Singapore e-commerce market to surpass US$10 billion mark in 2025 – Retail in Asia
Singapore continues to evolve as a major e-commerce market and is expected to grow at a compound annual growth rate of 16.2 percent from S$7.8 billion (US$5.9 billion) in 2021 to S$14.2 billion (US$10.7 billion) in 2025, forecasted GlobalData, a data and analytics company.
An analysis of GlobalData’s E-Commerce Analytics reveals that the strong growth will be supported by rising consumer spending, government support and growing preference for online shopping.
“E-commerce sales in Singapore were adversely affected by the COVID-19 pandemic with consumers becoming prudent during the crisis. The pandemic also affected high-value purchases such as travel and accommodation further impacting e-commerce sales in 2020,” commented Nikhil Reddy, Payments Senior Analyst at GlobalData.
However, with the easing of COVID-19 restrictions and revival of economy, the market rebounded in 2021. According to GlobalData’s E-Commerce Analytics, e-commerce sales are estimated to grow by 18.3 percent in 2022 to reach S$9.2 billion (US$7.0 billion).
Reddy added: “Although COVID-19 impacted the e-commerce growth, the social distancing measures and lockdown restrictions pushed consumers to online channels even for day-to-day purchases. The shift in consumer buying behavior now continues despite opening of physical stores.”
Singapore has also been taking various initiatives to drive e-commerce adoption among small businesses by offering benefits in the form of subsidies. As a part of its ‘E-Commerce Booster Package’, the government offered subsidies to retailers for opting online channels and selling products online via participating e-commerce platforms such as Lazada, Shopee and Zalora. Eligible retailers were offered up to 80 percent, capped at S$8,000 (US$6,052.89), of setup and selling costs in subsidies.
The growth in online shopping will benefit electronic payments growth in the country. According to GlobalData’s 2021 Financial Services Consumer Survey for online purchases, payment cards accounted for 43 percent of all the e-commerce sales in Singapore.
Additionally, alternative digital payment solutions such as PayPal, Apple Pay, Grab Pay, and Google Pay have gained prominence in the country and collectively account for 30.6 percent market share, up from 27.6 percent in 2020. As consumers continue to embrace e-commerce amid pandemic, these payment solutions will be benefited.
“Although e-commerce market growth was derailed by the pandemic mainly due to decline in consumer spending, it also brought a shift in consumer buying behavior towards online channels. This along with the government’s conducive initiatives will support e-commerce growth in the country over the next few years,” concluded Reddy.