Cash on Delivery (COD) and shipping costs significantly influence Filipino online shopping behavior.
COD remains a dominant payment method due to low credit card penetration (around 8-15%), limited banking access, and concerns about online fraud. It provides shoppers with security and trust, allowing them to pay only upon receiving and inspecting the product, which is crucial in a market where trust in online transactions is still developing. Surveys show that a large majority of Filipino online shoppers—ranging from 50% to over 70%—prefer COD, especially first-time buyers or those without credit cards.
However, the heavy reliance on COD also poses challenges to e-commerce growth. Delivery providers often hesitate to accept COD orders or limit the amount allowed due to the higher risk and operational costs involved. This can constrain small and medium online businesses and affect the scalability of e-commerce platforms.
Shipping costs also impact Filipino online shopping behavior. High or unclear shipping fees can deter purchases, as convenience and cost-effectiveness are key factors for consumers who often shop via mobile devices. The preference for online shopping is partly driven by convenience—avoiding traffic and saving time—but shipping costs remain a critical consideration in the overall purchase decision.
In summary, COD's popularity stems from financial inclusion issues and trust concerns, while shipping costs influence the affordability and convenience of online shopping. Both factors shape consumer preferences and the development of e-commerce in the Philippines.
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