One of the many marvels of modern technology is e-commerce, the ability to buy goods online, pay for them electronically, and have the merchandise all wrapped up and delivered to the doorstep.
According to The Straits Times, e-commerce sales in Singapore is predicted to hit US$1 billion a year. While this is tiny compared to China’s US$450 billion, for instance, Singapore’s position as a gateway to the Southeast Asian market makes it a relevant indicator of e-commerce trends in Southeast Asia.
Cognizant of this fact, Shopify Asia has launched its first Build A Business competition in Singapore and Malaysia. Here, contestants will create a Shopify store and compete on gross sales within a two-month period.
While this is good news for new e-commerce business owners, some may be deterred from creating their own shops due to a lack of knowledge of the market. Here, in collaboration with Shopify Asia, we at e27 outline three e-commerce trends that are likely to shape the future of the industry in Singapore and beyond.
New payment models
Being a relatively developed economy, it can be said that the majority of e-commerce transactions in Singapore are done via credit card, or through payment intermediaries like PayPal. While this has served the island well, innovations in payment could spell new challenges and opportunities for merchants.
For instance, social media has worked its way to the payments sector through startups like fastacash and Omise. The former enables users to transfer money as well as other tokens of value through social networks and messaging platforms, while the latter lets merchants accept payments via social media channels.
Furthermore, new forms of payment models strive to render the old bank-based credit card system obsolete, and merit a look by the forward-looking e-commerce merchant. One of these is cryptocurrency, of which Bitcoin is the market leader. By letting merchants bypass banks for their payment needs, Bitcoin serves as a double-edged sword that both promises new markets as well as poses identification risks.
Unless one is only getting digital goods online, e-commerce stores need a system to translate online orders into offline delivery. While e-commerce giants like Amazon and Qoo10 benefit from supply chain efficiencies, smaller merchants often have to manage delivery and inventory themselves.
One way innovation is changing the online-to-offline landscape, to the advantage of smaller players, is in bringing the benefits of inventory management and delivery to them at an affordable price. SaaS startups like TradeGecko and same-day courier services like RocketUncle let small e-commerce merchants enjoy what the big players have been taking for granted.
That said, wouldn’t it be better to do away with the hassles of delivery together and pass the cost savings to customers? Recently, Taobao and SingPost have announced the setting up of self-pickup stations across the country, letting customers pick up merchandise at their leisure. If the history of inventory management is any guide, enterprising startups will introduce self-pickup stations for small e-commerce players very soon.
Rise of smaller players
Tying it all up, what these trends signify is that even as big players jostle for market share, Singapore’s market is large enough for small online shops that cater to various niches to thrive. This fact is particularly evident in the proliferation of specialised stores and blogshops in Singapore.
While blogshops have been in Singapore since the early 2000s, most of them have been about fashion, particularly women’s fashion. It was not until the late 2000s and the early 2010s that they have diversified into other product sectors, making use of platforms like Shopify to hawk their wares.
Examples of these small player, blogshop-turned-e-commerce-sites abound, such as eldercare product merchant The Golden Concepts, pet accessory store Dress A Pets, and online grocer Zapfor. While it’s unlikely for them to compete with the big boys such as Redmart and Taobao, they nevertheless provide choices in the otherwise crowded market. After all, choice is king for the modern, discerning, and connected consumer.
This article is presented in partnership with Shopify Asia Build A Business competition, where upcoming entrepreneurs have the opportunity to win S$20,000 and be mentored by gurus like Bikesh Lakhmichand, Co-founder, iTrain; Elim Chew, Founder & President, 77th Street; Genecia Alluora, Founder, Queenz8 Business Group; Xiaxue, Influential Blogger and existing Shopify Merchant; in the areas of entrepreneurship, marketing and ecommerce. Register before the end of January 2015 at build-a-business.shopify.asia