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singapore ecommerce landscape

With 83% of its population connected to the internet, Singapore holds the title as the most mature ecommerce market in Southeast Asia. Despite its small population, Singapore accounted for 25% of Southeast Asia’s 2013 online retail value, larger than the region’s largest market, Indonesia that contributed 20%.

Singapore’s ecommerce market is valued to reach $5 billion in 2025, making up 6.7% of retail sales in the country. What else can we see from the Lion City’s ecommerce scene? ECOMScape: Singapore will provide a quick overview.

1. Cross-border ecommerce is (still) preferred by the population

Around 55% of ecommerce in Singapore consists of cross-border transactions. Their developed infrastructure, liberal regulations on customs and tax, and large population of expats in the country opens the gate for foreign companies to flourish without having to establish local ecommerce operations in the country.

Singapore ecommerce landscape

The US and China are the top two destinations for shoppers from Singapore, putting Amazon and Alibaba’s Taobao on the top five most visited ecommerce websites in the country.singapore ecommerce landscape
As a result, there aren’t many home-grown players opting for a marketplace business model. Lazada and Qoo10 are the only mainstream B2C marketplaces in Singapore, unlike in Indonesia and Thailand where the space is a battlefield for deep-pocketed companies.

Its strategic location also attracts global companies to use Singapore as an ecommerce hub for their Brand.com presence to serve online customers in nearby markets such as Indonesia and Malaysia. Adidas used to fulfill regional orders from Singapore before opening an online store in Indonesia this October while Charles & Keith, a brand native to Singapore, offers free shipping to most countries with minimum purchase conditions.

2. Grocery shopping becomes more convenient

As the popularity of online shopping in Singapore increases, more Singaporean are turning online to fulfill their basic needs, including groceries. According to Ipsos and Paypal, online grocery shopping in Singapore is predicted to increase 21% in 2016.

This space seems to be very attractive for investors as seen by funding news of pure-play online grocers like Redmart and honestbee and transition of Singapore’s traditional grocers like Giants and Fairprice jumping on the online bandwagon. In fact, the majority of the etailer in Singapore are traditional grocers.

singapore ecommerce landscape

Food delivery services like Foodpanda and Deliveroo are also thriving in Singapore, the latter boasting 25% week on week growth, while Foodpanda claims Singapore to be one of its key markets in Southeast Asia after closing down operations in Indonesia and Vietnam.

singapore ecommerce landscape

3. Daily deals sites are still popular among Singaporeans

As news of daily deals companies shutting down across Southeast Asia grows, the business model may have overstayed its visit in the region but seems to be stable in Singapore. Groupon, which closed operations in Philippines and Thailand last year and sold its Indonesia operations, remains in Singapore’s top 5 most downloaded shopping apps and top 15 most visited website in Similar Web’s ‘shopping category’. Although Ensogo shut down earlier this year, many more deals sites still continue to operate.

singapore ecommerce landscape

4. Payments opportunity in Singapore attracting global players

Singapore’s established infrastructure and internet maturity makes an appealing testing ground for global players wanting to expand their reach in Asia, especially online payments players. The country’s credit card penetration is 38%, while most of the Southeast Asian countries are still below 5%, and the amount of cards circulating in the country averages 3.9 cards per person.

As a result, the Cards and Payments market in Singapore has become one of the most attractive and competitive markets in Asia Pacific. Adyen, a payment platform unicorn from Europe, recently opened its office in Singapore following the company’s plan to focus in Asia Pacific.

singapore-ecommerce-landscape-mobile-wallet

Singapore’s cashless habit has also made Singapore the perfect place for NFC payments solutions like Apple Pay, Android Pay and Samsung Pay to launch in Asia and the heavy traffic to Alibaba’s ecommerce platforms ensure the adoption of Alipay is well on its way.

5. C2C is driven through mobile apps

singapore ecommerce landscape

According to PwC, 38% of online shoppers in Singapore are making purchases on their smartphone, this number is higher than the global average of 28%. 57% of the shoppers in the republic also turn to social media to read product reviews. As an early adopter of internet culture in the region, Singaporeans are apt at using their mobile to access the internet.

Home-grown C2C platforms like ImSold, Shopee and Duriana have focused on their mobile platforms in order to appeal to customers who want the convenience of buying and selling their things on the go. More mobile-only players are expected to emerge.

