In the heart of Southeast Asia lies the Philippines, a nation where purchasing decisions are as vibrant and complex as its archipelago of over 7,000 islands. Home to over 100 million people, this market is shaped by a unique blend of cultural depth, economic growth, and technological integration, where traditional and modern shopping habits intertwine.
The Filipino consumer market is marked by strong community bonds, significant digital engagement, and deep brand loyalty, further enriched by economic boosts from overseas remittances. Such a mix demands that brands keen on making their mark or expanding in the Philippines pay close attention to these diverse consumer behaviours.
Highlighting the emotional nature of Filipino purchases, as noted by marketing guru and Chairman and Chief Innovation Strategist of Mansmith and Fielders, Inc. Josiah Go, “Filipinos buy based on emotion and justify with logic,” emphasises the need for a nuanced approach that considers the emotional, digital, and cultural dimensions shaping consumer preferences in the Philippines.
The Evolution of Filipino Consumerism
The journey of Filipino consumerism from its traditional roots to the modern, globalised commerce landscape is a testament to the country’s adaptability and cultural richness.
Traditional Markets and the Early Economy
Historically, the Philippine economy was deeply rooted in agriculture, with local markets or “palengkes” as the centre of community life and commerce.
These markets were more than just places to buy and sell goods; they were cultural hubs where social bonds were formed and maintained. The exchange of goods in these settings was personal, with a strong emphasis on face-to-face interactions and establishing trust between buyers and sellers. This tradition laid the foundational emphasis on personal connections and trust in business dealings, a trait that remains deeply ingrained in Filipino consumer behaviour today.
The Influence of Colonialism
The arrival of Spanish and later American colonial powers introduced new economic systems and consumer goods to the Philippines, marking the beginning of a shift toward a more globalised market. The colonial period saw the introduction of Western products and the gradual adoption of foreign consumption habits, blending with local traditions to create a unique consumer culture. This period also saw the rise of the “sari-sari” store, a small neighbourhood convenience store that embodies the Filipino spirit of community and resourcefulness. These stores, often run out of the front of a family home, became a staple of Filipino communities, providing local and imported goods.
Post-War Economic Growth and Modernisation
The post-World War II era brought significant economic changes and modernisation to the Philippines. The country’s economy began diversifying, moving from agriculture to manufacturing and services.
This shift was accompanied by urbanisation and the growth of the middle class, leading to increased consumer spending and the introduction of modern retail formats, including supermarkets and department stores. However, even as Filipinos embraced these modern retail environments, the traditional values of trust, community, and personal connection played a crucial role in consumer behaviour.
The Digital Revolution and E-commerce
The advent of the internet and mobile technology has profoundly impacted Filipino consumerism. With over 85.16 million internet users in the Philippines in January 2023, the Philippines has experienced a digital revolution that has transformed purchasing habits. E-commerce platforms like Lazada and Shopee have become household names, offering the convenience of online shopping and a wide array of products at consumers’ fingertips. Social media has also become a significant factor in consumer decisions, with Filipinos spending more than 4 hours a day on social platforms, influencing everything from brand perceptions to purchase decisions. This also makes online market research in the Philippines very effective.
The Modern Filipino Consumer
A complex blend of tradition and globalisation characterises Filipino consumerism. The Philippines houses 3 of the world’s 10 largest shopping malls, and the strong mall culture coexists with a booming e-commerce market predicted to surpass $12 billion by 2025. Filipino consumers navigate a global marketplace while connecting deeply to local culture and values. Brands that succeed in this market understand the importance of emotional resonance, community engagement, and the blend of traditional and modern values that define Filipino consumerism.
The Philippines’ internet penetration rate stood at 73.1% of the total population at the start of 2023.
The Significance of Family Ties
Filipino society is tightly woven with family relations, where family extends beyond the immediate to include extended family members. This familial network profoundly influences consumer behaviour, shaping purchase decisions and preferences across generations.
