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The pandemic has accelerated the shift of brick-and-mortar retailers to online channels. Retailers have launched initiatives such as parcel deposits, contactless delivery, and improved delivery infrastructure to meet the growing demand for online shopping. According to retail sales data for 2022, online sales of consumer goods accounted for 12.8% of total sales (or 14.8% for total online sales from official sources). This trend is expected to continue, with consumers buying more computers and telecommunications equipment online, with online spending on these goods accounting for 51%. The share of furniture and household equipment bought online is about a third, while online spending in supermarkets and hypermarkets accounted for 16% of such purchases that month.
The structural shift in consumption behavior is expected to push up online sales by a further 6.6% this year in nominal local-currency terms. This represents a moderation from the extremely elevated rates of more than 40% at the height of the pandemic in 2020-21, but is still impressive following such strong growth. Growth is expected to continue to moderate over the next five years, despite not being the largest market by sales value owing to its population size, has the largest share of online in total retail sales among ASEAN members.
Alibaba (China) and Shopee are the largest pure-play online players in Singapore, alongside Amazon (US) and Qoo10. Other popular online retailers include Carousell, Taobao (a Chinese business-to-consumer marketplace), eBay Singapore (the local arm of the US customer-to-customer marketplace), EZBuy (a business-to-consumer marketplace), Zalora (a fashion e-retailer), and RedMart (a grocery retailer). These retailers are expected to continue to dominate the online retail market in Singapore in the coming years.
The e-commerce market in Singapore is highly competitive and fragmented, with third-party merchants having the highest combined value share. Many e-commerce aggregators are utilizing aggressive brand acquisitions and large amounts of funding to gain a significant market share in the forecast period. In 2021, e-commerce aggregators seeking debt financing have also become popular among venture capital firms in Singapore. These aggregators prioritize acquisitions over organic growth.
Start-ups in Singapore are emulating the success of tech unicorn Thrasio, an e-commerce aggregator in the US with a $1 billion valuation. The Thrasio model involves acquiring a 100% stake in independent or third-party brands that sell on marketplaces such as Amazon, Lazada, and Shopee. Founders lose control of future operations, but may still collect a commission on subsequent sales. Some examples of this model includes Rainforest, which is managed by former Carousell and Fave executives, and Una Brands, co-founded by an ex-Rocket Internet CEO.
Telemedicine and online medical services: Telemedicine practitioners, teleconsulting services and importers of medical devices are increasingly establishing an online presence. This trend is driven by a shift in consumer behavior towards more discretion and comfort in discussing sensitive medical issues in the comfort of one’s home. An example of this trend is Sire, a platform that prescribes finasteride for hair loss. Another platform, Zoey, offers contraceptive pills and Plan B.
Paid membership clubs: E-commerce players are creating paid membership clubs as a way to capitalize on customer behavior and loyalty. These clubs target specific demographics, such as parents with infants and toddlers, and offer exclusive perks such as product sampling and CRM programs. An example of this trend is Shopee’s mother and baby club and Lazada’s family club. These communities target parents with infants and toddlers and offer exclusive perks such as product sampling and CRM programs.
BNPL financial arrangements: BNPL (Buy Now Pay Later) financial arrangements are becoming increasingly popular with consumers. These plans allow for instant gratification in purchasing a product by splitting a transaction into smaller payments, and are being offered by more players in the market, including digital banks. An example of this trend is Atome, Pace, and PayLater by Grab, all of which are key players in the BNPL space.
Capitalizing on price-conscious consumers: Companies focusing on medical supplies are increasingly opting for an online presence. During the pandemic, consumers became increasingly price-conscious, and online platforms were crucial in magnifying the price differences in brands. An example of this trend is MEDPRO Medical Supplies, which has a store presence on Shopee and offers a wide range of medical supplies at competitive prices.
Preventative health technology: Preventative health technology is quickly accumulating a large audience, as evidenced by the increasing venture capital funding in Singapore. Companies like Ease Healthcare, which targets women’s reproductive health, are becoming prominent players in the digital healthcare market. An example of this trend is Ease Healthcare, a local digital healthcare start-up that targets women’s reproductive health and has a consumer base of 20,000 in 2021.
In Singapore, There are about 48.9% of people use credit cards, and 91.8% of people use debit cards. While there are 48% of people purchase on the internet, there is only 48.7% of people with online banking accounts.
% with financial accounts
% with credit cards
% with debit cards
% get paid through digital channels
% buy on the internet
% with internet banking
% pay bill through online
% E-Commerce Penetration
There is 3.30 million consumer goods e-commerce users in Singapore, and they spend total of around 6.16 billion USD dollars in 2021. That makes a per capita spending on consumer goods e-commerce of around 1869 USD. Also, in those e-commerce users, about 63% of them purchase through their mobile phone.
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