Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.
U.S. companies entering the market will face fierce competition and the market size is relatively small compared to other countries in the region although ARPU is the highest in the region.
There are many local fulfilment centers in Singapore including uParcel, iStoreiSend, ezyCommerce, Allsome, WhiteBox and SP eCommerce that provide full service end-to-end managed eCommerce solutions. Situated at the crossroads of international shipping and air routes, Singapore is a center for transportation and communication in Southeast Asia. With more than 100 airlines serving some 300 cities, Singapore’s Changi Airport has established itself as a major aviation hub in the Asia Pacific region. Singapore is also a leading international maritime center, connected to 600 ports in over 120 countries. Singapore’s well-developed logistics and infrastructure network has attracted major international logistics companies such as FedEx, UPS and DHL to locate major hubs in Singapore.
In 2021, the gross merchandise volume of the Singapore eCommerce market amounted to US$7.1 billion and was expected to reach US$9.8 billion by 2025. The market largest segment is “Consumer Electronics” with a market volume of US$655 million in 2021. Other major eCommerce product categories include fashion, food, cosmetics and personal care, as well as furniture, appliances and toys.
According to a report published by PPRO, 43% of cross-border eCommerce in Singapore was from China as of January 2020. The market share of cross-border eCommerce was approximately one-third of total eCommerce in Singapore. A survey on Singapore’s cross-border eCommerce in 2021 found that the largest share of cross-border online shoppers was between 55 and 64 years old, at 26%. In comparison, 11% of cross-border eCommerce users were between 11 to 24 years old. 67% of respondents preferred to pay with credit cards for their purchases and 31% cross-border eCommerce shoppers preferred to use PayPal.
Singapore has established itself as the best-equipped eCommerce market in Southeast Asia. However, the high logistical costs is the most pressing challenge faced by Singapore enterprises in conducting cross-border eCommerce in Asia Pacific.
In November 2020, Singapore’s Commodities Intelligence Center (CIC) launched the country’s first global B2B commodities e-trade platform in collaboration with one of the region’s leading B2B eCommerce platform, ZALL. Since then, over 250 cooperation agreements have already been signed by over 300 merchants that value at over US$40 billion.
A major eCommerce event in Singapore, eCommerce Expo Asia will take place in Singapore from October 12-13, 2022.
Local eCommerce Sales Rules and Regulations
The Singapore government has strengthened statutes and regulations to boost consumer confidence in eCommerce. U.S. firms interested in doing business in Singapore should be aware of the following regulations and laws:
Singapore’s eCommerce market is growing fast helped by its pervasive, ultra‐high speed, and trusted ICT infrastructure, tech savvy population, and the government’s dedication in embracing the digital economy and achieving its goal of becoming a Smart Nation. The Singapore government envisioned the country to be a hub for consumer-centric innovation where companies understand and know their consumers online. It actively supports companies in leveraging IT to develop and expand their businesses. B2B eCommerce transactions have been growing in Singapore and there is a trend of more companies using the country as a base to reach overseas customers in neighboring countries.
The Singapore government actively supports eCommerce with various initiatives to help businesses establish strategies locally and abroad while helping them increase sales and productivity through digitalisation. Many Singapore retailers and businesses are adversely impacted by the Covid-19 pandemic. The Singapore government agencies, Enterprise Singapore and Infocomm Media Development Authority are supporting online business through initiatives and incentives such as the SMEs Go Digital Programs.
The pandemic has further accelerated the pivot to eCommerce leading to a change in consumer trends. ECommerce offers unparalleled convenience and accessibility with wide choices of payment methods, buy now pay later (BNPL) solutions, and a greater variety of product categories available online. “Livestreaming” is also gaining traction on eCommerce platforms as livestreaming allows people to stay engaged and this was made all the more interesting with gamification.
Social media platforms like Facebook, Instagram, Youtube, Whatsapp, etc. also contributed to the rise in e-commerce adoption as social commerce allows consumers to shop from the comfort of their own homes, and enjoy a frictionless process from product discovery to purchase. Social commerce has become one of the most preferred shopping channels in the region and is expected to be a key contributor to Southeast Asia’s digital economy growth. There was, however, a corresponding rise in online scams, cyber threats, and a shortage of talent in this field.
U.S. companies interested in selling online to Singaporean and ASEAN markets may wish to join the Singapore Business Federation’s Global Connect B2B Marketplace (https://globalconnectb2b.com/). Popular commercial eCommerce sites in Singapore include Amazon, Lazada, Qoo10, Carousell, Shopee, E-bay, EZbuy, Zalora, Taobao, and Zaful.