PHL microentrepreneurs, businesses ride the social commerce wave

By Edg Adrian A. Eva, Reporter

ERICA JOY S. ARGONES, a 25-year-old licensed professional teacher and mother, has turned to social commerce, or selling items via social media, as a side hustle that she considers vital to support her family.

“At that time, live selling was trending… I wanted to help with our expenses — paying bills, buying food, and other necessities,” Ms. Argones told BusinessWorld in Filipino.

She starts her livestreams at midnight and these run until 6 a.m., selling second-hand women’s clothing such as tops and shorts.

A transaction starts when a potential buyer comments during a livestream, and purchases are usually finalized via direct message. Ms. Argones either meets with the customer if they’re nearby or books a delivery rider to send the product.

If she manages to sell all her items, she said she earns nearly double her capital — typically around P6,000 — a modest amount that helps cover other essential expenses for her family.

“Tiyagaan lang talaga sa pagbebenta, kahit inuumaga na ako sa pagla-live (Selling really takes patience, even if I end up staying up until morning doing live selling),” she said.

Social commerce has enabled individuals like Ms. Argones, who, even with limited capital, reach out to a large pool of potential customers and earn additional income.

A Philippine Social Commerce Market Intelligence Report published in April said that more businesses in the country are using social media platforms as their huge number of users offers a sizable potential customer base.

Many Filipino businesses now use platforms like Facebook, Instagram, and TikTok, where built-in commerce features allow them to sell products directly without requiring customers to switch to a separate app, it said.

The report projected that the Philippine social commerce market will grow by 17.2% to $2.3 billion this year from $1.96 billion in 2024, adding that this trend is expected to continue, with the sector expected to expand at a compound annual growth rate of 12.6% from 2025 to 2030, reaching approximately $4.17 billion by the end of the period.

“The social commerce landscape in the Philippines is undergoing significant transformation, driven by the growing integration of e-commerce features into social media platforms, the rise of live commerce, and increasing reliance on influencer partnerships,” it said.

SOCIAL COMMERCE BOOM
Ruben J. Pascual, secretary-general of the Philippine Chamber of Commerce and Industry (PCCI), said that while micro, small, and medium enterprises (MSMEs) are utilizing social commerce more actively, large businesses are also likely to follow suit.

This shift is driven by the digital consumption habits of younger generations, who are expected to have greater purchasing power in the coming years, he said.

“So, these are the major forces in the consumer market right now. And no company, big or small, can ignore such trends,” Mr. Pascual said in a phone interview.

He said that social commerce in the Philippines is already growing at nearly 20% annually and this is likely to double within the next three to five years, adding that this is similar to the trend seen in many countries, including China.

Even legacy businesses that traditionally operate through brick-and-mortar setups are beginning to move into the social commerce space.

Mega Prime Foods, Inc., a 50-year-old local enterprise known for producing one of the country’s leading sardine brands, began leveraging a popular social commerce platform in 2023.

“We further diversified our distribution by venturing into social commerce TikTok Shop, allowing us to engage with a wider, more digitally active audience,” Michelle Tiu Lim-Chan, president and chief executive officer of Mega Prime, said in an e-mail interview.

Since the company began using TikTok Shop, Ms. Chan said they have seen a 150% increase in product reviews and a 30% increase in sales during special promotions, where exclusive deals are offered on the platform.

Social commerce is effective even for legacy brands like Mega Prime as it allows them to connect with a large pool of potential customers who are active on social media, she said.

According to Meltwater, a Norway-based media monitoring company, the Philippines has 90.8 million identified social media accounts, equivalent to 78% of the population.

The country also leads globally in average time spent on social media, with users spending an average of three hours and 32 minutes per day on these platforms.

TikTok Shop integrates entertainment and shopping into a seamless experience, and its “Buy Local, Shop Local” campaign has over 300,000 homegrown sellers, Franco Aligaen, marketing lead at TikTok Shop, said in an interview with BusinessWorld.

“By combining entertainment with commerce, or what we call ‘Shoppertainment,’ sellers are able to build authentic connections and drive discovery,” Mr. Aligaen said.

Sellers can use the platform’s features such as short-form videos, live selling, and affiliate marketing, and these reduce traditional barriers to market access while keeping customers engaged, he said.

TikTok Shop sellers also have access to other in-app tools such as the latest ACE 2.0, which helps them refine their product assortment, create engaging content, and make data-driven decisions to grow their business.

Mr. Aligaen added that sellers with the TikTok Shop Mall badge — a mark given to verified and trusted brands — experienced 2.2 times faster sales growth from January to June 2024.

CUSTOMER TRUST
Mr. Pascual said a key challenge in business-to-customer relationships in the era of social commerce is trust, especially when it comes to product safety.

“It’s always trust. Do you trust the supplier, the seller of these things? Eventually, it’s always the beginning,” he said.

A 2023 survey by Agile Data Solutions, Inc., a Philippine-based market research and data analytics firm, found that trust is one of two key factors influencing the shopping behavior of Filipino consumers.

Out of 300 respondents surveyed, 28% identified product authenticity and quality as their top concerns when shopping online, including through social media platforms. Meanwhile, 17% cited packaging safety and 15% pointed to delivery times as their primary concerns.

The report also noted that 71% of respondents prefer cash on delivery (COD) as their primary payment method to check the quality of their purchases.

Building trust requires businesses to establish strong customer feedback and review systems, Mr. Pascual said, citing how financial institutions use these mechanisms to build credibility.

“The bank will not just brag about its kinds of services, interest rates, et cetera, but they will use one or a few of their customers to attest that this is the kind of service the bank has given.”

Sellers must also have clear return and refund policies, he added. “In terms of policy, Republic Act No. 11967 or the Internet Transactions Act of 2023 signed in December 2023 ensures consumer protection and helps build trust in the growing digital marketplace like social commerce.”

Under the law, online merchants, platforms, and e-marketplaces involved in business-to-customer and business-to-business transactions must provide accessible information and comply with rules on selling only licensed or permitted products.

The law strengthens consumer rights by entitling them to refunds, replacements, or repairs for defective products, usually at no cost to the buyer, while also protecting merchants from abusive practices like “joy buying,” or making purchases and then canceling or refusing to receive or pay for the purchased item, through clear rules on cancellations and reimbursements.

For Ms. Argones, trust is like currency — it determines whether customers are willing to spend, especially when dealing with microentrepreneurs like her. For her part, she said she makes sure that the photos of her products closely match what buyers receive in person.

Meanwhile, she also called for stricter user verification processes on social commerce platforms as sellers sometimes also fall victim to fake buyers.

For social media platforms like TikTok, stringent policies on product safety and consumer trust are also being implemented, said TikTok Shop’s Mr. Aligaen.

“We take a proactive, multi-layered approach to safety through robust seller verification, content and product listing moderation, and strict enforcement of our community guidelines and commerce policies. These systems help prevent violations and ensure only legitimate, high-quality products reach consumers.”

He added that TikTok has also been conducting training sessions for sellers on relevant policies, laws, and regulations, while also helping consumers navigate the platform through awareness campaigns.