Digitalisation, urbanisation to drive Philippine retail to $113.31b

Digital payments are preferred by 70% of Filipino consumers

The Philippine retail market is projected to grow from $79.23b in 2025 to $113.31b by 2035, according to Market Research Future. The market was valued at $76.45b in 2024.

Growth will be driven by e-commerce, urbanisation, technology adoption, changing consumer preferences and higher consumer spending.

E-commerce is reshaping shopping behaviour in the Philippines as consumers increasingly turn to online platforms for convenience and accessibility.

Retailers are investing in digital infrastructure and online channels whilsr adopting omnichannel strategies that integrate physical and digital shopping experiences.

E-commerce sales are estimated to account for around 15% of total retail sales in 2025, according to the report.

Artificial intelligence, machine learning, and data analytics are also transforming retail operations and customer interactions. Retailers are also adopting integrated point-of-sale and inventory management systems to improve operational efficiency.

The adoption of mobile payments is further supporting digital retail, with around 70% of consumers in the Philippines estimated to prefer digital payment methods in 2025, according to the report.

Urbanisation is another major driver of retail growth. More than 60% of the Philippine population is projected to live in urban areas by 2025, as per the Philippine Statistics Authority.

Retailers are responding by expanding their presence in urban centres and focusing on convenience, accessibility and broader product assortments.

Filipino consumers are also increasingly prioritising product quality, sustainability, and brand transparency. Around 65% are estimated to be willing to pay a premium for ethically sourced and environmentally friendly products, according to the report.

Retailers are responding through sustainable sourcing and packaging initiatives as consumers increasingly consider environmental factors in their purchasing decisions.

The report also said that health-conscious consumption is supporting demand for organic and health-oriented products, prompting retailers to expand their offerings.

Major retail players are continuing to expand their operations across the Philippines. 7-Eleven is increasing its store footprint, whilst Makati Supermarket and Shopwise are investing in technology to improve supply chains and in-store experiences. Landers Superstore and S&R Membership Shopping continue to attract consumers through exclusive products and promotions.

In pharmacy retail, Watsons and Southstar Drug are expanding their product offerings to meet demand from health-conscious consumers.

Online platforms such as Lazada are also influencing shopping behaviour through discounts and broad product assortments.

Meanwhile, mergers, acquisitions, and expansion strategies are reshaping competition. Robinsons Retail Holdings is seeking to consolidate its market position, whilst Metro Retail Stores Group is expanding its grocery operations.