Singapore Singapore
Overview
Online shopping in Singapore tripled from SGD 1.1 billion in 2010 to SGD 3.5 billion in 2014. It is expected to reach SGD 4.4 billion in 2015 and is forecast to grow to as much as SGD 46.3 billion by 2020. Singapore has an ultrahigh-speed, pervasive, and trusted information and communications technology (ICT) infrastructure and has dedicated itself to becoming the world’s first Smart Nation. The World Bank already has ranked Singapore the easiest place to do business in the world. It is English speaking and it has rule of law, strong intellectual property protection, and an advanced infrastructure network. U.S. companies have an excellent opportunity to participate in the growing Singapore e-commerce market, given its sophisticated, international customer base.
Statistics
Population: 5.47 million
GDP (USD):307 billion
Currency: Singapore Dollar (SGD)
Language: English (business); Mandarin, Malay, Tamil
Market Entry
Ecommerce sites popular with Singaporeans include- Amazon
- Groupon
- eBay
- Apple
- Reebonz/Kwerkee
- RedMart
- Qoo10
- Luxola
- HipVan
- Bellabox
- Clozette
- Rakuten Singapore
- VanityTrove
- Wego
- Taobao Singapore
- ZALORA
- Carousell
- No local availability: 58 percent
- Greater choice: 48 percent
- Less expensive: 44 percent
- Better discounts: 42 percent
- Strong Singaporean dollar: 35 percent
Some effective online promotions on e-commerce sites include discounts of 15 percent, buy-one-get-one-free, and free delivery. Promotions for Black Friday, Christmas, and Chinese New Year and Google Online Shopping Festivals also drive online purchases in Singapore.
Fulfillment
Singapore hosts many local fulfillment centers, and some, such as Singapore Post, provide a full-service, end-to-end–managed e-commerce solution. Singapore is a major center for transportation and communication in Southeast Asia. With more than 90 airlines serving over 200 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, home to more than 120 international shipping groups. The World Bank’s Logistics Performance Index ranked Singapore as Asia’s top performer when it comes to global freight forwarding and express carriers. Its well-developed logistics and infrastructure network has attracted major international logistics companies such as FedEx, UPS, and DHL to locate major hubs in Singapore.Current Market Trends
As a percentage of total retail market size, e-commerce in Singapore has room to grow rapidly to reach the 15 percent of total retail volume experienced in developed markets such as the United States and Europe. Singapore and its neighboring country Malaysia generate almost half of total online retail sales in Southeast Asia, even though the two countries account for only 8 percent of the region’s population, according to Euromonitor.Sixty percent of Singapore’s e-commerce sales come from cross-border orders, a significant percentage compared with countries such as Malaysia (40 percent), Japan (18 percent) and South Korea (25 percent), according to Forrester Research. The Financial Study Association of Amsterdam also highlighted Singapore’s suitability as an e-commerce test bed, noting that the high share of cross-border trade offers businesses unique insights into Asia Pacific’s online shopping behavior.
Singapore has the most mature e-commerce payment infrastructures in Southeast Asia. A survey by Payvision showed that most domestic e-commerce sales are paid for with credit cards and bank transfers. Cash on delivery is not as commonly used in Singapore as in other countries in Southeast Asia. For cross-border purchases, Singapore’s preferred payment methods are credit cards and PayPal.
Current Demand
A favorite pastime of Singaporeans is shopping, and online shopping is especially popular with young adults and higher-income households. A study by Visa Inc. showed that 26 percent of Singaporeans shop online at least once a week—the highest percentage in Southeast Asia. Consumers in the 25 to 44 age group most frequently shop online in Singapore.Singapore has one of the most developed ICT infrastructures in the world, with a nationwide ultrahigh-speed fiber optic broadband network. According to the Infocomm Development Authority of Singapore (IDA), 86 percent of Singaporean households are connected to the Internet. In February 2015, Singapore’s smartphone penetration reached 148 percent, with 4.4 million 3G subscriptions and 3.3 million 4G subscriptions. Singapore is a leading early-adopter market for tablet ownership, with household penetration estimated at 54 percent at the end of 2014. The high adoption rate for mobile devices will drive mobile e-commerce, with 55 percent of online shoppers choosing to shop using their mobile devices, according to PayPal.
Singaporean shoppers are spending more money online, with the average consumer spending USD 1,861 a year on purchases, according to PayPal. More than a quarter of this money goes toward travel expenditures, with 75 percent of consumers making their vacation bookings online. Almost half of them do so using their mobile devices. The most common items that e-retailers sell online include
- Travel services
- Fashion and beauty products
- Entertainment and lifestyle products
- General insurance
- Electronics and information technologySource: Vulcan Post.