E-commerce in Singapore a regional play, not a local play
Singapore has sophisticated consumers, an excellent ICT infrastructure and despite the country’s small size, most companies operating from here see Singapore as a regional play for e-commerce, said Kiren Kumar, Director of Infocomms & Media, Singapore Economic Development Board on May 15.
He was speaking as a panelist in a discussion in Singapore organsied by the Japanese e-commerce company, Rakuten. The panel discussion titled ‘Effective E-commerce Marketing’ also had Julian Persaud (Managing Director, Google Southeast Asia), Masaya Ueno (Head of Business Development Division, Rakuten Asia), Deepesh Trivedi (Head of Retail and E-commerce, Facebook, Southeast Asia) and Marcus Tan (Co-Founder, Carousell) as co-panelists.
“Not just for smaller companies, even for big companies, e-commerce is a major piece of the strategy,” Kumar said. “MNCs based out of Singapore are running their e-commerce strategies from (their APAC headquarters) here,” he said, citing examples of companies like Rakuten, Crocs and Cotton On.
E-commerce: Growing big, growing fast
“Smartphones are driving the e-commerce business as mobile is changing people’s behaviour irrespective of a country’s GDP,” said Yuichi Ejiri, president of regional management group and executive officer of Rakuten, in his welcome speech. “More than 50 percent traffic to e-commerce sites is coming from mobile.”
Currently, the market indications are that global e-commerce sales are growing by 20 per cent every year and around a billion consumers each year are expected to shop online. “Asia is to become one of the biggest e-ecommerce markets of the world,” he said.
In Singapore, e-commerce revenues are set to reach SGD 4.4 billion by 2015 but the potential is even bigger than this and there are some bottlenecks in the way.
Realising Asia’s market potential, the Japanese company Rakuten started operations in Singapore five months ago, said Masaya Ueno. In Singapore, Rakuten already has a merchant base of 150.
Before starting operations in Singapore, Rakuten established offices with partners in Taiwan and Indonesia, and moved into the Malaysian market last year on its own.
“Rakuten means optimism but we can’t declare victory yet,” Google’s Julian Persaud quipped. “Many businesses are conservative here (when it comes to moving online) but the customers have moved,” he said. “There is shortage of people and talent in industry and Singapore EDB has to work with businesses (to address this problem).”
Reacting to it, Kumar said that the Singapore government is committed to helping companies driving e-commerce in Singapore and is investing in building a local talent pipeline to cater to the emerging needs of this sector ahead of demand.
How can companies succeed in e-commerce?
“Start small and build your brand,” said Marcus Tan who co-founded the local e-commerce company Carousell.
“Start small,” agreed Masaya, “because in e-commerce, even small players can compete with big players.”
Masaya also suggested that companies should experiment with different e-commerce platforms until they meet their targets.
“Adopt an intelligent publishing strategy,” suggested Facebook’s Deepesh Trivedi.
The stumbling blocks
Besides the manpower shortage in Singapore, logistics was cited as the major stumbling block in the way of e-commerce taking off in the region.
“Logistics is a great enabler for e-commerce,” said Kumar. “Innovations in payments are also happening here. For example, Mastercard Labs is coming out with innovations in payments. We have all the components to make it (e-commerce) happen. We have pockets of talents to cater to the needs of the industry.”
Persaud emphasized on the need to utilize analytics to drive gains in e-commerce, an area many companies seem to have neglected so far.