Shopping happens to be one of Singaporeans’ favorite hobbies. Bringing it online seems to be a sure-win recipe for retailers and not surprisingly, e-commerce is growing a lot in Singapore. According to Paypal research, the Singapore online shopping market has grown from S$1.1 billion in 2010 and is estimated to reach S$4.4 billion this year.
Who are the people who do online shopping?
With the Singapore online shopping market growing, the question rises; who are the spenders? According to TechinAsia, while 1.2 million Singapore online shoppers are over 18 and have an average spend per head of S$1492 over the past year, there is significantly more who come from the middle income and above with personal earnings of S$4001 and above. These people make up at least two-thirds of the online shopping market worth S$730 million.
Where and why do these online shoppers buy their products and services?
While there is a perception that Singaporeans go to overseas websites for their products and services, online shoppers spend nearly 40%, estimated to be about S$420 million, on domestic websites.
There are several reasons why nearly 60% of Singaporean online shoppers choose to do their shopping on overseas websites. The leading reason is Unavailability (58%). This is followed by Greater Choice (44%), Better Discounts (42%) and the Strong Singapore Dollar (35%).
What are online shoppers buying online?
The top category is the travel category that, with an estimated spend of S$307 million, accounts for 28% of the online Singapore shopping market. This is followed by Fashion/Beauty, with an estimated spend of S$146 million and 13% share, General Insurance, with an estimated spend of S$83 million and 8% share, and finally, Gifts/Collectibles with an estimated spend of S$75 million and 7% share.
Differences between online shopping in overseas and domestic websites
Singaporean online shoppers tend to have different preferences when it comes to domestic and overseas websites. This can be due to reasons such as variety and availability. To reinforce this fact, online shoppers bought nearly twice the amount of clothing, at S$84 million, and travel packages, at S$38 million, on overseas websites as compared to domestic websites.
Enter a new submarket: Codes and Coupons
With the growth in online shopping, companies will try to attract customers online and offer discounts via special codes and coupons. Naturally, shoppers looking for great deals will flock to these sites. Some of the more prominent ones are Groupon and CupoNation. A study by CupoNation shows how Singapore, in particular, shops for coupons online.
So should companies start investing in their retail online presence?
Of course! The statistics point towards an increasing online market for Singaporeans and will only grow. Thus, while having a brick and mortar shop may be fine, not having an online retail presence will result in some potential loss in sales. Furthermore, according to Redmart founder, Roger Egan, e-commerce beats brick and mortar on every point, from prices to variety and experience.
In addition, according to Innovation is Everywhere, South-East Asia has an untapped $330 billion market with less than 1% of shopping taking place online. This opens up a world of opportunity for shops that are ready to create their online retail presence.
These findings show that, if anything, a world where buying things with just a click of a button is truly within our reach.
Find out more about E-commerce here:
Future e-commerce trends from Singapore-based Redmart founder
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