than 65% of visitors access the site through a desktop.

Dress.PH the Philippines

Chris also shared that Dress.PH recorded 3,800 transactions on its website last month. Approximately a 4% conversion rate – which was approximately the global average for desktops in 2016.

Dress.PH the Philippines

Walking down the aisle

Another factor to consider in fashion was staying relevant to shoppers. Chris continually expanded the company’s product selection to include a larger assortment of dress styles and the latest category addition is surprising online – Wedding Dresses.

“I noticed that the price of wedding dresses in the Philippines is very expensive. The cost of an average unbranded one starts at PHP 7,000 ($140),” says Chris. “I believe we could sell it for much cheaper with the same quality.”

True to his word, Dress.PH began offering wedding dresses on the site three months ago and the featuring gowns were priced as low as PHP 2,321 or $46.50.

Dress.PH the Philippines

According to Chris, China produces 80% of all wedding dresses around the world – Dress.PH included. The company’s products take 14 days to create before they’re sent to the warehouse in Manila and sold online.

“We started with 30 designs on the website in the first month and sold five dresses that same month,” Chris added. “Right now, there are 221 designs on the website and 500 dresses were sold last month.”

An ambitious future for Dress.PH

After almost 10 years in the Philippines, Chris revealed that he’s eyeing expansion to another country mid next year – a high contender being Thailand.

“I need to do my due diligence first and visit the country to get a feel of the market. I know that competition is fierce in Thailand right now and there is also a language barrier to consider — which I didn’t experience much in the Philippines,” expressed Chris.

Chris will have his hands full in the near future as he’s planning to improve the platform’s user experience by consolidating the quality of the product pictures and adding videos. The site will also introduce a “Men’s” category next month to offer rubber and basketball shoes.

“There is a potential market here for affordable Men’s shoes and after doing research, I could probably sell it as low as PHP700, where it is around PHP1,000 online right now,” said Chris.

This small company in the Philippines definitely knows how to seize an opportunity.

Dress.PH Filipino Fashion

Chris Zhao (the third from the left) and the team of Dress.PH in Beijing.

Consumers around the world like a good bargain, but in Southeast Asia and particularly in the Philippines, companies are entering price ways to win customers and gain loyalty. As beauty and personal care in The Philippines is expected to increase by 3% CAGR in the next five years, the sector is preparing to capture the advances in disposable income through campaigns promoting a comfortable and better lifestyle.

Social media has not only provided a channel for brands to reach a younger audience but has also increased the sophistication of beauty product buyers as they are exposed to global trends and products advertised on Instagram and Facebook content.

The influence of global brands have an advantage here as their established names are very much highly regarded by locals as they are correlated with a more upscale look and feel in developing economies.

For beauty brands looking to build a bridge to millennials, digital integration is not only recommended but necessary.

In 2016, the rise of e-retailers such as Sephora online, Zalora, GlamourBox and BeautyBar Philippines encouraged major brands to jump online. An example is Avon Cosmetics’ change in distribution after launching on Zalora last year; the company previously sold only direct to consumer (MLM) exclusively through offline sales representatives.

Avon shop-in-shop on Zalora PH

GlamourBox PH is a multi-brand marketplace

Brands are also selling on beauty specific marketplaces such as GlamourBox and taking a lesser approach to their own branded site in The Philippines. The ability to buy makeup from multiple retailers is nurturing ecommerce behavior in the country.

Imagine is a shopper lands on MAC cosmetics Philippines website – it isn’t equipped for ecommerce, merely a catalogue – and how frustrated they will feel when they learn that ordering online isn’t possible.

MAC Philippines’ website directs consumers to an offline store, not an online checkout

As price consciousness in the Philippines is still a major factor in any type of purchasing, Euromonitor notes that global brands can leverage their own web stores to implement an installment payment scheme as it attracts consumers who refrain from buying at offline store retailers because they automatically need to pay for the items in full.

