Well-known as the fifth-largest economy globally, Southeast Asia is a top consideration for entrepreneurs who wish to start their online or physical business. Yes, trade has indeed suffered from the effects of the pandemic. The eCommerce remained as buoyant as ever. Worth around USD62 billion in 2020, the growth is expected to reach USD172 billion by 2025.2 In 2020, over a third of all online commerce in the region was generated via new shoppers, with 8 in 10 intending to retain their shopping habits after the pandemic ends.
Along with Singapore, Indonesia and Malaysia offer a tempting proposition to potential exporters. Indonesia is the region’s largest market, while low entry barriers in Malaysia and Singapore make them easy starting points for selling to other countries nearby. This is thanks in part to English proficiency in these two countries, plus the proliferation of easily accessible business loans by reliable banking partners.
Let’s check Singapore in more detail and the current economic position and impact of the pandemic, new and emerging shopper trends, and strategies you can use to reach new customers there.
Singapore Market Overview
A bustling and highly-urbanized trade center, Singapore’s 2019 GDP of USD372.063 billion made it Southeast Asia’s fifth-largest economy. The current population of 5.7 million people and diverse international connections also made it an attractive and accessible country for businesses to expand to, especially through cross-border e-commerce.
Singapore E-Commerce
Internet use in the country is at 88%, with 95% of users going online through their smartphones. The high level of urbanization and small size means Singapore boasts nationwide delivery coverage, too. The e-commerce market value stood at USD2.32 billion in 2019 and is expected to grow substantially. Consumers prefer to shop online rather than visit physical stores due to the ongoing pandemic.
COVID-19 Market Impact
Singapore previously imposed a lockdown to help contain the virus. Despite the damaging impact to businesses, a recent survey conducted revealed that 71% of Singaporeans still expect their economy to recover by 2021, while a third (36%) feel hopeful that things will improve. Still, nearly 2 in 3 Singaporeans (64%) have concerns about job security, and almost half (47%) want to switch to lower-priced brands where possible.
Remote working
Singaporeans had a 51% larger average e-commerce online basket size in the first six months of 2020 compared to the year before. In April 2020, the online consumer spent reached SGD358.4 million. It’s too early to say just yet whether physical stores will return to pre-pandemic levels. Regardless, a survey revealed that 59% of people prefer working from home even after the pandemic situation improves.
Singaporean online buying
During the lockdown, sales of work-from-home gadgets, portable storage devices, ergonomic chairs, headphones, and computer monitors all spiked. Interest in exercise equipment and new hobbies also increased, as did cookware products, although this spike could be short-lived.
Skin Inc revealed a spike in skincare spending due to people recognizing the need for self-care and good mental health during anxious times. Health websites, such as iherb, noticed a rise in sales and interest in supplements and other products to boost people’s immune systems.
Shipping and Getting Your Products to Singapore
Singapore boasts one of the highest de minimis rates in Southeast Asia at just SGD 400. Because of this, Singaporean cross-border shoppers benefit from a fairly large range of duty-free imports.
Singapore’s main international airport is the renowned Changi Airport, while its primary port is the port of Singapore. Singapore’s combination of modern infrastructure and small size means last-mile deliveries are easily completed directly from the airport, port, or local warehouse, even within a day.
Summary
The pandemic restrictions have caused disruptions to Singaporean shopping habits. Unable to purchase from local suppliers or go across the border to get their shopping needs.
For potential entrepreneurs looking to operate in Singapore, the future appears to be bright. For one, the population feels the economy will soon bounce back and is happily choosing new suppliers and businesses to meet their needs. Two, the government grants and major banks offer business loans with incredible flexibility. As such, many entrepreneurs can take advantage of the situation despite the ongoing pandemic.
