This article explores Singapore as an emerging market, what to know when expanding into the Southeast Asian region, and the upcoming eCommerce trends in Singapore.
Despite the economic downturn due to COVID-19, eCommerce sales have experienced growth globally, presenting new opportunities for digital marketers, advertisers, and brands in the Southeast Asian market. According to eMarketer, the eCommerce market in Southeast Asia is continuing to grow significantly (1).
Specifically, the region accounts for the most prominent digital buyer growth globally in 2021. Several Southeast Asian countries experienced significant retail eCommerce growth in 2021, one of which was Singapore. With a tech-savvy population, they saw 12.5% growth (1), promising a bright future for advertisers and publishers looking to emerge into the market.
The increase in eCommerce sales has come at a cost, with most brick-and-mortar stores forced to shut due to COVID. With stores shutting, retailers and consumers have switched to buying and selling online. The Southeast Asia region has also experienced a few trends that have led to an uptick in eCommerce. These include greater access to mobile phones, the improved economic position of Southeast Asian consumers, and evolving eCommerce platforms for enhanced user experiences.
By 2024, eMarketer estimates the Asia-Pacific region will produce over $4 trillion in eCommerce sales (2), which at that point will make up 65.9% of the global market. While the growth presents many affiliate marketing opportunities for publishers and advertisers, one location stands out amongst the rest: Singapore.
Singapore's Potential as an Emerging eCommerce Market
According to the Index of Economic Freedom for 2021, Singapore's freedom score is 89.7, ranking it 1st among 40 countries in the Asia-Pacific region, including New Zealand (#2) and Australia (#3) (3). Its places them well above the regional and world averages, and they remain the only country in the world that is considered economically free in every index category.
They are one of the world's most prosperous nations with a business-friendly regulatory environment and a low unemployment rate. In 2009, they surpassed China and Hong Kong as the market with the most potential for US companies in the New Market Potential index. The index is based on a broad range of market potential indicators to determine which countries are emerging markets, including:
- Market growth rate
- Market intensity
- Market Consumption
- Economic freedom
- Country risk
While industries can emerge, an emerging market is different. An emerging market is one of the fastest-growing economies in the world engaged in rapid modernisation. To preserve its international standing and to further its economic prosperity, Singapore has taken measures to promote innovation, encourage entrepreneurship and re-train its workforce, which has led them to rank second in the top 10 of the world's most business-friendly countries. They were close behind New Zealand, which ranked first, and China, which ranked third.(4)
Singapore is a natural hub for business in the Southeast Asia region with the busiest port globally, a vast airport, excellent infrastructure, and world-class connectivity and networks. It's a small nation with barely 5 million residents but stands as a relatively neutral base with a vibrant and dynamic entrepreneurial culture.
The Singapore Government (5) has backed many initiatives as part of its Smart Nation goal to create tech-enabled solutions. With their consistent efforts, Singapore could become a leader in digital transformation.
While every industry is different, the Southeast Asia market has witnessed a clear pattern emerging in eCommerce and especially in affiliate marketing. With global consumption shifting to online, affiliate marketing has become the go-to channel as advertisers attempt to expand their digital reach and communications. Previously it wasn't as developed in Asia, but the pivot to eCommerce and m-commerce has cause it to mature faster.
Retailers in the regions are increasing their investments in affiliate programs to make up for any activity that would have typically happened in retail spaces. To recapture that business, they are building new partnerships with publishers, influencers, affiliates, and other brands. In the Affiliate Summit report, all agreed that the pandemic accelerated partnerships, with 86% saying affiliate partnerships are now the first or second option for online marketing.
Singapore eCommerce Market Trends and Statistics in 2022
According to Statista, Singapore's revenue from eCommerce is on track to reach USD $2,793 million in 2021, with user penetration reaching 55.9% in 2021 and a further 67.2% by 2025(6). In the rise of eCommerce in Singapore, several key statistics tell about the future of eCommerce in the nation.
Top eCommerce Product Categories in Singapore
Specific eCommerce product categories are wildly popular across Singapore. The highest day for browsing to conversion in the following categories is Wednesday, important insight into when advertisers and publishers should promote marketing and deals for popular categories. Janio Asia's research found that the top-performing eCommerce product categories were:
- Consumer electronics with $1.08 billion;
- Fashion and beauty with $999 million;
- Toys, DIY, and hobbies with $658 million; and
- Personal care with $647 million.(7)
Without a doubt, credit cards are the number one choice of payment in eCommerce in Singapore. Specifically, when shopping online, credit cards trump debit cards every time. Digital wallets are on the rise, representing the second most popular payment method in Singapore, with 18.2% of Singaporeans now naming it as their preferred payment method. By 2021, digital wallets could account for 22.5% of all sale transactions (8).
In the 2020 eCommerce payments trend report by JP Morgan, 73% of online consumers in Singapore have shopped from overseas merchants, and 35% of the overall Singaporean eCommerce market is cross-border eCommerce. In addition, consumers favour large established eCommerce brands over small ones(8).
Tips for Expanding to Singapore
Despite its small geographical footprint, Singapore is a dynamic and major eCommerce market in Southeast Asia. Here are a few key points about the future of Singapore's eCommerce market that advertisers and publishers should consider when expanding into the region:
When expanding into Singapore, publishers and advertisers need to recognise Southeast Asian consumers are different from Western consumers. The language, customs, and how they communicate are different. An excellent way for advertisers and publishers to produce appropriate messaging for Singapore's culture is to collaborate with local affiliate marketers.