Workers aged 30-34 claim the highest average gross income levels in the Philippines. And as the relatively young population is set to see a surge of middle class households – especially the single person household – for the next 13 years, strong growth is predicted for the following industries: clothing, footwear, hotels and transport.

Despite an increase in the middle class, the social class E (lowest income class) still remains dominant and represents a bigger market for low cost food, housing and apparel.

The impact of the increasingly affluent Filipino shopper should not be overlooked by global brands as the current focus of many companies is trained on larger markets like Indonesia and Thailand. Traction in the market could easily be tested through a social media campaign as Zara did for Thailand as Filipinos are highly active on social channels. The best way to reach new consumers is through a channel they are already highly active on.


Zara Thailand announcement of online shop on Facebook.

Japanese clothing brand Uniqlo and Nestlé are two global brands that stand out in the Philippines through social media campaigns to attract the country’s almost 40 million Facebook users, a number that is expected to jump to 47.5 million next year.

Nestlé’s Facebook rewards scheme that was launched in 2011 encouraged followers to invite friends to ‘like’ the page in order to win points and prizes. The coffee brand also sells on Lazada and incentives shoppers on Facebook with discounts and promotions.

Earlier this year, Nestlé was awarded by Youtube for releasing one of the most popular Youtube ads in the Philippines. Some other popular campaigns include: 

Youtube Ads Philippines

Uniqlo, on the other hand, has been speedily launching offline stores in popular shopping locations but does not currently offer ecommerce in the Philippines. The company’s recent and successful launch of its shoppable website in Thailand could persuade the brand to move forward with a similar strategy as the markets share similarities. 

The Philippines often comes second by various factors when compared to its peers in Southeast Asia. It’s the second most populous country in the region after Indonesia with 103 million civilians. It’s also the second poorest country after Vietnam and currently has the second smallest ecommerce market at $0.5 billion.

Google & Temasek predicted a rosy future for the Philippines’ ecommerce market to become bigger than that of Singapore, Vietnam and Malaysia by 2025 at $9.7 billion.

However, there are several signs indicating online retail has a long way to go before it picks up in the country:

  • Low ecommerce spending
  • Lack of local ecommerce players
  • Slow internet

Can the Philippines’ ecommerce actually reach its predicted potential? We take a deeper look at some of the reasons why it will be challenging.

First, the good things

The Philippines population is projected to increase by 13% to 116 million by 2025, presenting a bigger market for businesses to sell their products.

Beneficial for ecommerce growth is also the 10 million Filipinos living and working overseas.

Around 3.5 million of them work and live in the US, which has advanced their online shopping behaviour and paved the way for innovative cross-border logistics businesses offering deliveries from the US to the Philippines.

Overseas workers have also facilitated the birth of many digital payments businesses in the country as they send remittances home to their family.

Filipino overseas workers sent home $29.7 billion in 2015.

These money transfers have made the Philippines the top third remittance-receiving country in the world after India and China and spurted the growth of fintech startups providing transfer services, such as Ayannah,, BloomSolutions, using blockchain technology to serve the unbanked.

The innovative payments and logistics solutions work in favor for ecommerce development as online companies are dependent on the ease of payments and the efficiency of logistics networks for speedy delivery to attract customers.

As a result, Lazada, the Southeast Asia’s marketplace for everything, ranks as the 7th most visited website in the Philippines.

No money, no honey?

Despite the mentioned factors, ecommerce has not yet picked up as quickly in the Philippines as it has elsewhere in Southeast Asia. Although 30 million people reported shopping online in 2016, the Philippines has the lowest average annual retail ecommerce spending per person.  

A Filipino spent on average $33 shopping online in 2016.

Even the Vietnamese, who are the poorest of Southeast Asian nations spent 67% more per person shopping online and Malaysians with two times less online shoppers spent twice as much as Filipinos in 2016.

According to Statista, people shopping online in the Philippines are expected to increase by 42% to 48.8 million in the next five years and the average annual spend on ecommerce per person will reach only $48 in 2021.

