Philippines Courier, Express, and Parcel (CEP) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Philippines Courier, Express, and Parcel (CEP) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The market for Courier, Express, and Parcel (CEP) in the Philippines is estimated to grow at a CAGR greater than 8% during the forecast period.

The COVID-19 pandemic is disrupting global supply chains in unprecedented ways and will have a significant economic impact with GDP contractions in most ASEAN member states, including the Philippines, in 2020. However, due to the COVID-19 outbreak, the use of e-commerce has increased abruptly and sharply. The COVID-19 pandemic will lead to long-term changes, accelerating the shift to e-commerce. Many brick-and-mortar businesses will also evolve, offering services beyond retail, including last-mile deliveries.

The Filipino E-commerce industry has witnessed a moderate rise over the past 5-6 years, with an increase in internet penetration into the country. Escalation in the number of smartphones in the country, fast-growing middle-class population, high consumer confidence, changing consumer preferences, etc., has augmented the growth of e-commerce, leading to surging demand for e-commerce logistics as well in the country. Manila and some other cities, including Central Quezon City, Cebu, and Davao, have emerged as the key hub for demand and supply of e-commerce logistics. The COVID-19 pandemic has also pushed the demand in the market as the need for social distancing has forced people to rely on online shopping. The growth in E-commerce orders for logistics has been majorly driven with an increase in internet affinity and demand for value added services.The growing e-commerce market and continuous retail expansions are driving the demand for last-mile delivery hubs, inner-city distribution centers, cold storage, and warehouse facilities in the Manila region.

Key Market TrendsGrowing E-commerce in the Country

The Philippines is continuing to rely on e-commerce and the digital economy to manage its economic recovery in the aftermath of the Covid-19 pandemic. With brick-and-mortar businesses being hit by lockdown measures, the Philippines’ e-commerce sector has seen a surge in the midst of the pandemic. As a result, the Philippines acknowledges the significance of e-commerce and the digital economy as key engines of growth and economic recovery.

According to data from the Philippine Department of Trade and Industry (DTI), e-commerce contributed 3.4%, or USD 12 billion (PHP599 billion), to the country’s GDP in 2020. The Philippines’ current goal is to increase e-commerce revenue to USD 20.82 billion (PHP 1.03 trillion), or 4.3% of GDP, by 2022, and to USD 23 billion (PHP 1.2 trillion), or 5.5% of GDP, by 2023.

The Philippines government aims to address or reform challenges and barriers that hinder the country's full potential of ecommerce development. Part of the expectations and it is observed that, in the future would be a more systematic government regulation for proper taxation, protection of consumers, and infrastructure improvements.

Some of the popular E-Commerce platforms include Shopee, Lazada, Zalora and Beauty MNL among others.

Growing Transportation and Storage Sector

In 2021, the gross value added (GVA) generated from the transportation and storage industry in the Philippines reached approximately PHP 602 billion. This reflects a significant increase from the previous year's total. The sector was significantly affected by the pandemic but is recovering and is expected to grow further diring the forecast period.

In order to increase efficiency and profitability, warehouse operators are adopting new technology, such as the Automated Storage and Retrieval Systems (ASRS) and adding new services. Additionally, developers are exploring the fringes of Manila and the regions for the next site of their industrial investments, capitalizing on rising demand in various hubs across the country.

With the country’s ever-growing population and the rise of domestic consumption, the Philippine economy continues to expand. Moreover, with the rise of the economy, also comes the rise of the logistics and transport industry. As the production and distribution of goods increase, so does the need to move these items. However, the geographic layout of the Philippines is a complex one, with thousands of islands connected through hundreds of links to form one big archipelago. The trucking sector plays a crucial role in bridging this gap.

Logistics and warehousing are two of the most important industries in the Philippines. Warehousing experienced huge growth, due to a high increase in trade activities in and around the country.

Competitive Landscape

The Philippines CEP market is fragmented and the market is expected to grow during the forecast period due to rapid growth in the E-commerce market, demand for warehouses, and last-mile delivery is increasing and many factors are driving the market. DHL, FedEx, UPS, and LBC Express dominate the market.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Deutsche Post DHL Group
FedEx Corporation
United Parcel Service Inc.
LBC Express Inc.
JRS Express
Philippine Postal Corporation
Citixpress Inc.
XDE Logistics Inc.
2GO Express
J&T Express
Ninja Van
Xend Express
GOGO Express
Air21
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