While the working language in Singapore is English, publishers who want to expand into the Southeast Asian markets should consult local affiliates or become familiar with the official languages, customs, and cultural consumer nuances in the market.
The growth of online shopping in Singapore is fuelled by excellent internet technology and a young, tech-savvy population. With fixed internet connections that triple the global average speed, the country holds a reliable and secure communications technology infrastructure (6). Because of these factors, there has been high internet and mobile penetration among its citizens. As one of the wealthiest nations in the world, its consumers have high disposable income that they mostly choose to apply to eCommerce with shoppers willing to purchase big-ticket items such as electronics online.
With improved access to mobile devices across the Southeast Asian market, focusing on mobile commerce is highly recommended. Singapore has a rich appetite for mobile technology. As one of the quickest countries to embrace tablets, mobile phone owners spend an average of 45 hours a week online. Mobile commerce is well established; it's on track to reach a value of $4 billion by this year, accounting for almost half of online sales. The country also has one of the highest social media use rates globally, with 7 in 10 people accessing social media platforms like Facebook, Youtube, Instagram, Twitter, Pinterest, and Google. The preferred e-commerce method according to J.P. Morgan 2019 Payments trends is e-commerce completed on a mobile device with $2.1 billion spent in this area for 2019 alone(8) . Advertisers should consider collaborating with publishers optimising content for mobile, and publishers should stay ahead of their competitors on top of mobile commerce trends.
Marketplace and Platform eCommerce Sites
A new wave of shopping is dominating the Singaporean e-commerce market. Online stores and eCommerce platforms that sell a broad range of products like Lazada, Shopee, and Carousell are trendy amongst Singaporean consumers. . They offer a unique online retail experience, and advertisers and publishers should consider these platforms as a crucial part of their strategy. Lazada is the pioneer of e-commerce platforms, having started in 2011(9). They are considered the Amazon of Southeast Asia and are a major online shopping destination with nearly 9 million visitors to the marketplace in 2019. E-commerce platforms present a unique opportunity to connect quickly and more strategically with Singapore consumers different from Western countries.
What's Next for Singapore's Growth?
With such a digital-savvy population, expanding into Singapore as an advertiser or publisher presents a great opportunity. With a nation that spends so much time on their mobile phones, reliable internet connection, and the disposable income to spend online, three key trends are on the horizon that advertisers and publishers should consider to stay ahead of the curve and penetrate the market quicker.
Live Streaming on eCommerce Platforms
With eCommerce platforms like Lazada and Shopee dominating the eCommerce market, there's been an increase in the popularity of live streaming(10). Through live streaming, brands can stream content and work with social media influencers to promote products. Viewers are then able to purchase products in the app in real-time. As an advertiser or publisher, live streaming offers immediate tracking capabilities to understand conversion rates and what products and messaging are performing well. Both Lazada and Shoppee have experienced an increase in signups and sales volume on a month-to-month basis. This unique opportunity is the closest thing to physically connecting with consumers, and advertisers should consider it while COVID restrictions remain in place.
Invisible Payments for Online Shopping Purchases
Another popular trend that's seeing an increase in popularity over the last little bit is hidden payments(8) . As mentioned before, the number one payment choice for consumers in Singapore is credit cards. In addition, there's been an increase in the number of consumers paying with a digital wallet. And now, the concept of invisible payments is being used in standard services, including ride-sharing and bill payments. The idea of invisible payments allows payment to happen automatically. With high smartphone penetration and engagement, the integration of invisible digital payments in eCommerce checkouts is compelling.
Purchasing Through Voice Search
With mobile phones and digital experiences front and centre, sensory search is beginning to take shape in Singapore. Advertisers and publishers should consider the visual and audio aspects of their content when publishing. Virtual assistants like Alexa and Google have consumers using voice to make purchases now more than ever. In a recent study by PYMNTS, close to 23 million consumers use voice assistants to make purchases. That's a 45% increase since 2018 (10). This is a unique opportunity for brands to implement voice-enabled shopping that partners with voice assistant systems like Alexa and Google.
Singapore is undoubtedly an emerging market in the digital space. With a young and growing middle class with high disposable income mainly applied to online spending and increased penetration of mobile eCommerce, the opportunities for advertisers and publishers to reach an audience in Southeast Asia are hard to ignore. Expanding to their current platforms and adopting innovative technologies will do well with their inquisitive consumer when expanding into Singapore.
If there's one thing that's for sure, Singaporeans love online shopping. Here are few factors to takeaway about the future of eCommerce shoppers in Singapore:
- 86% of Singaporeans are online, 76% are active on social media and mobile subscriptions - one of the highest in the world.(11)
- Millennials between the age of 25-34 make 46% of online shoppers in the country (12).
- Singaporeans like to shop during major online sales, nationwide sales, and important holidays. (13)
Commission Factory will be attending the Marketing Exchange Forum 2022 on the 28th and 29th of July which is being held at Equarius Hotel, Resort World Sentosa in Singapore. Are you going to be at the event? Feel free to speak to one of the team and book a meeting with us.