For comparison, the Vietnamese are expected to spend on average $96 and Malaysians – $129 in 2021.

Where are the local players?

Low online spending per person is not inspiring local businesses to invest in ecommerce  as seen by presence of a few local ecommerce players.

The Philippines is a market where Southeast Asia’s darling Lazada is dominating ecommerce with around 40 million monthly visits.

Local ecommerce players, be it marketplaces or vertical webstores, are not even close to Lazada in terms of number of visitors.

And overall, the competition is rather thin in any category but more brands are working to capture the growing ecommerce potential.

There are a few first movers that are choosing a full ecommerce strategy such as local telecommunications service provider Globe Telecom and retail brand Bench, or global brands Payless ShoeSource and Adidas, and performing quite well. It’s also common for traditional brick-and-mortar retailers such as SM Store to open a shop-in-shop on Lazada to test the ecommerce waters first before investing in a strategy.

Slow and slower

Filipinos are connected to and browsing the second slowest internet connection in the Asia Pacific region. While a speedy internet doesn’t guarantee strong ecommerce behavior, it does impact a good user experience. Who would be willing to browse for a new phone or a pair of shoes if it takes ages to load pictures and product descriptions?

On top of this, the country ranks lowest among its Southeast Asian neighbors in terms of ease of doing business because of slow and complex procedures of starting a business, enforcing contracts and protecting minority investors, which doesn’t help to boost online trade either.

So how to reach its golden potential?

While the large population, familiarity with cross-border deliveries and digital payments offers a great foundation for ecommerce growth, projections of its future market growth greatly vary.

Statista projects the Philippines ecommerce will reach only $2.345 billion in 2021 making the country the smallest of markets in Southeast Asia, while Google and Temasek expect the market to be $9.7 billion by 2025.

The difference will depend on the number of first-movers that kick off the snowball effect.

Recently Ayala Group, one of the largest conglomerates in the country, acquired a 49% stake in online fashion retailer Zalora Philippines. The group hopes its footprint in banking, real estate and telecommunications will generate synergies throughout the ecommerce value chain.

If the takeover proves successful, it could inspire others to follow and contribute to ecommerce growth.

To increase ecommerce growth in the country, there are several things needed to be done. Some of the issues are up to the Philippines government, such as increasing the internet speed by breaking the existing telecommunications market duopoly and opening it up to competition or easing the company registration process.

There are few things businesses themselves can also do to add to the growth:

  1. Invest in market education to explain how ecommerce works and provides convenience
  2. Training workshops for small and medium sized sellers, as well as larger traditional players can nudge more businesses to explore different channels for sales
  3. Improving security of their sites and adding secure payment methods to build trust   between businesses and consumers concerned about fraud
  4. Attract more customers online by selling ‘lifestyle’ services, insurance, etc.

The collaborative effort in the entire ecosystem between brands, retailers, service providers, logistics players, marketing agencies, consumers, etc. will help take the Philippines ecommerce market to the billions.

By: Aija Krutaine

Philippines ecommerce landscape

The Philippines, although part of Southeast Asia’s growing ecommerce family, is quite the odd cousin. It’s the only market in the region where Lazada totally dominates the competition, getting around 35 million visits per month with no second player in sight. In addition, with over 10 million overseas Filipino workers and 3 million of them in the United States, Philippines’ online shopping behavior has been heavily influenced by the US, paving the way for innovative cross-border logistics businesses.

As the second most populated country in Southeast Asia with around 100 million residents, the Philippines currently has the second smallest ecommerce market. But that’s not surprising when 46% of the population are connected to and browsing the second slowest internet connection in Asia Pacific region. On top of that, the country ranks lowest among its Southeast Asian neighbors in terms of ease of doing business, which doesn’t help to boost its online trade either.

However, there’s a bright side. Ecommerce in the Philippines is on a runway and expected to lift off to reach nearly $10 billion by 2025 outsizing Singapore and Malaysia. How developed is the market now? ecommerceIQ shares ECOMScape: Philippines to provide a quick snapshot.

