Singapore’s e-commerce market has been charting phenomenal growth. In 2012, e-commerce sales reached $800 million. Merely three years later in 2015, sales nearly doubled to reach $1.4 billion. These figures are telling that the local e-commerce sector will expand further and faster.
Factors that boost e-commerce activities
In a country plagued with high labour costs and rents, e-commerce firms in Singapore do not feel the burden as transactions and businesses are conducted online. In spite of a smaller marketplace, better connectivity and infrastructure means smoother logistics and delivery.
With Singapore’s online population on the rise, coupled with the fact that Internet users are spending more time online, consumers are exposed to more online retailing opportunities. With secure Internet and mobile payment transactions, consumers also feel more comfortable shopping online. All these contribute to increased online purchases.
Optimism among e-commerce firms
Giosis, the company that manages online shopping portal Qoo10, reported transaction volumes that doubled in the past year. For the next three years, it expects transactions to double every year. Other e-commerce firms are also optimistic about Singapore’s market. For instance, Japanese major e-commerce company Rakuten opened its headquarters in Singapore recently.
By mid-2017, local e-commerce activities will receive a further boost. This is when Singapore’s first e-commerce retail mall opens. This $150 million mall features a new retailing concept that combines offline and online shopping. Located in front of Singapore Post Centre, this mall allows consumers to browse products in-store, purchase products and have them delivered. This is a move that aims to tap into Singapore’s burgeoning e-commerce market. All these point to striking optimism towards the local e-commerce scene.
Potential of e-commerce
The potential of e-commerce was felt very early by some local businesses. FarEastFlora.com for instance, set up its first website in 2000 to sell its range of flowers, gifts and hampers online. That year, it received 500 Valentine’s Day orders. The number far exceeded its highest record of 300 orders that were received through the mail.
That was in 2000. Today, consumers are a lot more receptive to online purchases. On Singles’ Day this year (11 November), Qoo10 earned its highest single-day transaction of $3.2 million. And in its first hour of Singles’ Day promotions, Lazada reported sales volume that grew by more than 30 times compared with transactions the previous day.
This trend is not only evident in Singapore. Within Southeast Asia, many countries are also experiencing an e-commerce boom. With growing middle-class population and better Internet penetration, the number of Internet and mobile shoppers has grown to about 40% of Southeast Asia total population. In the near future, e-commerce businesses can look forward to more room for online growth.
In addition, a new 1 million square foot logistics facility was recently opened in Singapore as a gateway to Asia Pacific countries. This is in anticipation of online retailing to double from $733 billion in 2015 to $1.4 trillion in 2020 in the region.
It is obvious that businesses stand to benefit from selling their products and services online. Growing a business alongside a thriving e-commerce sector both locally and regionally is a strategic move. It is also the trend moving forward.