THE digitalization that is expected to spur the country’s young workforce to drive consumption by 2030 will be accelerated by the pandemic, a report from the World Economic Forum and Bain & Company said.
The “Future of Consumption in Fast-Growth Consumer Markets: ASEAN” report released in June showed the Philippine median age will be 29 by 2030, creating a young consumer base that will discover products on social media and spend online.
“The combination of an expanding workforce, low labor costs and the potential for productivity gains is highly attractive for investment and growth,” the report said.
The pandemic is hastening this shift, with older generations previously resistant to digital consumption now forced to buy groceries online.
“This is the first step to triggering an irreversible change in channel preferences, opening new consumer markets and increasing the share of wallet from existing e-commerce consumers.”
E-commerce company Lazada Philippines said it has been adding three times more sellers daily onto its website during the lockdown compared with the previous months.
Mall foot traffic, in mid-July, remained below 50% even as restrictions were easing, the Trade department said. Metro Manila and four other areas have since shifted back to a stricter lockdown after coronavirus disease 2019 (COVID-19) cases surged to over 100,000.
The report said online platforms offering entertainment and transaction services will converge by 2030, with e-commerce offering more entertainment to create social or content-driven shopping.
The pandemic, the report said, has weakened consumer confidence, although essential products will see a temporary spike in demand and healthy snacks, food delivery, and hand sanitizers will see higher demand “even post-recovery.”
A significant number of consumers are expected to hold back, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said last month, as they continue to take precautions amid a fear of the disease.
Consumption is the main driver of the Philippine economy, making up 70% of the gross domestic product (GDP).
Digitalization will also require millions to be reskilled as automation reduces employment in labor-intensive sectors, the report said.
“High-skilled jobs will be in demand and at least 43 million people will need to be reskilled in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Viet Nam.”
Trade Undersecretary Rafaelita M. Aldaba has said that the pandemic could lead companies to modernize and automate their operations to survive. — Jenina P. Ibañez