Rising smartphone and internet penetration are the major factors contributing to development of business-to-consumer (B2C) ecommerce in the Philippines while the major challenges include payment and logistics infrastructures. Such are the conclusions of a recent report released by yStats.com, a market research company based in Hamburg, Germany.

With a population of over 100 million people and the thirteenth largest internet audience worldwide, the Philippines has a great potential for B2C E-Commerce development, according to the report. Half of the population is under 25 years-old, and are likely to be tech savvy. Although adult internet users making online purchases in the Philippines last year were in the single digits, less than in some other emerging markets worldwide, rising internet and smartphone penetration is expected to boost online shopping.

The main challenges to the robust growth of B2C E-Commerce in the Philippines are underdeveloped payments and logistics infrastructure. The government recently launched a roadmap to overcome these challenges and support the growth of online retail.

Some major trends of the B2C E-Commerce market in the Philippines include mobile shopping, social commerce, and cross-border shopping. A high double-digit share of online shoppers in the Philippines used mobile phones to make purchases online, more than in any other country in Southeast Asia, though mobile commerce was largely limited to the purchase of digital goods and services.

The online audience in the Philippines is one of the most engaged in social networks by global standards, which makes social media an important platform for online merchants. The country’s major online retailer, Lazada.com.ph had over 10 million fans on its Facebook page in the Philippines, ranking second in popularity among all Facebook pages in the country.

Other important players in Philippines ecommerce included daily deals websites Cashcashpinoy.com and Ensogo.com.ph, each of which received substantial investment recently, online clothing retailer Zalora.com.ph, and classifieds website Olx.ph. Popular foreign shopping websites include Amazon, Aliexpress.com and eBay.