Christy Balita
Research expert covering the Philippines
FMCG market in the Philippines - statistics & facts
Thanks to sari-sari stores located in almost every street or corner across the country, Filipino consumers can buy a five-peso packet of cooking oil, instead of the usual per-liter or gallon quantity sold in grocery stores or supermarkets. This, along with other fast-moving consumer goods (FMCG), are repackaged into smaller quantities to make them more affordable to consumers. While traditional trade remains the main purchase channel, Filipino consumers are no longer limited to in-store shopping thanks to the expansion of e-commerce and the availability of omnichannel retailing. However, rising inflation rates are challenging the purchasing power of most consumers.
While in-store channels remain a dominant form of FMCG retail outlet, the sales value of e-commerce channels for food and beverages registered a three-fold growth between 2019 and 2021. Filipino consumers started shopping through e-commerce platforms such as Shopee and Lazada, not only for essential goods but also for cosmetics and personal care items. Retailers also embraced an omnichannel approach to cater to the changing needs of their consumers. Traditional grocery chains such as SM Supermalls and Robinsons Supermarket started offering online grocery services for their consumers, contributing to the estimated year-on-year growth of the online grocery delivery market in the Philippines.
Meanwhile, recent interest in organic and healthier alternatives has been noted, especially in milk and dairy products as well as snack foods. More than half of Filipinos were willing to spend more on organic food than conventionally grown food products, according to a September 2023 survey.
The FMCG sector in the Philippines has experienced noticeable changes in recent years, with the rise of e-commerce. Online retail channels are here to stay, and more Filipino consumers are likely to use such outlets alongside offline shopping. FMCG spending can also be expected to grow in the following years as the inflation rate eases.
Diversification of retail channels
Since the COVID-19 pandemic, the food and beverage retail scene in the Philippines has undergone significant changes. Traditional and modern trade, such as family-owned grocery chains, convenience stores, supermarkets, and hypermarkets, have long been the preferred channels for fast-moving consumer goods (FMCG). The choice of retail outlet may vary depending on the urgency and volume of the items to be purchased. However, in most instances, convenience stores or sari-sari stores may be more popular due to their proximity and the way they sell basic goods.While in-store channels remain a dominant form of FMCG retail outlet, the sales value of e-commerce channels for food and beverages registered a three-fold growth between 2019 and 2021. Filipino consumers started shopping through e-commerce platforms such as Shopee and Lazada, not only for essential goods but also for cosmetics and personal care items. Retailers also embraced an omnichannel approach to cater to the changing needs of their consumers. Traditional grocery chains such as SM Supermalls and Robinsons Supermarket started offering online grocery services for their consumers, contributing to the estimated year-on-year growth of the online grocery delivery market in the Philippines.
Shifting consumer consumption at the height of inflation
Despite exhibiting positive value growth following pandemic-driven disruptions, the FMCG sector faces another setback as record inflation rates have changed the shopping habits of Filipino consumers. A March 2023 survey revealed that 80 percent of Filipino respondents have felt the pinch of rising inflation, which has affected their ability to pay for necessities such as food and clothing. The increase in the cost of food made people spend more cautiously, checking prices before buying and avoiding unnecessary expenses.Meanwhile, recent interest in organic and healthier alternatives has been noted, especially in milk and dairy products as well as snack foods. More than half of Filipinos were willing to spend more on organic food than conventionally grown food products, according to a September 2023 survey.
The FMCG sector in the Philippines has experienced noticeable changes in recent years, with the rise of e-commerce. Online retail channels are here to stay, and more Filipino consumers are likely to use such outlets alongside offline shopping. FMCG spending can also be expected to grow in the following years as the inflation rate eases.
