Singapore is one of the world’s richest countries. The country’s wealth is mostly due to its low unemployment rate, stable economy, superfast internet speed, and a vibrant e-commerce marketplace.
Singapore enjoys the fastest-growing e-commerce industry in Southeast Asia, with projections suggesting that the country’s e-commerce will be worth S$7.5 billion by 2025. The steady rise in online trade in Singapore is partly attributed to the presence of e-commerce platforms such as Shopify.
The government of Singapore has also contributed immensely to the growth of the e-commerce industry in the country, through incentives like SME grants. These incentives allow SMEs to tap into the vast e-commerce marketplace, which translates into more revenue for both the businesses and the government.
But why is the Singaporean e-commerce landscape booming? Here are some of the key reasons we’ve identified.
Singapore Has the Highest Number of E-commerce Companies in Southeast Asia
One of the reasons behind the boom in the Singapore e-commerce industry is the high number of e-commerce brands that have since launched their operations in the country.
It all started in 2004 when eBay officially launched its operations in Singapore. Four years later, the South Korean-based Qoo10 (previously known as Gmarket) expanded its operations in the country.
2010 witnessed the arrival of two giant e-commerce brands – Groupon and ExBuy (previously known as 68DaiGou.com).
The following are other major e-commerce companies that have since started their operations in Singapore.
- Redmart in 2011
- Carousell, and Lazada and Zalora in 2012
- Rakuten in 2013. Rakuten would later exit the Singapore market in 2016, but after leaving a significant impact in the country’s e-commerce landscape.
- SEA Group and Honestbee in 2015
- Alibaba in 2016, through the acquisition of a 51% stake in Lazada
- Amazon in 2017
- LightInTheBox in 2018, through the acquisition of Ezbuy
- Redmart permanently moved to Lazada in 2019
Favorable Government Policies
As we’ve already indicated, the Singaporean government plays a pivotal role in facilitating an enabling environment for e-commerce companies to thrive. And that mostly happens through the provision of business grants, such as the Productivity Solutions Grant.
The PSG Grant is the most accessible government-issued business grant in Singapore, and is aimed at facilitating SMEs in their adoption of cutting-edge business technology for improved productivity. What makes the PSG grant one of the most attractive SME grants in Singapore is its inclusive eligibility criteria.
Another way the government of Singapore has contributed to the boom in the country’s e-commerce industry is through the introduction of Infocomm Media Development Authority (IMDA). IMDA is a statutory board constituted under the Singaporean Ministry of Communications and Information. Its key functions range from the formulation of sustainable business policies to the provision of grants to SMEs, as well as the protection of consumers from undue exploitation.
IMDA has five major initiatives, one of which is SMEs Go Digital. As the name suggests, SMEs Go Digital is an initiative that facilitates the digitalization of businesses by providing them with pre-approved IT solutions.
Singaporeans Have a High Affinity for Online Shopping
In addition to the large presence of e-commerce brands and SME-friendly government policies, Singapore’s online buyer behavior also accounts for the country’s booming e-commerce market.
According to 2019 statistics, 89% of internet users in Singapore occasionally search for a product or service online. Statistics also suggest that of all the internet users in the country, up to 73% purchased a product or service via the internet.
To crunch the numbers further, Statista reports that as of 2019, there were more than 5.3 million internet users in Singapore. 73% of this works out as 3.869 million internet users that actually purchased a product or service online. Now, that’s a vast consumer base right there.
Singapore doesn’t just rank among the fastest-growing economies in the world. The country also boasts a vibrant e-commerce industry.