The Role of Family in Purchase Decisions
The collective nature of Filipino families means buying decisions are often made with the family’s needs and preferences in mind rather than individual desires. This dynamic is evident in the popularity of big-bulk and family-pack products, which cater to sharing among family members. Whether it’s groceries, clothing, or electronics, the preference leans toward items that offer value for money and can be used or enjoyed by multiple family members.
Family-centric purchasing behaviour is also reflected in the Filipino custom of ‘pasalubong’ – bringing gifts home for family members after travelling. This practice underlines the importance of family in everyday life and showcases the thoughtfulness toward maintaining family bonds through shared experiences and gifts.
How Filippino Parents and Grandparents Shape Buying Habits
Filipino families often feature strong, multigenerational households where parents, grandparents, and sometimes even great-grandparents play significant roles in shaping the family’s values and habits. This generational influence is a powerful factor in transmitting brand loyalties and purchasing habits. Brands trusted by a family over generations enjoy continued patronage, reflecting the deep-seated value of trust and tradition in Filipino consumer behaviour.
Parents and grandparents pass down preferences for certain brands or products and impart values that dictate how money should be spent. For example, emphasising education, health, and well-being often guides family spending toward educational materials, healthy food options, and medical insurance. The reverence for elders in Filipino culture means that products and services catering to the elderly, such as health supplements or mobility aids, are given special consideration in family budgets.
The influence of parents and grandparents also extends into the digital world. As digital natives, younger family members often introduce older generations to online shopping and digital payments, gradually influencing their acceptance and adoption of new technologies for purchasing. This intergenerational exchange enriches the family’s buying habits, blending traditional preferences with modern conveniences.
Products and services that can bridge generational preferences and cater to the collective needs of Filipino families are more likely to find success and longevity in this interconnected and family-oriented market.
Cultural and Social Factors
The Philippines exhibits consumer behaviour deeply influenced by social and cultural factors.
‘Bayanihan’ and Community-Centric Purchases
‘Bayanihan,’ a term encapsulating the Filipino spirit of communal unity and cooperation, significantly influences consumer behaviour in the Philippines. There’s a strong inclination toward brands and products that contribute positively to local communities through job creation, environmental sustainability, or support for local artisans and producers.
The concept of ‘Bayanihan’ extends to consumer preferences for products and services that facilitate community gatherings and celebrations, such as food and beverages that can be shared during communal events.
Local Festivals and Seasonal Buying Patterns
The Philippines is renowned for its colourful and diverse festivals, known locally as ‘fiestas,’ which celebrate various religious and cultural events throughout the year. These festivals significantly impact consumer spending, driving seasonal buying patterns companies need to anticipate and cater to. During these times, there is a surge in demand for specific products, such as traditional foods, clothing, and decorations that align with the festival’s themes.
These festivals often stimulate local economies by encouraging spending on travel, accommodations, and souvenirs, reflecting the Filipinos’ love for celebration and their willingness to invest in creating memorable experiences.
The Influence of Religion on Consumption
Religion, particularly Catholicism, which most Filipinos follow, significantly shapes consumption patterns. Religious observances and traditions, such as Holy Week and Christmas, dictate the timing and the nature of consumer purchases. For instance, there is a notable shift toward more modest consumption during Holy Week, with increased spending on religious items and charity. Conversely, the Christmas season sees a spike in consumer spending, with Filipinos buying gifts and decorations and preparing festive meals in the spirit of sharing and celebration.
Over 80% of Filipinos are Catholic, and religious events like Lent, Easter, and Christmas influence purchasing behaviours, from food to gifts.
The religious influence extends beyond these periods, with fiestas honouring patron saints in various locales yearly. These events are religious observances and community celebrations that stimulate spending on food, clothing, and festivities.
Economic Considerations
The significant contributions of Overseas Filipino Workers (OFWs) and the growth of the middle class are noteworthy developments.
The Impact of OFWs and Remittances
OFWs play a pivotal role in the Philippine economy, with their remittances constituting a significant portion of the country’s GDP.