1. Lazada dominates over local and regional B2C marketplaces

Lazada, Southeast Asia’s heavyweight of marketplaces controlled by the Chinese ecommerce giant Alibaba, is leading online shopping in the Philippines. It currently ranks as the 7th most popular website in the Philippines. More than 60% of Lazada’s sales in the country come from mobile devices. The marketplace has also doubled the number of merchants selling goods on its platform to 4,000 compared to a year ago.

Philippines ecommerce landscape

Other local marketplaces in the Philippines don’t come close to Lazada in terms of visitors so have found other revenue streams offering affiliate marketing or cashback through their platforms. Takatack, calling itself one the biggest discovery platforms in the Philippines, is one such example. It is both an online marketplace offering products and services from local ecommerce shops and at the same time features products from different ecommerce sites such as Zalora and Galleon.

Marketplace verticals also show potential for growth. The usually competitive Fashion & Apparel category is rather thin in the Philippines. Zalora, online fashion shopping destination focused on Southeast Asia, operates in the country. A small number of global brands have local online stores and only a handful of local merchants sell online meaning the space is wide open for new players.

Philippines ecommerce landscape

Other verticals, such as Electronics & Gadgets, Home & Living, Others, also aren’t too crowded indicating there is room for more sellers.

Yet, Phillipines’ online scene might not be too easy for foreigners to conquer as learned by Thailand’s online retailer iTrueMart. At the end of 2015 it opened online store in Philippines as their first point of expansion out of Thailand but eventually closed the shop in September 2016 after less than a year in the country.

2. Retailers test ecommerce waters through Lazada

The Philippines’ ecommerce market in 2015 was estimated at $0.5 billion or 0.5% of retail in the country as many brands and merchants were not yet committed to making the big investment of opening a full-fledged online store.

However, to test market potential, some traditional brick-and-mortar retailers are opening their shop-in-shops on Lazada. For example, popular local department store chain SM Store initially went online through a shop-in-shop on Lazada where it offers more than 4,000 items. It now has also its store, powered by Lazada.

Consumer electronics retailer Robinsons Appliances also partnered with Lazada in mid-2015 by opening an official shop on the popular marketplace. Even global brands like Samsung are adopting this strategy.

More brands and sellers will likely follow in these steps to tap online shopping opportunity and add to Lazada’s popularity.

3. C2C ecommerce thrives

Similar to other Southeast Asian countries, a consumer-to-consumer (C2C) market makes up a significant part of online shopping in the Philippines, likely at around one third of the ecommerce market as it is Indonesia.  

OLX is the largest platform for classifieds and peer-to-peer sales. Ranking as 17th most popular website in the country it started as 10 years ago. Currently, it claims to attract 100,000 to 200,000 new sellers every month.

Philippines ecommerce landscape

In 2016, two other well known C2C marketplaces in the region – Shopee, supported by Southeast Asia’s largest gaming company Garena, and Singapore-based Carousell – entered the Philippines to fight for Filipinos’ hearts and wallets. Shopee’s strategy to lure sellers from Instagram and other marketplaces to its platform by offering merchants free shipping and cash on delivery in the Philippines increased the number of sellers by 40% and the number of listings sold on the app – by 60% within three months.

Philippines ecommerce landscape

As 55% Filipinos own a smartphone and 18% have made a purchase online via mobile, it comes as no surprise that Shopee and Carousell are betting on the Philippines as their next stop for growth.

Another driver of the C2C market is the Filipino preference of Western brands combined with limited options to buy them as international brands have started entering the country just recently and there still remains a significant number of underserved market segments. This fuels selling of popular brands on C2C marketplaces, where products usually don’t come directly from manufacturers but are obtained elsewhere.

4. Digital payments pick up

Around 70% of the Philippines’ population are unbanked and less than 3% of Filipinos use a credit card to make payments. Thus, opening an online store without a cash-on-delivery payment is not really an option in Philippines.

