Some of the biggest e-commerce companies in the world are based in Singapore, including Lazada, Shopee and Carousell, which are all valued at over US$1 billion. The success of these unicorns has inspired a slew of retail startups in recent years and led to fierce competition for the city’s digitally savvy consumers. Some of these startups are now best placed to meet the rising demand for online shopping in Singapore, which like many countries, saw bricks-and-mortar retail sales fall dras
rastically due to the pandemic. And a new program from TiE Singapore and Google Singapore is working to ensure that business owners and entrepreneurs from underserved communities, including young entrepreneurs, women and immigrants are among them. We recently spoke with Google Singapore’s country director Ben King about what consumer behaviour looks like in Singapore and why he’s optimistic about retail’s recovery in 2021. Inside Retail: How would you describe the state of online retail in Singapore compared to other markets around the world? Ben King: Online retail has emerged as the preferred way to access goods and services all around the world during the pandemic. Even in Singapore, where we see high digital connectivity, there has been continued growth in the adoption of digital services – based on our latest edition of the e-Conomy SEA report, almost a third (30 per cent) of all digital service users were first-timers in 2020, and more than nine in 10 intend to continue their usage, post pandemic. This newfound online habit driven by the pandemic has propelled the e-commerce Gross Merchandise Value (GMV) in Singapore to US$4 billion in 2020. This is an incredible growth of 87 per cent since 2019, making it the strongest growing vertical in Singapore’s digital economy last year. We’re also seeing the adoption of these e-commerce behaviours to be long-lasting among consumers – Singaporeans’ frequency of online purchases doubled during the Circuit Breaker [the government’s stay-at-home order], and continued after with a 20 per cent increase as compared to pre-lockdown. Given these trends, we are expecting e-commerce in Singapore to continue to grow this year as online habits stay. While we see similar e-commerce trends across Southeast Asia, what continues to set Singapore apart is its position as a regional headquarters for multiple e-commerce unicorns such as Shopee and Lazada, allowing the nation to be a key enabler of the e-commerce boom in Southeast Asia. IR: What are the overarching trends in consumer behaviour that you’re seeing right now? BK: As we look at the year ahead, we believe that online retail will continue to thrive and these three trends will drive it forward: 1. A non-contact revolution. What we continue to observe is a delay and return to normal habits with many people continuing to limit their movement to essential trips to buy groceries or to travel for work. With people making fewer trips to physical shops, there’s an opportunity for advertisers to increase their basket size. In Singapore, we saw about a 50 per cent increase in online basket size as more consumers purchased essential and discretionary items such as groceries online. We think that this is a consumer behaviour that was anticipated pre-Covid, and will continue to accelerate in the future. Retailers should keep their online retail strategy top of mind and continue to invest in optimising their digital presence so they can provide a relevant, frictionless, and helpful shopping experience for their customers. 2. More diversity in e-commerce. It’s no surprise that there has been an increase in purchases online. However, the pandemic has also increased merchant onboarding, with offline retailers being forced to adapt. Search interest for “Selling Online” increased by 64 per cent YoY between 2019 and 2020 in Southeast Asia as traditional retailers and brands looked for more ways to sell online. To help retailers with their shift online, Google has been offering skills training through Grow with Google and sharing research and insights to inform their business decisions. We’ve also launched a playbook and webinar series on how to better manage digital storefronts. As the sector matures, the growth in online sellers will expand the collective range of online marketplaces – and products – in the region. 3. Easy, intuitive, and reliable omnichannel experiences to retain shoppers. As e-commerce grows, retailers shouldn’t forget about bricks-and-mortar shoppers. Many people still appreciate the immediacy and tangibility of shopping in a physical store. At the same time, a big part of the retail journey – be it the research or decision making phase –happens online, even if the final purchase happens in-store. Therefore, it is imperative for retailers to create a seamless omnichannel experience from online to offline.