For selling on Amazon.sg
Why South East Asia is the hottest e-commerce region and how Amazon sellers can ride the wave of growth
By 2030, the South East Asian economic bloc of ten nation countries is expected to be the 4th largest region by combined GDP (behind the EU, US and China), and have 500 million emerging middle-class customers¹. While the growth of the region is exciting, the region’s e-commerce infrastructure is generally still in nascent development stages. What are the key e-commerce trends and challenges to look out for? And what does it mean for Amazon sellers?
Key e-commerce statistics in South East Asia
Digital shopping in South East Asian countries now outstrips China, at a 1.6x growth rate². Since the start of the pandemic in December 2019 till end year 2021, the total number of new digital consumers (i.e. consumers who have made online purchases for the first time) in Singapore, Malaysia, Indonesia, the Philippines, Thailand, and Vietnam is forecasted to be equivalent to the population of the entire United Kingdom in 2021². The numbers are impressive – suggesting future growth opportunities rarely seen in other economic regions.
South East Asian country comparisons
Each individual country in South East Asia tells a slightly different story in terms of economic potential, infrastructure readiness for e-commerce, logistics and payments infrastructure. South East Asia is a region of both diversity and contrasts. It is the region for digital innovation with many start-ups and unicorns, from Grab to Gojek, vying for South East Asian digital-first customers across areas of everyday spend. Singapore is one of the richest countries in the world by GDP per capita (PPP) and ranks 4th worldwide in terms of number of unicorns³. It is also the region where 290 million are underbanked or unbanked as of 2020⁴.
To fully understand the complexities of the e-commerce landscape in South East Asia, we need to look at the e-commerce potential of individual member countries along all key dimensions for a complete picture.
To fully understand the complexities of the e-commerce landscape in South East Asia, we need to look at the e-commerce potential of individual member countries along all key dimensions for a complete picture.
Despite high levels of e-commerce adoption in the region, per-capita spend in South East Asia in 2020 is still significantly lower than the global average, especially when it comes to purchases of consumer goods. With the exception of Singapore, with an average e-commerce spending of USD 785 in 2020, the typical shopper in South East Asia spends less than a quarter of the global average when it comes to online spending as of 2020⁵. We also see different online behaviors for developed and developing South East Asian nations, from Singapore to Vietnam.
While digital commerce is a global trend, preferred payment methods are still local as of 2020 according to World Pay, with developed nations such as Singapore preferring Credit/Debit Cards for online checkouts (56%) while developing nations such as Thailand or Vietnam having much lower Credit/Debit Card preference and penetration (21% and 16% respectively). Cash-on-delivery ranks higher in these nations at 22% in Thailand and 28% in Vietnam⁶.
Indeed, the payments and logistics infrastructure, as well as the ease of doing business, IP protection rights and preferences of customers vary greatly in South East Asia. While the growth in Gross Merchandising Value (GMV) is promising, e-commerce sellers in this region need to highly localize their strategies and research each country’s barriers and opportunities carefully.
Why Singapore is the easiest entry point to South East Asia
With English and Chinese both recognized as official languages, and ranked #2 worldwide for ease of doing business by the World Bank⁶, #1 for Customs Clearance⁷ and #1 in Asia for IP protection⁸, Singapore is South East Asia’s easiest entry point. What Singapore lacks in size, it makes up for in ambition, ease of doing business, purchasing power and connectivity to Asia and the South East Asian nations. Known as ‘Asia-light’ or ‘Asia 101’, up to 46% of multinational companies base their Asia headquarters in Singapore thanks to its rule-of-law, stability and access to the region⁹. Setting up a business in Singapore takes only 1.5 days compared to South East Asia’s average 34.9 days. Customs efficiency in Singapore makes importing goods more frictionless with an average import time of 3.0 hours versus a staggering 64.3 hours for South East Asia¹⁰.
Amazon in South East Asia
Currently, Amazon.sg is Amazon’s first store in South East Asia. Start selling and diversifying your revenues to South East Asia with Amazon Singapore. Here are an additional 4 reasons why expanding your Amazon Store to sell on Amazon.sg can be a worthwhile effort:
1. The Build International Listings tool can help replicate your listings to Singapore easily
2. Fulfillment by Amazon can help eliminate your fulfillment headaches and help you scale your business
3. If you are looking for service providers to help with logistics and customs, or marketing and IP registration services, the Singapore Service Provider Network lists trusted providers that can help you ship your goods internationally into Singapore and more
4. The Amazon referral fees on many top categories including consumer electrics, home, kitchen, toys and games on Amazon.sg are less than Amazon US. Furthermore, the Professional Selling Plan monthly subscription fees are waived till 31 Dec 2022 (Usual Price: SGD 29.95). T&Cs apply.