In 2020, remittances from OFWs reached around $30 billion, showcasing their substantial impact on the national economy and, by extension, on consumer spending patterns.
Remittances represent a lifeline for millions of Filipino families, supporting their daily needs, education, health care, and investments in small businesses and real estate.
The inflow of remittances has increased purchasing power among recipient families, influencing consumer behaviours from heightened spending on luxury goods and services to investments in education and property. The availability of this ‘extra’ income has also encouraged a consumer culture, as OFWs and their families often associate these attributes with social mobility and success.
Remittances have also contributed to the resilience of the Philippine economy, particularly during global economic downturns. The steady flow of funds from abroad has helped sustain domestic consumption even in times of crisis, buffering the economy against external shocks and maintaining consumer confidence.
Rising Middle Class and Its Effects on Consumer Behavior
The Philippines has witnessed significant economic growth for decades, contributing to the expansion of the middle class. The rising middle class is characterised by increased disposable income, changing lifestyles, and evolving consumption patterns. As more Filipinos find themselves with greater financial freedom, there has been a noticeable shift toward discretionary spending, with a higher demand for quality, convenience, and luxury.
The growing Filippino middle class is more inclined toward experiences and products that enhance their quality of life, such as travel, dining out, entertainment, and wellness. This demographic is also more engaged with digital platforms for information and commerce, driving the growth of e-commerce and online services.
This segment’s influence extends to the housing market, with an increased demand for residential properties that offer security, amenities, and access to urban conveniences. The rising middle class is more likely to invest in education and health, prioritising the well-being and future of their families.
The Power of Digital and Social Media
Two phenomena stand out in the Philippines: the rise of online influencers and the importance of social proofing.
Online influencers in the Philippines wield significant power over consumer preferences and purchase decisions. These influencers, ranging from celebrities to niche content creators, have cultivated loyal followings across platforms like YouTube, Instagram, and TikTok. They often serve as trendsetters and trusted sources of information for their audiences, offering recommendations and reviews that can sway purchasing decisions.
With 20 M followers and dubbed the “Multimedia Superstar,” Ann Curtis Smith remains the most-followed Filipino on Instagram.
Social proof has emerged as a powerful factor in the Filipino digital consumer journey, with social media platforms playing a pivotal role. Social proof, the psychological phenomenon where people assume the actions of others in an attempt to reflect correct behaviour for a given situation, is now amplified. Reviews, testimonials, and user-generated content on platforms like Facebook, Instagram, and YouTube serve as influential sources of social proof, guiding consumers in their purchasing decisions.
Brand Loyalty vs. Value Shopping
Understanding the dynamic between brand loyalty and the pursuit of value in the Filipino consumer market is crucial for brands aiming to engage Filipino consumers effectively, requiring a flexible approach that can appeal to both the heart and the wallet.
“The Filipino consumer is no longer just looking for value. They are now looking for meaning,” – Francis Kong, Filipino business consultant.
Are Filipinos More Brand Loyal, or Do They Prioritise Value?
Filipino consumers exhibit a complex relationship between brand loyalty and value shopping, often influenced by the type of product, the perceived value of the brand, and the economic context. On the one hand, Filipinos show a strong sense of brand loyalty, especially towards brands that have established a deep emotional connection or have been part of family traditions over generations. This loyalty is further reinforced by the quality, reliability, and status associated with certain brands, making them preferred choices despite cheaper alternatives.
However, pursuing value — getting the most out of every peso — is also deeply ingrained in the Filipino consumer psyche. The concept of “sulit” plays a significant role in purchase decisions, where a product’s quality, quantity, and price are carefully considered to ensure maximum value.
The balance between brand loyalty and value shopping can also shift based on economic conditions. During economic uncertainty, for example, consumers may become more price-sensitive and open to switching brands in favour of better deals.
The Role of Promotions, Discounts, and ‘Suki’ (Regular) Incentives
Promotions, discounts, and the concept of ‘suki‘ — a term used to describe a loyal customer or patron — play crucial roles in reinforcing brand loyalty and encouraging value shopping among Filipinos. Retailers and brands leverage these strategies to attract and retain customers, offering tangible benefits for continued patronage.
