Singapore E-Commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Singapore E-Commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Singapore e-commerce market is anticipated to register a CAGR of 8.35% during the forecast period (2022- 2027). Live video broadcast over the internet to promote and sell goods and services is known as live streaming in the e-commerce business. Shopee and Lazada are two e-commerce platforms that leverage live streaming. Even when there are restrictions on movement and physical gathering, live streaming allows marketers and businesses to engage well with their customers. Livestreaming can be compared to traditional TV shopping. However, retailers don't need to buy a lot of airtime or spend money on TV advertising to reach potential customers.

Key Highlights

• According to the Iprice group, With 16.15 million monthly online visits in the fourth quarter of 2021, Shopee was the most frequented e-commerce website. With 9.2 and 5.2 million visits, respectively, Shopee is followed by Singapore-based e-commerce companies Lazada and Amazon.
• According to Tazapay, Singapore is a digitally literate country, with an internet penetration rate of 88.9% and a financial inclusion rate of 97.9% among the country's 5.87 million residents. Furthermore, According to the Ministry of Trade and Industry, roughly 52.3% of all Singaporeans have purchased goods via the internet as of 2021, indicating an increase in the adoption of e-commerce businesses, with the business services sector accounting for the smallest slice of the e-commerce pie at about 3.6 % of all e-commerce trade in 2019.
• Many local online retailers are already used to and prepared for growth through this channel. Several well-known Singaporean e-commerce companies have adopted a mobile-first strategy. Carousell, the aforementioned Singaporean e-commerce site, began as a mobile-only service and has recently grown to accommodate online desktop shoppers. It allows users to quickly sell items by taking images of the item on their phones and communicating with interested purchasers via instant messenger.
• The nature of the cards as payment methods also means that the user is at greater risk of fraud since all a malicious actor needs is a few pieces of information attached to customer cards, which are usually user card number, CVV code, and expiry date. These are the details required for making an online transaction. A skilled fraudster could also persuade the user to give up their one-time password (OTP) to circumvent most banks' two-step authentication processes for online transactions.
• Singapore companies are increasingly embracing digital to deal with the damage COVID-19 has caused to their brick-and-mortar enterprises. When the pandemic arrived, even small and medium-sized businesses, which were previously less inclined to operate online, had to rethink their tactics. Since COVID-19 broke out, the Singapore government has supported pushing digital agendas for domestic enterprises.

Key Market TrendsInternet Plays a Significant Role in Market Growth

• According to data from Ookla, internet users in Singapore might have expected the following connection speeds at the start of 2022, 63.41 Mbps is the average mobile internet connection speed via cellular networks. 184.65 Mbps is the average fixed internet connection speed. According to Ookla's data, Singapore's median mobile internet connection speed rose by 8.38 Mbps (+15.2%) in the year leading up to the start of 2022.
• Singapore's e-commerce industry is powered by several ASEAN unicorns who have decided to build their regional headquarters there, in addition to its strategic position, advanced digital economic ecology, and highly developed Internet market. Singapore has the most unicorns, with 15 on its credit. Grab, Carousell, Lazada, Ninja Van, and Shoppee are well-known, each with a valuation of more than USD1 billion.
• Singapore will need to alter its digital infrastructure in order to "recover better" from the epidemic and acquire long-term resilience. This idea is mirrored in recent government measures to strengthen Singapore's post-pandemic resilience. This includes driving digital transformation and innovation by expanding the adoption of technology-enabled alternatives and increasing R&D. The Singapore Green Plan 2030 intends to leverage technology-driven solutions to "ensure a green, liveable, and sustainable home for generations " Singaporeans," also emphasizes sustainability.
• Telecom operators are expanding the offering of their 5G connection for several countries. For instance, in March 2021, Philippines-based Globe Telecom announced that it would accelerate its 5G Roaming rollout to other countries in the Middle East and Asia. Globe is set to open its 5G connection to visiting customers of Singtel of Singapore. Such 5g expansions will drive the market.
• The region is witnessing the growth in usage of the internet with the increase in broadband speeds and online payments; further, the developments in 5g. 5 G's use of higher spectrum waves (mmWaves) enables higher capacity in densely populated areas, greater scalability, higher user mobility for services in moving vehicles, and enhanced connectivity everywhere. 5G enhanced mobile broadband provides the benefits of 5G to the broader public, as it can deliver high-quality service internet access in previously challenging or prohibitive conditions.

Food and Beverage Industry is One of the Factors Driving the Market

• According to the Singapore Department of Statistics, Singapore's food and beverage services' gross domestic product (GDP) was around SGD 4.32 billion in 2021, up slightly from the previous year. The reduction in 2020 is attributable to the foodservice sector's unfavorable impact of the COVID-19 pandemic. The pandemic has compelled some businesses to adjust, and everyone is looking forward to a new normal.
• While customer preferences for dining in have stayed unchanged, the response to constant adjustments in safe management limits appears to have moved this year, according to data from the Customer Satisfaction Index of Singapore (CSISG) study. Surprisingly, the fall in dine-in numbers was met with a considerable increase in takeout, while delivery proportions remained steady.
• According to the Singapore Department of Statistics, food and beverage service sales increased by 4.7% year over year in March 2022, reversing a 0.7% dip in February 2022. Over the previous month, food and beverage service sales climbed 8.0%, seasonally adjusted in March 2022. In March 2022, the total sales value of food and beverage services was anticipated to reach USD 806 million. Online food and beverage sales accounted for an expected 30.4%, similar to the percentage recorded in February 2022.
• According to Value champion, GrabFood has the highest ratio of delivery fee to the total cost of the order, at 21%, according to a review of leading meal delivery apps in Singapore. With a fee ratio of 9%, Foodpanda has the lowest average fee ratio. By dividing the average delivery fee total by the average total cost of the delivery order, the fee ratio was obtained.
• The increase in the number of coffee and snack outlets is one of the main drivers of the growth of the fast food and coffee business. Specialty coffees have emerged due to the diversity of tastes and preferences for various varieties of premium coffee, which is driving the growth of the market. According to the US Department of Agriculture, in June 2020/2021, Singapore consumed 100,000 60kg bags of coffee. In recent years, the increase in cafes, chain coffee shops, and specialty coffee houses have contributed to rising coffee consumption.

Competitive Landscape

In Singapore, the competition in the E-commerce market has increased as the customer's adoption of online sales channels has grown. The market is moderate. An increase aids this growth in internet penetration. Further, brands such as Lazada, Shopee, and many more expand their reach by providing customer-centric services that enhance customers' online shopping experience.

• March 2022: WEBUY, a Singapore-based social e-commerce business with offices in Malaysia and Indonesia, has acquired Chilibeli, Indonesia's largest and most popular community group buy platform. WEBUY will become the leading social e-commerce company in both Singapore and Indonesia as a result of this purchase. Chilibeli, like WEBUY, uses a social group buys concept to optimize the supply chain and create revenue for group players.
• September 2021: Ninja Van, a Singapore-based logistics company, has raised USD 578 million in a Series E investment to fund the expansion of its operations infrastructure and technological systems. According to the company's statement, investors include China's Alibaba Group, as well as current backers DPDgroup's GeoPost, Facebook co-founder Eduardo Savering's B Capital Group, Monk's Hill Ventures, and Zamrud, a Brunei sovereign wealth fund. Ninja Van plans to use the funds to expand its activities, including micro-supply chain solutions to maximize Southeast Asia's e-commerce prospects.

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