The COVID-19 pandemic thrusted online shopping into an unprecedented growth in many places of the world. And Singapore is not the exception. Two years ago, WorldPay predicted that Singapore eCommerce would grow by 48% to $7.4 billion by 2022. That’s a compound annual growth rate of 7%!
It is no secret that this is a thrilling time for eCommerce. And in 2022, the outlook for Southeast Asia looks promising:
- WorldPay states that India’s eCommerce sector will be worth $95 billion by 2022.
- China registered $1,343.5 billion in online sales during 2020, according to Statista.
- The East Giant is expected to lead the eCommerce market through 2025.
In recent years, the Lion City has seen quite a boost in online shopping. And that’s what we sought out to learn and share with you today.
Below, you’ll find the most exciting eCommerce opportunities for Singapore in 2022.
Singapore Ecommerce Market – Overview
Singapore is already known as the financial capital of Southeast Asia. Now, it’s close to becoming the eCommerce leader in its corner of the world.
But why is Singapore becoming such a great eCommerce hub? First off, it is a gate into Southeast Asia. Let’s look at the facts:
- Most Singaporeans are fluent Chinese and English speakers. And thanks to its strategic position, Brands can set up shop and export to neighboring countries with ease.
- The Lion City also has the third highest internet penetration in Southeast Asia. Out of 5.45 million Singaporeans, around 4.8 million are internet users. That’s 88.5% of its citizens, who spend an average of 8.07 hours online, every day. (Source)
- A world-class city infrastructure helps speed up deliveries. Singapore boasts first-rate airports, roads and transports. Plus, Singapore’s small size makes for fast, nationwide delivery coverage.
- The city also has demanding customers. Singaporeans expect next-day delivery (at least) from local businesses. That’s a great opportunity for services like Amazon Prime to delight new subscribers.
- Singapore’s population is fluent in English and Chinese. Plus, they’re accustomed to export goods and cross-border purchases. JP Morgan states that 73% of Singapore’s online shoppers bought from overseas in 2020.
These factors pose a bright future for eCommerce in Singapore. And 2022 is ripe with new opportunities for online shopping, as we’ll see below.
Ecommerce Export Opportunities
As of 2021, almost 25% of Singaporean brands deal in B2C eCommerce. And most use it for exporting goods. This marks a 45% contribution to Singapore’s annual value of e-commerce exports.
This is a rising trend, according to the “Local Sellers, Global Consumers” report by Amazon. The paper also predicts an 35% increase in overseas sales from Singapore to neighboring countries.
But this tendency relies on the adoption of eCommerce by Singaporean sellers. And there are some challenges to address, of course.
- Cross-border shipping cost. 81% of brands stated that high costs are a serious setback to their exports. Singapore does offer grants to support eCommerce exports. However small businesses may need a bit more support to compete overseas.
- Import regulation. Amazon’s report cites that ¾ of small and medium merchants lack clarity in Singapore’s import regulations. In consequence, they may not be able to complete the requisites to start selling abroad.
- Market data. More than 70% of sellers think they can’t compete globally. This is due to not understanding foreign niches and preferences. So, there’s a need for accurate marketing research tools in Singapore.
Singapore must overcome these barriers to boost its eCommerce adoption trend. In that case, the annual value of B2C ecommerce exports could grow at 5% per year.
With such growth, Singapore’s B2C eCommerce exports are expected to reach $2.6 billion by 2026.
Shipping and Supply
Foreign sellers may have an easier time getting into Singapore’s eCommerce Game.
The Lion City grants a GTS (Goods and Services Tax) relief to air-imported items. The total CIF (Cost, Insurance and Freight) value is below $294. (Source)
Plus, entering imports for personal use do not require legal registration with Singapore’s authorities.
Due to these benefits, Singaporeans can enjoy a fair range of duty-free import products. It’s a great incentive to foreign sellers.
But the key to succeed in Singapore lies on Direct-to-Consumer sales. As we said, Singaporeans expect great care from sellers, and fast deliveries.
On the second account, the city’s infrastructure enables smooth import entries. This is thanks to its modern shipping structures, like the Changi Airport.
International Sellers can also smooth deliveries by partnering with local distributors. The catch is to register as a local entity, or work with an IOR (Importer of Record). But this will enable sellers to fulfill same-day orders.
Also, setting up shop in Singapore will open the gates for the Southeast Asian Market. Think of expansion into Malaysia, India, China, and Australia. It’s a whole new territory to leave your mark on.
As of the third quarter of 2021, Amazon is the third leading eCommerce player in Singapore, with more than 4.7 million monthly visits.
Though it launched in 2019, the marketplace is already leaving a positive mark across the Lion City. Here are some of Amazon’s best perks for Singaporeans:
- Eligibility for free 2–3-day delivery on orders above $40
- Free international shipping for orders over $60
- Amazon Prime subscribers enjoy one-day delivery on local orders
- The Prime Now service grants 2-hour delivery on grocery orders over $40
Singapore merchants also get access to more than 225 seller tools. One great example is Fulfilment by Amazon (FBA). Brands can use Amazon’s logistics machine to pick, pack, ship and deliver products on time.
Plus, the retail giant recently launched its IP Accelerator program in Singapore. This service aims to help local businesses protect their brands from trademark infringements.
Source: About Amazon
Singapore citizens are spending more time online than ever. Besides, they are a tough market, and expect stellar treatment from sellers.
But this is not a setback for great merchants. In fact, it’s a great opportunity for brands to delight new market niches.
Singaporeans are used to almost-immediate shopping and delivery. So, they expect open communication with sellers. Customers want to be updated on giveaways, discounts, and shipment statuses.
Let’s take the current supply chain crisis for example. It’s expected that the 2021 holiday season will suffer some setbacks. This is due to product scarcity and shipping delays.
In this case, Singaporeans expect honest updates and solutions from online sellers. Users need assurance and trust. If brands deliver clear expectations.
What does this mean for sellers? A chance to build long-term loyalty, in spite of any order setback. So, Singapore is not just a new market to tackle, but a brand investment for the future.
Online shopping in Singapore is no longer a young counterpart to brick-and-mortar stores. Now, it is a full economic force with its own rules, strategies, and players.
Due to the pandemic, eCommerce has flourished into a go-to solution for Singaporeans. But the push is not over for the Lion City.
Singapore’s eCommerce market has more sellers and customers to delight. In fact, CIMB expects that online sales will comprise 10.3% of retail revenue by 2022. – SBR
And with retailers like Amazon at the forefront, Singapore is sure to be solid ground for eCommerce cashflow.
So, don’t miss out on these opportunities to grow in Singapore. Better to be prepared and ride the wave a bit earlier!
Esteban Muñoz is an SEO copywriter at AMZ Advisers, with several years’ experience in digital marketing and e-commerce. Esteban and the AMZ Advisers team have been able to achieve incredible growth on the Amazon platform for their clients by optimizing and managing their accounts and creating in-depth content marketing strategies.