The success of major online sales events, such as those offered by platforms like Lazada and Shopee, underscores the effectiveness of these strategies in the Philippine market.
The ‘suki‘ system embodies the relational aspect of Filipino commerce. Small businesses and local vendors often recognise and reward regular customers with discounts, extra goods, or more personalised services. For larger brands and retailers, loyalty programs that mimic the ‘suki‘ relationship by offering rewards, points, or exclusive benefits can effectively build and maintain a loyal customer base.
Local vs. Global Brands
The Philippine market presents a fascinating battleground for local and global brands, each vying for consumer preference through cultural relevance, quality, and value.
The Perceived Value of International Brands
International brands often hold a certain allure among Filipino consumers, attributed to their global reputation, perceived quality, and status symbol. For many, purchasing products from well-known international brands is about the prestige and lifestyle they represent, especially in categories like fashion, technology, and luxury goods.
The globalisation of consumer culture also reinforces the appeal of international brands, with Filipinos exposed to global trends through the internet and media.
However, this does not imply that international brands always have the upper hand. Their success in the Philippine market depends on their ability to localise offerings and connect with Filipino values and preferences.
Trust and Reliability in Local Products
Local brands also command a significant place in the hearts and wallets of Filipino consumers, driven by a deep-seated trust and a sense of national pride. The success of local brands like Jollibee, which has outperformed global giants like McDonald’s in the Philippines, underscores the strong connection local brands can forge with consumers. This connection is often rooted in local brands’ understanding of Filipino tastes and preferences, enabling them to effectively tailor their products and marketing strategies.
The trust in local products is also bolstered by their perceived reliability and value for money. The preference for local products is further strengthened by the growing consumer awareness of the importance of supporting local businesses for economic development. There is a rising trend among Filipino consumers to patronise local brands as a way of contributing to the national economy and supporting local communities.
Sustainability and Ethical Purchasing
In recent years, the Philippines has seen a growing consciousness among consumers regarding sustainability and ethical purchasing. This shift reflects a broader global trend toward environmental responsibility and social equity, influencing purchasing decisions across various sectors of the economy. Let’s explore how these trends are manifesting in the Filipino market.
Are Eco-Friendly Products and Ethical Brands Making an Impact on Filipino Consumers?
Eco-friendly products and ethical brands are significantly impacting Filipino consumers, albeit gradually. As awareness about environmental issues and social injustices increases, more Filipinos are considering the broader implications of their purchasing choices. This awareness is partly driven by the visible effects of environmental degradation in the Philippines, such as pollution and natural disasters, which underscore the urgency of adopting sustainable practices.
According to our study on sustainability in ten countries, 73% of Filipino adults said the private sector should contribute significantly to finding ways to reduce waste and reuse/recycle, and over half (56%) strongly agreed they would select a product or service based on its environmental credentials.
Download our comprehensive report, “The Green Brand,” for insights into sustainable trends among consumers in ten countries.
Ethical brands prioritising environmental sustainability and social responsibility are gaining traction among a population segment that values transparency, sustainability, and ethical business practices. The rise of social media and digital platforms has further facilitated the spread of information regarding the importance of eco-friendly and ethically produced goods, amplifying their impact on consumer choices.
However, the overall market penetration of such products still faces challenges, including higher price points compared to conventional products and limited availability in some areas.
The Growing Trend of Local, Organic, and Handmade Goods
Parallel to the rise of eco-friendly and ethical brands is the growing popularity of local, organic, and handmade goods in the Philippines. This trend is driven by a desire for healthier lifestyles, support for local economies, and a preference for products with a lower environmental footprint. Organic food products, in particular, have seen increased demand among Filipino consumers, who are becoming more health-conscious and concerned about using pesticides and synthetic fertilizers in conventional agriculture.
