E-commerce solutions in each of the five countries in the ASEAN region is at a different phase with different sets of prospects and challenges by and in depth examination of the trends on each country. The remaining key weakness that is yet to be solved in Indonesia and Philippines is logistics. Singapore, which faces no such infrastructure boundaries, still has comparatively less online retail approval rates because of the convenience of going to traditional retailers on malls and marketplaces.
Opportunities also flourish in each market; increasing labor costs in Singapore may be a benefit for the online retail section, while the non-traditional work hours of the Philippines’ business course outsourcing workforce has produced a ready market for non-traditional retail.
Singapore’s internet advance technology, smartphone utilization, financial organization, and logistical facilities are among the best in the world. Yet the city-state has not reached online retail adoption rates similar to those of Japan or South Korea. This could be due to various factors: The high accessibility of shopping in many malls scattered all around the city-state, the fact that tourist spending is mostly done in offline locations and the absence of a sturdy local e-commerce website player. Indeed, a large portion of online sales comes from e-commerce solutions outside Singapore. About 47% of all online retail sales in Singapore came from outside the Southeast Asian Nations. As a result, a big portion of online sales tends to have significantly high transport costs and very long distribution times.
Online retail shopping could hasten over the next three years due to the following reasons:
1) Tourist arrival numbers have not been increasing in the recent years. Singapore attracted over 15 million tourists in 2014, a significant figure that plays a key role in the retail segment. Retail sales generated from these tourists and travelers tend to be relatively more resilient to deviations brought on by online shopping, as it is a part of the holiday experience for them. However, tourist numbers have not been increasing, resulting in a lower percentage of retail sales from tourist spending. Retail brands have also expanded into other markets (China, Indonesia, and Malaysia), thus, making Singapore a less unique shopping destination.
2) Traditional retailers have been hit hard by labor policy changes. The services sector – including the retail industry – has felt the most impact of the Singapore government’s reduction of the dependency ratio upper limit, which determines the number of foreign workers a firm is permitted to hire based on the number of local staff it employs. Retailers in Singapore collectively face two problems: First, escalating labor costs which impinge on their profitability; and second, even if retailers are able to contain their labor costs and afford additional labor, there isn’t any laborers to be found as locals tend to shy away from service sector jobs.
3) Suburban retailers may steal market share from downtown retailers. The appearance of master-planned regional centers – Jurong in the Western part of Singapore, Tampines in the East, and Woodlands in the North – brings shopping to the heartlands and offers shopping experiences that were previously only available downtown. This development offers shoppers the convenience of shopping malls within short distances from homes. Except for usual lifestyle needs and high-end products, consumers prefer to shop for groceries, garments, and cosmetics within their neighborhood malls. As such, malls that offer low- to mid-end products are likely to face higher substitution from online sales.
4) Emergence of strong e-commerce website designers and players. More and more local players and local affiliates of larger global e-commerce platforms are emerging in Singapore. Global players such as Alibaba have invested in Singpost, which is also an e-commerce website design player in Singapore. This should reduce the costs as well as the distribution times for local buyers, leading to better adoption of online shopping for day-to-day purchases.
Write something about yourself. No need to be fancy, just an overview.