Rapid Growth in Global and Asia Pacific e-Commerce Market
The Asia-Pacific region is projected to become the leading region for business to consumer e-Commerce sales by 2016. The region will account for nearly 35 per cent (US$675 billion) of total sales. Even with the exclusion of China and Japan, two of the largest e-Commerce markets in Asia, the market for the rest of Asia-Pacific remains significant at US$180 billion. This explosion of e-Commerce in the Asia-Pacific is driven by a growing base of digital buyers, and faster adoption of mobile commerce.
South East Asia e-Commerce Market
To ride on this growth, our strategy should start with Southeast Asia (SEA), the home to nearly 630 million people who are generally much younger as compared to other markets. Currently, online shopping makes up 1 per cent of total retail sales in Southeast Asia. This is low when compared to 8 per cent in China and over 10 per cent in the US and UK. With Internet penetration in this region projected to reach 60 per cent in 2020, there is opportunity for fast growth in the SEA e-Commerce market.
Unlike the US, where giant online retailers like Amazon and eBay dominate the market, SEA’s e-Commerce market is highly fragmented and less competitive in SEA. There is room for regional players to establish a foothold here and eventually compete with other global players.
Social commerce is also an emerging trend in SEA, with Indonesian and Malaysian consumers having the highest propensity for social commerce. This is a new sales channel for retailers to compete for additional market share as more consumers spend more of their online time on social media sites. Social media is also a huge data source for retailers to understand consumer insights and engage in targeted marketing.
Goals for e-Commerce
Singapore’s Position in e-Commerce
Singapore’s e-Commerce ecosystem has grown significantly over the past two years. Key digital marketplaces such as Alibaba and Qoo10 have set up regional operations in Singapore to manage their growth in SEA.
Even though e-Commerce sales in Singapore are expected to hit S$4.4 billion in 2015, the sales remain a small percentage of total retail market in Singapore. There is much room for growth in the short term.
Singapore must overcome these challenges to grow our e-Commerce market.
We envisioned that Singapore to be a hub for consumer-centric innovation where companies understand and know their consumers online. To achieve this, we should develop Strategic e-Commerce Trade Lanes in the short to medium term and evolve our hub into a Digital Commerce Trade Bloc in the longer term.
Short to Medium Term: Strategic e-Commerce Trade Lanes
We can develop Strategic e-Commerce Trade Lanes in the short term by creating a One-Stop-Shop Fulfilment Service and developing Asia Consumer Insights.
Asia Consumer Insights
In-Store innovation technologies can help brick-and-mortar retailers enhance consumer experience and bring about Omni-Channel Retail operations. Omni-Channel retailing focuses on creating a seamless consumer experience through any and all shopping channels – mobile, tablet, computers, bricks-and-mortar shops, television, radio, post and catalogue. Shoppers can expect an integrated shopping experience, no matter which channel is used.
These ICM technologies will also improve in-store productivity and provide consumer behaviour analytics. This can help retailers develop solutions to understand consumers in diverse markets and forge new strategic partnerships that could complement and grow their businesses.
In the longer term, the vision is to be the leader among SEA countries in e-Commerce as the digital commerce trade bloc develops. The strategy is to create a Collaborative Commerce Network riding on the e-Commerce wave in SEA. With these capabilities, Singapore can develop the ability to recognise commonalities across markets, scale online expansion strategies for local players, and deepen the knowledge of Asian Digital Consumers.
The Collaborative Commerce Network offers insights to both buyers and sellers by applying Data Analytics to the vast volume of data captured on-line and at physical stores, to derive useful intelligence for the Omni-Channel community. Potential areas where this can be applied include:
- Predictive demand forecasting
- Supply chain optimisation
- New product design and development for various markets
- Digital Marketing
Companies of any size can harness the power of consumer insights and adopt the right strategies for product development, marketing and supply chain management.
Specific Benefits for Retailers
- Leverage on the critical information captured about the customer and act at the right time to motivate customer to make the purchase.
- Use social media and other analyses of in-store and online behaviour, to generate brand awareness, find and engage prospective customers and grow the customer base.
- Improve in-store productivity using innovative technologies.
- Develop solutions to gain insights into complex and diverse markets in the new global economy.
Specific Benefits for Logistic Service Providers
- Develop logistics services that match the consumer’s in-store and online behaviour.
- Collaborate with partners to improve overall supply chain efficiency (e.g. Anticipatory Shipping).
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