Click here to download the full, high resolution version of ECOMScape: Singapore version and join the ecommerceIQ network for the first look at the next ECOMScape in our series.

You can also find ECOMScape: Indonesia and ECOMScape: Thailand.

A Singapore-based startup, Funding Society raised $7.5 million of Series A round, reported Tech Crunch. The company allows SMEs to access loans from individual or institutional lenders. The fund will be used to expand the operations in Malaysia, in addition to Singapore and Indonesia under the name ‘Modalku‘. Sequoia India led this investment round, along with several angel investors. 

The company claimed it has paid out $8.7 million across 96 loans to date and has 94% repayment rate. Fund Societies CEO, Kelvin Teo said the data shows the company’s reliability.

Funding Societies is primarily focused on working capital loans, to finance the day-to-day operations in a company. In Singapore, the average loan size is $67,000 ($90,000 SGD) while the number falls lower to $18,500 (SG$25,000) in Indonesia. It charges an origination fee to the borrower (3-4% in Singapore, 5-6% in Indonesia) and 1% monthly fee to the lender. It claims to have an approval rate of between 15-25% for loan applicants.

The fund will be used to expand its SME loans operations in Malaysia, in addition to Singapore and Indonesia under the name ‘Modalku‘. Sequoia India led this investment round, along with several angel investors. 

In addition to the expansion, the fund will also be used to comply with myriad of regulatory variations in the three countries where it currently operates. It prided itself on being compliant with regulations and ensuring the safety of investors money.

“Industry regulation has been announced in Singapore, but it will still take some investment to reach that level of compliance,” Teo added. Likewise, in Indonesia, he said the company is working with regulators to introduce a framework to regulate peer-based lending.

Outside of compliance and expansion — including expansion beyond capital city Jakarta in Indonesia — Funding Societies is planning to invest in its product to streamline its services for borrowers and lenders, add more services to make the investment options more tailored to the investor needs. The company target to reach breakeven in two-to-three-years.

A version of this appeared in Techcrunch on August 9.  Read the full article here

Kickstarter, the world’s most famous crowdfunding platform is making its first entry in Asia through Singapore and Hong Kong, reports Tech In Asia.

“There’s already a large, supportive community of Kickstarter backers in Singapore and Hong Kong — people who have been supporting the creative ideas of others for years,” says Julie Wood, director of global communications for Kickstarter.

It’s true that Singaporeans are already passionate about the platform.

The campaign for the Pebble 2 smartwatch set, which netted a massive $12.8 million, had almost 2,300 backers from Singapore.

Every Singaporean project to date has had to clear some serious hurdles to make it onto the platform. Kickstarter is currently available to project creators in 18 markets, including the US and the UK, Australia, and scattered European countries.

This means that companies from Singapore previously needed at least a legal presence, bank account, and credit card in one of those countries and raise funds in those specific currencies.

Challenges for Kickstarter in Asia

It is difficult to get on the platform. For a company outside of the Kickstarter countries, one would have to set up an entity in the UK, for example, deal with tax regulations and find a local representative. Not having to deal with these additional burdens could be good for local companies, as is the opportunity to raise funds in their own currency.

An important fact about Kickstarter is the fact that most people are concerned with joining it. But there should be more information regarding community building and education, rather than just access.

Many global companies have used Singapore as an eventual gateway into other Asian countries. However, no official statement has been announced regarding Kickstarter’s expansion plans. A regional expansion would mean that more projects would be funded locally, without having to deal with regulations from the other side of the world.

A version of this appeared in Tech In Asia on July 28. Read the full version here. 

Touché enabling cashless payment with fingerprints

Source: fintechnews.sg

Singapore-based company Touché raises $2 million from private investors in Singapore to allow cashless payment with your fingerprint. The investors participating in this round are including co-founder Benedict Soh of creative agency, Kingsmen, and BTI director Terence Khoo.

A new way to pay

The startup makes a device that allows merchants receive payments and gather information about their customers through their fingerprints. The device scans your fore and middle fingers and connects them to your profile. The next time you visit that store, you can make a purchase by touching your fingers to the machine to authorize payment. It can also record information like your purchase history at that particular outlet and loyalty memberships.