Handmade goods and artisanal products are also experiencing a resurgence as consumers value these items’ craftsmanship, uniqueness, and cultural significance. Purchasing handmade goods from local artisans is a way to support community livelihoods and preserve cultural practices.
The trend toward local, organic, and handmade goods is further bolstered by the growing number of farmers’ markets, organic farms, and community-supported agriculture (CSA) programs in the country. These initiatives provide direct channels for consumers to access fresh, locally sourced products while fostering a sense of community and connection to the food system.
Emotional Drivers and Aspirational Purchasing
Emotional drivers and aspirational purchasing are deeply rooted in the Philippines’ cultural and social dynamics, affecting how brands position themselves, and consumers respond to marketing campaigns.
How Marketing Campaigns Tap into Filipino Emotions and Values
Marketing campaigns in the Philippines often succeed by resonating with the emotional and cultural values of the Filipino people. Brands that tap into feelings of family, community, and national pride tend to have a more significant impact, creating a deeper connection with their audience. Emotional marketing leverages storytelling, often featuring narratives that reflect everyday Filipino life, highlighting themes of love, resilience, joy, and the importance of family and social bonds.
Filipino values such as ‘Bayanihan’ (communal unity), ‘Pakikisama’ (smooth interpersonal relationships), and ‘Utang na Loob’ (debt of gratitude) are powerful themes that brands integrate into their marketing strategies.
The effectiveness of emotional marketing in the Philippines is also amplified by the widespread use of social media, allowing these resonant messages to be shared and amplified within communities, further strengthening the emotional ties between consumers and brands.
The Desire for Upward Mobility and How It Affects Consumer Choices
Aspirational purchasing is another significant factor driving consumer behaviour in the Philippines. The desire for upward mobility—a better lifestyle, higher status, and improved well-being—is a powerful motivator for many Filipinos. This aspiration influences purchasing decisions, from fashion and technology to education and real estate.
Consumers are often drawn to brands and products perceived as symbols of success and progress to enhance their social standing. For instance, owning the latest smartphone or wearing popular fashion brands is seen not just as a matter of personal taste but as an indicator of one’s socioeconomic status. Similarly, investing in quality education for their children is a top priority for many Filipino families, viewing it as a key to unlocking better opportunities and securing a prosperous future.
Predictions for the Future of Filipino Consumer Behavior
Increased Demand for Personalised Experiences: As digital technology advances, Filipino consumers will increasingly expect personalised shopping experiences, tailored recommendations, and products that reflect their preferences and values.
Greater Emphasis on Sustainability: Environmental awareness and social responsibility will play a more significant role in shaping consumer preferences. Brands that can convincingly integrate sustainable practices into their operations and product lines will capture the attention of future consumers.
Continued Blend of Global and Local: While globalisation introduces international trends and products, a strong sense of national identity will keep local brands and traditions relevant. Successful brands will be those that can offer the best of both worlds, combining global appeal with local relevance.
Evolving Digital Landscapes: Adopting new technologies, such as augmented reality (AR), virtual reality (VR), and AI-driven shopping assistants, will further transform the Filipino consumer experience, offering new avenues for engagement and personalisation.
Resilience and Adaptability: The Filipino market’s history of resilience in the face of economic and social challenges suggests that consumers will continue to adapt to changing circumstances. Brands that are flexible and responsive to these changes offering solutions that meet evolving needs, will thrive.
The Philippine market presents ample opportunities for foreign direct investment, but companies that understand its unique socio-economic fabric will thrive.
With our global expertise in market research, we operate a dedicated office in the Philippines as a key partner for brands looking to understand and engage with the Filipino market. This presence on the ground provides an invaluable advantage, offering deep local insights and global perspectives. Our team in the Philippines specialises in harnessing a range of qualitative and quantitative research methods tailored to uncover the nuances of Filipino consumer behaviour, preferences, and trends. By leveraging its local expertise and global research capabilities, Kadence International is ideally equipped to steer organisations through the complex Filipino market, ensuring that strategies are informed, data-driven, and culturally attuned to meet this market’s unique needs and opportunities.
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