In the recent years, several new mobile wallet apps have been introduced first by local telecommunication companies. For example, PayMaya mobile wallet app and GCash app offer a virtual card for shopping online that can be topped up at various offline points throughout the country. Local banks are also launching mobile banking apps.

Philippines ecommerce landscape

Many of country’s fintech startups are attaining to the needs of the unbanked while also serving overseas Filipino workers who send remittances to their relatives. In 2014, two Silicon Valley entrepreneurs Ron Hose and Runar Petursson founded – a mobile blockchain-enabled platform aimed at the unbanked for easy access to financial services. This start-up raised $5 million series A funding just at the end of October, 2016.

Philippines ecomscape landscape

ePeso app allows to create a digital account with an email address, top it up through scratch cards, over the counter facilities and merchants to send and request funds, pay bills. Paylance allows users to pay and transfer money to Philippines through Bitcoin for free. While Payswitch through its web platform allows small enterprises to offer services such as electronic loading, remittances and bill payments.

5. Innovative cross-border solutions and competition among logistics service providers

While ecommerce is not yet in full swing in the Philippines the logistics landscape is dominated by local players like 2GO and LBC while in other Asian countries international players like Kerry Logistics and DHL lead. Several regional players like Thailand-based aCommerce, Singapore-based SP ecommerce and Quantium solutions provide fulfillment services to online sellers.

Philippines ecommerce landscape

Poor infrastructure, difficult geography and high rates of cash-on-delivery make the shipping of online purchased goods complex. While there seem to be plenty of third-party delivery providers, only two companies – 2GO and LBC – offer countrywide shipping. The rest ensure delivery within metro area of Manila. This limits ecommerce growth and leaves many of country’s potential shoppers underserved.

At the same time, overseas Filipino workers have facilitated the development of innovative cross-border shipping solutions for goods purchased overseas. Beyond family members carrying their Amazon orders back in one big “balikbayan” box, several unique cross-border package forwarding services like LBC’s ShippingCart, Johnny Air Plus and have sprung up to take advantage of this phenomenon.

Philippines ecommerce landscape

Click here to download the full, high resolution version of ECOMScape: Philippines and join the ecommerceIQ network for the first look at the next ECOMScape in our series.

For more insights on the region’s ecommerce landscape take a look at:

ECOMScape: Indonesia

ECOMScape: Thailand

ECOMScape: Singapore

Are we missing any key players? Let us know on FacebookTwitterLinkedIn


With enough liquidity, small merchants may serve as cash points in rural parts of Southeast Asia.

With only 23% ATM penetration rate (compared to global average of 70%), reports the World Bank, millions of underbanked individuals in the Philippines do not have easy access to bank branches and ATMs. But a partnership between FEXCO and ENCASH aims to tackle the low ATM penetration rate by turning mom and pop shops into ATM outlets, reported Tech Wire Asia. Imagine, suddenly, a local fruit-stand seller can be a cash point.

The Philippines has only 23.68 ATMs per 100,000 people. With an ATM penetration rate of 23%, far lower than global average of 70%.

In what is being called the “EasyDebit” solution, the plug-and-play tool allows cardholders to withdraw funds from any merchant with the device and downloadable app, which plugs into smartphones and gives cardholders cashback without having to locate an ATM. Cardholders simply swipe their cards, key in their PIN and “withdraw.” Money in the cardholder’s bank is transferred to the merchant’s account, who then gives the cash equivalent to the user.

The solution is meant to be affordable enough for small merchants through a rent-to-own scheme, which doesn’t require minimum balances or transaction amounts. And remittances from Filipino workers abroad to families in the countryside or even urban-to-rural remittances are sparking higher demand for easy cash access.

The company brings down the cost of joining a major ATM network by acting as these banks’ intermediary. FEXCO and ENCASH plan to introduce ‘EasyDebit’ in Cambodia, Indonesia and Vietnam after its initial run in the Philippines.

A version of this appeared in Tech Wire Asia on August 15. Read the full version here.