To make sure of its security, the fingerprints are hashed and encrypted when stored and not shared with anyone. Merchants only have access to their customers’ membership and purchase information. Touché technology also requires two fingers to record prints, making it tougher to duplicate. The company uses live detection to make sure that only your actual fingers can trigger the machine, not an image of them.

A new way to market

The main draw for stores is the ability to handle payment and loyalty information through a single system. They will also be able to know about a customer’s previous purchases and spending habits at their business.

For customers, they get to stop worrying about carrying credit and loyalty cards, or about their phones running out of battery. They also have access to an “e-journal”, which contains things like their purchases, expenditures, and real-time offers from businesses they frequent or are members in.

Touché will target markets outside Singapore and is currently exploring Latin America, Japan, Macau, and Indonesia. At the moment, it has offices in Singapore and Barcelona.

The use of fingerprints as currency is set to be deployed in Japan for the 2020 Olympic Games.

“Biometrics is becoming the way we do things,” says Touché CEO Sahba Saint-Claire.

A version of this appeared in TechinAsia on July 16. Read the full article here.

IBM launches its first blockchain innovation center

Source: Freemalaysiatoday.com

IBM plans to open a blockchain innovation center in Singapore in collaboration with the Singaporean government to digitalize the trade and finance sectors, reports ZDNet. The centre will develop applications and solutions based on blockchain, cybersecurity, and cognitive computing technologies and also engage with small to medium enterprises to create new applications and grow new markets in finance and trade.

The blockchain can translate to strong benefits throughout our entire finance ecosystem including the boosting of local tech capabilities.

As Singapore aims to become Asia’s main financial technology hub, IBM’s initiative perfectly aligns with the government’s goal. The tech company will be working with the main economic planning agency, the Singapore Economic Development Board (EDB) and the Monetary Authority of Singapore (MAS) to accelerate blockchain adoption for finance and trade.

One project, together with PSA International—one of the world’s largest container transshipment ports owned by state investor Temasek Holdings—aims to connect fintech with global trade and logistics.

Singapore is rushing to reinvent itself as Asia’s fintech hub to fend off a regulatory threat to its wealth management industry and revive a sluggish economy.

Singapore is now ahead of its long time rival, Hong Kong, but measures to cut the number of foreign workers and regulations have created a risk averse culture which is at odds with the trial and error approach of fintech startups. This remains a key obstacle in developing this sector in Singapore.

The opening of the new blockchain center will build on IBM’s work with the Linux Foundation Hyperledger Platform. At the end of 2015, IBM was among one of the tech companies to partner with the Linux Foundation to develop an enterprise grade, open-source distributed framework. This aligns with the foundation’s belief that this standard of innovation can transform the way business transactions are conducted across the world.

A version of this appeared in ZDNet on July 12. Read the full version here.

shopback-logo-cropped, ShopBack Dominates iOS Store

Source: Tech in Asia

ShopBack, a service that lets you get cashback on your ecommerce purchases from over 500 merchants in Singapore, launched its iOS and Android apps yesterday. The app is now the top free app in the shopping category in the iOS App Store, and number four (as of July 5 at 9.45am SGT) in the top free apps category in Singapore.

Founded in August 2014, ShopBack has since raised $1.1 million from investors. It acts like an affiliate marketer for ecommerce sites, collecting a fee for every purchase made through ShopBack, part of which is passed to consumers. A variety of marketing methods such as influencer marketing through actor Tosh Zhang, Facebook paid marketing, email marketing to its existing user base, and YouTube videos were used to drive app downloads.

ShopBack Dominates iOS Store

Ecommerce cashback apps are not a new concept

San Francisco company Ebates was doing it since 1998, and in 2014 it was acquired by Rakuten for $1 billion. In Indonesia, Ardent Capital funded Snapcart, offers a cashback app for offline purchases, to encourage O2O behavior. Asia has seen an ecommerce boom only in the past few years, fueled by a combination of venture capital fervor, greater internet and smartphone penetration, and rising incomes in emerging markets. The ecommerce market is nascent but fast growing.

ShopBack doesn’t appear to have generated the same amount of enthusiasm among Android users yet, as it’s nowhere near the top rankings there. For developed countries such as Singapore, the concept may be successful as the market has reached maturity but for many countries such as Indonesia and Philippines where Android users are dominant, adopting the simplest of ecommerce behavior still has a long way to go.

A version of this appeared in Tech in Asia on July 5. Read the full article here.