2. Fulfillment by Amazon can help eliminate your fulfillment headaches and help you scale your business
3. If you are looking for service providers to help with logistics and customs, or marketing and IP registration services, the Singapore Service Provider Network lists trusted providers that can help you ship your goods internationally into Singapore and more
4. The Amazon referral fees on many top categories including consumer electrics, home, kitchen, toys and games on Amazon.sg are less than Amazon US. Furthermore, the Professional Selling Plan monthly subscription fees are waived till 31 Dec 2022 (Usual Price: SGD 29.95). T&Cs apply.
Sources:
1. Singapore Ministry of Trade & Industry, 2020: https://www.mti.gov.sg/-/media/MTI/improving-trade/FTAs/All-you-need-to-know-about-SG-FTAs-and-DEAs.pdf
2. Bain & Company and Facebook, 2021: Southeast Asia, the home for digital transformation A SYNC SOUTHEAST ASIA REPORT
3. Business Times Singapore, 2021: https://www.businesstimes.com.sg/garage/singapore-shares-fourth-spot-among-best-countries-for-unicorn-startups
4. Nikkei Asia, 2021: https://asia.nikkei.com/Business/Technology/Grab-and-others-see-big-chance-in-ASEAN-digital-banking
5. We Are Social, 2021: Digital 2021Singapore Report: https://wearesocial.com/sg/digital-2021-singapore
6. World Pay 2021: The Global Payments Report
7. Datareportal, 2019: https://datareportal.com/reports/digital-2019-spotlight-ecommerce-in-southeast-asia
8. The World Bank, 2020: https://www.doingbusiness.org/en/data/exploreeconomies/singapore
9. Singapore Economic Development Board, 2020: https://www.edb.gov.sg/en/our-industries/headquarters.html
10. Statista: Singapore Country Report 2021
11. The World Economic Forum Global Competitiveness Report, 2019
1. Singapore Ministry of Trade & Industry, 2020: https://www.mti.gov.sg/-/media/MTI/improving-trade/FTAs/All-you-need-to-know-about-SG-FTAs-and-DEAs.pdf
2. Bain & Company and Facebook, 2021: Southeast Asia, the home for digital transformation A SYNC SOUTHEAST ASIA REPORT
3. Business Times Singapore, 2021: https://www.businesstimes.com.sg/garage/singapore-shares-fourth-spot-among-best-countries-for-unicorn-startups
4. Nikkei Asia, 2021: https://asia.nikkei.com/Business/Technology/Grab-and-others-see-big-chance-in-ASEAN-digital-banking
5. We Are Social, 2021: Digital 2021Singapore Report: https://wearesocial.com/sg/digital-2021-singapore
6. World Pay 2021: The Global Payments Report
7. Datareportal, 2019: https://datareportal.com/reports/digital-2019-spotlight-ecommerce-in-southeast-asia
8. The World Bank, 2020: https://www.doingbusiness.org/en/data/exploreeconomies/singapore
9. Singapore Economic Development Board, 2020: https://www.edb.gov.sg/en/our-industries/headquarters.html
10. Statista: Singapore Country Report 2021
11. The World Economic Forum Global Competitiveness Report, 2019
Disclaimer:
Whilst Amazon Asia-Pacific Holdings Private Limited ("Amazon") has used reasonable endeavours in compiling the information provided, Amazon provides no assurance as to its accuracy, completeness or usefulness or that such information is error-free. In certain cases, the blog is provided by a third-party seller and is made available on an "as-is" basis. Amazon hereby disclaims any and all liability and assumes no responsibility whatsoever for consequences resulting from use of such information. Information provided may be changed or updated at any time, without any prior notice. You agree to use the information, at your own risk and expressly waive any and all claims, rights of action and/or remedies (under law or otherwise) that you may have against Amazon arising out of or in connection with the use of such information. Any copying, redistribution or republication of the information, or any portion thereof, without prior written consent of Amazon is strictly prohibited.
Whilst Amazon Asia-Pacific Holdings Private Limited ("Amazon") has used reasonable endeavours in compiling the information provided, Amazon provides no assurance as to its accuracy, completeness or usefulness or that such information is error-free. In certain cases, the blog is provided by a third-party seller and is made available on an "as-is" basis. Amazon hereby disclaims any and all liability and assumes no responsibility whatsoever for consequences resulting from use of such information. Information provided may be changed or updated at any time, without any prior notice. You agree to use the information, at your own risk and expressly waive any and all claims, rights of action and/or remedies (under law or otherwise) that you may have against Amazon arising out of or in connection with the use of such information. Any copying, redistribution or republication of the information, or any portion thereof, without prior written consent of Amazon is strictly prohibited.
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