Cailao Marylle Joie S.
BS-Accountancy- ACT223
I.
April 25, 2023
Prof. Azelle Charese A. Tayson
Introduction
Does e-commerce have a big impact on the economy? E-commerce has altered the way many
organizations conduct business. To them, online shopping is currently an imperative rather than a
choice. In the past few years, the growth of e-commerce has been high, especially since the
pandemic started. And as the days go by, we see that the growth of e-commerce, or online shop
businesses, really helped us survive at this time of pandemic. As it continues to grow, it really
changes the dynamics of supply and demand here in the Philippines. We can see that as it
continues to become popular, it gains more demand because this online shop app offers lower
prices and vouchers that encourage people to buy the products and services. The higher the
demand, the higher the possibility that it affects traditional brick-and-mortar businesses. Ecommerce really changes how markets work and makes every business think smarter as the
world continues to develop. During the third quarter of 2022, 61 percent of respondents in the
Philippines stated that they purchased a product or service online (Statista Research
Department). E-commerce is more than just a technique to maintain or improve the current
business processes. It is an innovative idea or technology that is completely changing the way
that business has traditionally been performed.
II.
Argument in Favor
As this world continues to develop, we become modern, and the spread of technologies and
the internet are now popular. It became part of our everyday lives. People think smart when they
start businesses using technologies with the power of the internet. In fact, we can’t deny that the
growth of online shopping in the Philippines has significantly altered the way supply and
demand work. Many people are now availing products and services in online apps since they
offer a lot of discounts and vouchers and are also convenient to use. As a result, demand gets
higher, and many suppliers are encouraged to supply more products because many people will
purchase the products and services. Many businesses tend to produce more products than they
think people will buy. Aside from that, since most people are now on the internet, when there’s
something on trend, people will buy the product, especially since the most Filipino online
shoppers are Gen Zs and Millennials (Statista Research Department), so the demand gets high,
and since the supply might be sold out, businesses will want to produce supply. And even though
the prices are high, the demand still gets high since people are into it. It is stated on the
onenewsPH website that on iPrice’s platform alone, Filipinos now spend about P1,311 a month
on average. Aside from changing the way supply and demand work, traditional physical stores
face several consequences because of the growth of online shopping here in the Philippines. Here
are some of the consequences they face: 1.) During a pandemic, customers will not go to the
physical stores for their own safety. 2.) decreased foot traffic and sales 3) increased competitions
4) increased the advertising and marketing costs 5) will not meet the target market. For
convenience, people might choose online shopping. The changes and growth in business will
always have a big impact on the economy, and it is important to have a development that will
help the consumer protect their safety and happiness.
III.
Argument Against
When the world continues to grow and have development, including the businesses we can’t
say that the growth of online shopping in the Philippines may not necessarily alter the way
supply and demand works, because if there’s a change it will affect something. Like for example
now that many people here in the Philippines are using online shopping, we can’t say that it
doesn’t change how the supply and demand works, the demand are still high even the prices are
high because online shops provide vouchers that will help to lower the prices of the products.
Also, when the price is lower and get sold out the supply will get higher since there’s many
people will still want to purchase the product. Every people have different wants and what they
prefer online shopping or going to physical stores, but in the growth of online shopping were
nearly 80% online shoppers here in the Philippines. It shows that the growing e-commerce will
give impact to the physical stores, they will face several consequences. Like for example people
may prefer scrolling to their phone than travelling and going to the mall and people also most of
us will prefer the convenient way.
IV.
Analysis and Evidence Support
According to Hasan Beyari, in contexts of extreme social distancing, in which customers are
always far removed from stores, shopping online is the only possibility. As he also says in the
article, the changes required in many aspects of life now and later are not devoid of challenges
and problems. This shows that the growth in online shopping really does make a difference. In
addition, the COVID-19 pandemic has deeply altered supply and demand and changed the way
transactions occur and services are provided. This new reality has made it clear that e-commerce
can be an essential tool for consumers. E-commerce can support small businesses and, by
making economies more competitive, be an economic driver for both domestic growth and
international trade. According to the International Trade Administration of the U.S. Department
of Commerce, in 2021, the Philippines eCommerce market sales will reach $17 billion, largely
due to 73 million active online users. This is estimated to reach $24 billion, with 17% growth
through 2025. This shows the impact that e-commerce has on physical stores. The growing share
of e-commerce is leading to an erosion of customer loyalty and an ongoing drop in footfall and
revenues in physical stores. (Nim.org.) E-commerce also grows faster than physical stores. And
as we can see in the TikTok video where the teens compare the price of clothes in the physical
stores to the online shops, they see that the prices are lower in the online shops like Shoppe and
Lazada, and this really affects how people prepare to buy in online shops rather than in physical
stores. And here’s the 10 ways that e-commerce had an impact on retail stores: Customer
expectations around convenience, the ease of doing advance research on products, the influence
of customer reviews, expectations of increased choice, the need to promote your brand online,
ease of starting a new business, pressure to provide customer support in more channels, more
cybersecurity responsibilities, increased drive toward personalization, the need to evolve quickly.
In these different articles we can see that the grow of e-commerce or online shopping really
made an impact or changes in the supply and demand also in physical stores.
V.
Conclusion
The growth of online shopping in the Philippines has significantly altered the way supply and
demand works. The demand gets higher, and many suppliers are encouraged to supply more
products because many people will purchase the products and services. Many businesses tend to
produce more products than they think people will buy. Many people are now availing products
and services in online apps, leading to a higher demand for products and services. Traditional
physical stores face several consequences due to the growth of online shopping, such as
decreased foot traffic and sales, increased competitions, increased advertising, and marketing
costs, and not meeting the target market. The growth of online shopping in the Philippines has
had a significant impact on supply and demand, with nearly 80% of online shoppers in the
Philippines. This has caused physical stores to face several consequences, such as people
preferring the convenience of scrolling to their phone instead of travelling and going to the mall.
VI.
References
https://www.researchgate.net/profile/Hasan-Beyari/publication/353958239_RECENT_ECOMMERCE_TRENDS_AND_LEARNINGS_FOR_ECOMMERCE_SYSTEM_DEVELOPMENT_FROM_A_QUALITY_PERSPECTIVE/links/611
c0939169a1a01030ae7a0/RECENT-E-COMMERCE-TRENDS-AND-LEARNINGS-FOR-ECOMMERCE-SYSTEM-DEVELOPMENT-FROM-A-QUALITY-PERSPECTIVE.pdf
https://www.onenews.ph/articles/add-to-cart-filipino-online-shopping-grows-by-57-percenthighest-in-southeast-asia-e-commerce-group-finds
https://www.statista.com/statistics/1125430/philippines-e-commerce-activities-internet-users/
https://www.researchgate.net/profile/Chung-ShingLee/publication/220146601_An_analytical_framework_for_evaluating_ecommerce_business_models_and_strategies/links/02e7e516d9f8ad4001000000/An-analyticalframework-for-evaluating-e-commerce-business-models-and-strategies.pdf
https://www.trade.gov/country-commercial-guides/philippines-ecommerce
https://www.nim.org/en/publications/gfk-marketing-intelligence-review/all-issues/futureretailing/e-commerce-physical-store-which-retailing-technologies-add-realvalue#:~:text=The%20growing%20share%20of%20e,retailers%20are%20taking%20their%20sh
are.
https://www.tiktok.com/@barneykelboi/video/7186261582173768986?q=sa%20shopee%20
mura%20lng%20yan&t=1682500104261
https://www.hostgator.com/blog/impact-of-ecommerce-on-retail/