While local consumers are increasingly preferring digital payments and online shopping, market research group Blackbox Research warns that logistics bottlenecks and regulatory gaps continue to hold back e-commerce growth in the Philippines.

In a statement on Thursday, Nov. 20, David Black, founder and chief executive officer (CEO) of Blackbox, said that more Filipinos prefer digital shopping and payment options, but last-mile delivery gaps and regulatory concerns are becoming a disadvantage to domestic micro, small, and medium enterprises (MSMEs).

“Filipino consumers have shown remarkable trust in the digital economy, but the systems supporting that trust have yet to reach full maturity,” he said. “The opportunity now lies in closing those structural gaps so that MSMEs can scale alongside consumer demand.”

While the study gave the Philippines a 7.93 out of 10 optimism score, the country still has room to address e-commerce bottlenecks that, if resolved, could benefit local entrepreneurs.

To address these challenges, Blackbox suggested key strategies to strengthen online retail, noting that experts rated the country’s e-commerce ecosystem as 87 percent effective.

Firstly, the study recommended sustained platform investment, which means shifting focus from marketing to improving inventory management, fulfillment, and the use of artificial intelligence (AI) tools to support sellers.

Technology investments, particularly those that tackle operational issues, enhance speed and reliability, and strengthen customer trust, would help meet the growing demand for faster product deliveries, as consumers increasingly expect efficient and timely service.

Blackbox also noted that public and private sector collaboration will help scale up MSME competitiveness, particularly in areas such as digital infrastructure investments, government support through simpler policy and program enforcement, as well as capacity-building strategies.

“Targeted public-private investments are needed to expand last-mile networks, establish micro-fulfillment centers closer to high-demand areas, and support regional logistics hubs to lower costs and improve reliability,” it stated.

The Blackbox report highlights the country’s logistics challenges, noting that delivery costs can take up 20 to 30 percent of an order’s value, while delivery times vary from 24 to 48 hours in major cities to one or two weeks in rural destinations.

Moreover, regulatory gaps remain the biggest hurdle in retail competition, as the study said the majority of experts noted that some cross-border sellers are bypassing compliance obligations, such as taxes and product certification, while local MSMEs have to comply.

The study emphasized that the current policy focus is mostly directed toward improving consumer protections, citing the Internet Transactions Act, the E-Commerce Philippine Trustmark, and the Consumer Code.

Simplified documentation, pilot regulatory sandboxes to test new frameworks, and evidence-based policymaking are among the policy recommendations that would help smaller business groups grow their market.

“The Philippines’ combination of high consumer trust, growth optimism, and expanding digital economies. But realizing that potential requires translating trust into tangible outcomes through smarter regulation, modernized logistics, and coordinated public-private investment,” it concluded.