Online Shopping in 2020 GenZs vs. Millennials: Focus on the Philippines
With a population of 109 million and nearly 80 million internet users, according to Internet World Stats, the Philippines is one of the most 'online' countries in the region.
And Filipinos are so 'online', that the Guardian recently reported that the country topped the world internet usage, with its citizens spending more than 10 hours per day online.
But how are Filipinos spending all these hours online? Are they just surfing, or are they shopping?
To find out, ClickInsights, in partnership with Adobe, recently surveyed consumers across Southeast Asia to learn about the current state of online shopping in the region. Responses were divided into two groups: those aged 16 to 22, also known as Generation Z or 'GenZ', and those aged 23 to 37, the 'Millennials'.
Below are summary results from respondents from the Philippines, representing both generations, which provide insights into the digital behaviour of the country's next generations.
To see results from the other Southeast Asian countries and comparative analysis, please download the full report here: Southeast Asia Online Shopping in 2020: GenZs vs. Millennials.
1) Filipino Millennials are a lot more likely to buy online than GenZs
When asked how often they made online purchases, 1 in 3 (33%) Filipino Millennials said they buy online every week and only 15% GenZs said the same.
Moreover, more than 2 in 5 (41%) of GenZs only use ecommerce a few times a year, compared with around 1 in 4 (26%) Millennials.
There is little doubt that this difference in online shopping frequency is related to age and income. As GenZs mature, it is likely they will adopt the shopping behaviours of the older generation - but for now, the younger generation are doing more surfing than shopping.
2) Millennials in the Philippines outspend GenZ in every category
Because Millennials shop online so frequently relative to GenZs, it is not surprising that they spend more via ecommerce as well. In every category, Millennials were around twice as likely as GenZs to have spent the local equivalent of US$100 online in 2019.
The spending difference was particularly noticeable for travel, shoes and beauty product with Millennials being many times more likely to make major purchases than their younger counterparts.
Millennials, for now at least, seem to be the best bet for brands seeking to sell online to young consumers in the Philippines.
3) In the Philippines, Facebook is king
One notable difference between online shoppers in the Philippines and other countries in the region is that, for both generations, Facebook remains the most popular social network by some margin.
When asked on which digital platforms they spend more than 30 minutes per day, more than 8 in 10 Millennials and 7 in 10 GenZs replied Facebook. Instagram, typically more popular with GenZs than Facebook was used by less than half (45%) of the younger generation and even less (38%) of the older.
It's not clear why Instagram has failed to make as much of an impact with GenZs in the Philippines as it has elsewhere. Perhaps it is simply because Facebook has such high adoption rates in the Philippines that the platform has become more than a social network - it is now an essential communications platform in the country.
Regardless, marketers targeting younger Filipinos should take note of this result and rebalance their social media platform spending appropriately.
4) Filipino shoppers flock to YouTube
While Google is the most popular (81% Zs, 82% Ms) spot for shoppers to research future purchases, YouTube is a close second. Around 7 in 10 Filipino GenZs (71%) and a nearly equal number of Millennials (69%) frequently search the video site for product info and reviews.
This is significantly more than those who use social media for the purpose (54% Zs, 59% Ms) indicating that Google has the best properties for reaching the younger generations in the Philippines.
Interestingly, 'other websites' are used far less frequently, though GenZs are more likely to start their shopping journey outside of Google and social media than Millennials.
5) Online shoppers in the Philippines pay using cash on delivery
Perhaps the most surprising result was the Filipino online shoppers’ response to the question, 'What payment method do you use when shopping online?'
Overwhelmingly, both GenZs and Millennials use cash on delivery to pay for their online purchases. Credit cards and E-wallets are starting to gain acceptance but are still used by fewer than half of Millennials in the country and only around 1 in 5 GenZs have an alternative online payment method.
The reason for this lack of adoption of electronic payment methods is that, according to the Philippines central bank report, 77% of Filipinos remain unbanked.
Brands seeking to develop direct relationships with young consumers in the Philippines, then, are advised to approach local logistics companies for advice on how to best manage payments in the country.
6) Millennials much more optimistic than Zs about the future of ecommerce
When asked whether they would spend more money online in 2020 than in 2019, Millennials replied with a resounding 'yes'. More than 2 in 3 (68%) of the older generation said that their spending will rise in 2020.
GenZs, however, seemed much less sure. Just over half (53%) said they would which is among the lowest positive response for the whole SEA region.
It is possible that because they have just started their careers and are not yet using digital payment that ecommerce isn't as appealing to GenZs in the Philippines as it is to others in the region.
Still, for brands seeking to reach a portion of the 80 million internet users in the country, Filipino Millennials are active, interested and optimistic online shoppers - so marketers looking to grow revenue in the country, for now, focus their efforts on the older, 'young' generation there.
To learn much more about the generational differences in online shopping behaviour across Southeast Asia, please download the full report here: Southeast Asia Online Shopping in 2020: GenZs vs. Millennials.