Ph logistics and eCommerce fertile grounds for funding

The rise of eCommerce and logistics in the Philippines has provided a fertile ground for startup communities to usher in innovations within these sectors. 

The heightened focus of venture capitalists (VCs) and angel investors or funders has fueled a growing interest in recognizing the nurturing of promising products and ventures emerging from logistics and eCommerce.

According to Carlo Chen-Delantar of Pan-Asia VC, a Gobe-Core partner, in the areas of the Business-to-Customer (B2C) market, Filipino startups can develop products that could improve the services offered by logistic companies, riding on to the rapid growth of eCommerce. Despite its potential, only 23 percent of startups are going into the B2C market, Delantar said.

“As our funding landscape matures, we hope to see dramatic improvements in the Pre-Seed to Stage A Startups turnaround times,” said Delantar referring to the growth of startup communities in the Philippines attracting funders.

Delantar who was at the recently held “Geeks on A Beach” held in Panglao Island, Bohol stressed the importance of the Philippines’ startup community to leverage in the booming eCommerce and logistics sector.

He cited that the Philippines has the highest last-mile delivery rates in product deliveries. Notably, promotional campaigns, such as enticing offers for free shipping, have propelled the widespread adoption of eCommerce throughout the country.

Pinoy startups—the new age, a new generation of digital entrepreneurs should take advantage of this development, he reiterated.

During the pandemic over 10,000 micro-small and medium entrepreneurs (MSMEs) transitioned to eCommerce, yet none of them so far became millionaires. Introducing good products to aid the growth of logistics and eCommerce is ripe, he added.

According to the Department of Trade and Industry (DTI), the Philippine eCommerce market could hit US$24 billion by 2025. The country is also poised to further eCommerce growth, with a projected annual increase of 15.8 percent in transaction value from 2022-2025.

By 2025, eCommerce transactions are estimated to reach P495.2 billion or US$9.7 billion, a substantial increase from the nearly P270 recorded in 2021.

Based on a report published by Ken Research, the logistics industry contributes 4 to 6 percent to the country’s gross domestic product (GDP). Because of this, the Philippine logistics market is expected to grow at a compound annual growth rate of 8.2 percent from 2022 to 2027, reaching a market size of P1.160 trillion by 2027.

Despite this progress, the sector still faces significant challenges that could impede its continuous growth. According to the National Economic and Development Authority (NEDA), the country must improve its infrastructure and technology adoption, especially in rural areas, to remain competitive in the global market.