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What makes Singapore an e-commerce hub

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June 12, 2018 | 8 min read

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Recent years have seen a boom in the e-commerce in Singapore. With a population of almost 5.8 million people, Singapore is one of the wealthiest countries in the world, with a low unemployment rate and high population density. With a stable economy, high-speed internet, and a growing number of online shoppers, it is one of the fastest-growing economies in Southeast Asia.


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E-commerce in Singapore has grown tremendously over the past few years. In fact, reports suggest that the e-commerce industry in Singapore will be worth S$7.5 billion (US$5.4 billion) by 2025. That is five times the industry’s value in 2016, and at the current rate of growth, these numbers seem easily achievable.

This growth is estimated to happen at a rate of over 11% per year as a result of investments of up to US$50 billion expected to be made in the e-commerce sector till 2025.

The country has also seen a significant increase in the number of online start-ups investing in the retail segment, especially in fashion, home needs, travel and entertainment, and digital products.

5 Reasons Why Singapore is an Important e-commerce Hub

Technology Sets the Pace

Many Singaporeans are tech-savvy, and a vast majority of them seem to prefer transacting online rather than visit physical stores to make purchases.

More than 80% of Singapore’s population uses the internet on a daily basis. The island also has high internet speeds allowing users to browse for products and services faster.

With a large number of residents buying and selling online, the online market space is growing at a steady pace. While cash is still commonly used as a mode of payment in many places, there is a considerable shift every year towards cashless payments.

Since the island is considered to be so tech-savvy, you would expect that residents prefer using their smartphones to make online purchases. However, that doesn’t seem to be the case. A study done by ValueWalk shows that Singaporeans are three times more likely to make purchases using their computers rather than their mobiles. This can probably be attributed to mobile apps and sites not providing a shopping experience as immersive and convenient as standard shopping websites.

Nevertheless, the number of internet users and mobile phone users continues to grow at a rapid pace, contributing to the marked increase in overall e-commerce transactions.

ValueWalk also observed that the e-commerce traffic from mobile phones is increasing significantly every year. Taking advantage of this growth, star-tups and retail companies have started ramping up their online presence, gearing up to meet the high demand expected to flow in over the next few years.

There is no doubt that technology plays a huge role in the growth of online markets, and with Singaporeans constantly exploring the new options available to them, the e-commerce boom is set to continue for many years to come.

Availability of Credit Cards and Other Payment Methods

Credit cards are a great way to pay for your expenses, and the fact that all major merchants in Singapore offer credit cards as a mode of online payment has increased the number of online shoppers.

Payment gateways have a huge impact on e-commerce. Credit cards offer one of the simplest ways to pay for your online purchases. Since Singaporeans value convenient payment options, the fact that credits cards top this list is not surprising.

The fact that the Singapore government is also encouraging their citizens to go cashless further increases the credibility of the e-commerce sector.

Other options used in Singapore for paying online include PayPal, bank transfers, direct debits, and eNETS. All these options, with their ease of use and convenient payment procedures, encourage residents to actively shop online.

Data from iPrice shows that in all of Southeast Asia, Singapore is the only country that shows an increase in shopping after working hours. The largest group of people who shop online in Singapore after working hours is that of individuals between the ages of 25 and 54. This is the working class, showing they don’t have the time to shop otherwise and prefer to use the convenience that online shopping offers.

Language Gives Easy Access

Singapore uses English as one of its main languages, especially on the commercial and national level. This has a huge influence in attracting global players to invest in its e-commerce economy.

This, combined with the fact that English is used as a business language, makes international retailers more interested in the e-commerce sector of Singapore, helping them build trade relations with businesses and authorities in the country.

Singapore’s Geographical Location and Infrastructure

Singapore is located right in the heart of South Asia. This is a strategic geographical location that makes it a highly relevant hub for logistics and world trade. The island lies right in the middle of many shipping routes making it very easy for products to be shipped into it.

Singapore was ranked by the World Bank as being the 5th best country in the world for logistics in 2015. Given this fact, it is no surprise that of the top 25 global logistics companies in the world, 20 of them base their operations in the island, having either their global headquarters or regional centres here.

Factors such as convenient logistics, global connectivity, and advanced infrastructure, also make leading international manufacturers set up their operations here.

This has a direct impact on e-commerce, allowing e-retailers to bring in their products and services from surrounding countries. Singapore’s highest imports are from China, Malaysia, and the United States of America. Apart from these, South Korea and Japan also contribute a significant share of the country’s imports.

Marketing Channels, Social Media, and Conveniences

Traditional marketing channels such as newspapers and television still form the major part of how products and services are advertised in Singapore. But over the past few years, spending on digital marketing has been on the rise, overtaking other channels such as radio and magazine.

With a growing number of Singaporeans making use of the great connectivity the country offers, online marketing has also been growing at a steady pace. More than 60% of consumers now get information about products and services on the internet first.

Most Singaporean residents use at least one form of social media, and many of their shopping decisions seem to be influenced by what they see on social media. Social media offers direct links to online websites where customers can get everything they need directly on the internet.

E-retailers offer attractive discounts and rewards when you shop online with them and this gives customers the added impetus to spend online rather than make a purchase at the physical store. Add to this the fact that many e-commerce start-ups sometimes offer free and quick delivery of purchases, and you have no reason to step out of your house to go shopping.

Simply put, e-commerce simplifies shopping for the consumer. All you have to do is pick out your purchases, pay for them, and the e-retailer ships them out to you. The ease of buying things combined with convenient payment options makes online shopping an attractive option.

Is it Sustainable?

As great as it sounds, and as fast as it is growing, is e-commerce a sustainable sector in Singapore?

Consider this -- Alibaba’s Singles’ Day promotion held on November 11, 2017 spawned a buying frenzy that resulted in sales of US$25.6 billion in just a single day! This is more than Iceland’s GDP for the year 2016! Lazada’s Online Revolution online shopping event held on December 12 every year grossed US$40.5 million in sales in 2016.

There is virtually no stopping the power and impact of e-commerce. To know how successful e-commerce is in Singapore, check out this link.

As long as the internet is used as a medium for buying and selling, e-commerce will continue to grow. Given all the advantages and conveniences the platform offers, there is no doubt that it will continue being an important part of our daily lives. E-commerce is here to stay.

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