The Survey on E-Commerce 2000, conducted jointly by the Infocomm Development Authority of Singapore (IDA) and Department of Statistics (DOS) reveals that the e-commerce revenues in Singapore have grown significantly over ...
Singapore, 9 May 2001 | For Immediate Release
The Survey on E-Commerce 2000, conducted jointly by the Infocomm Development Authority of Singapore (IDA) and Department of Statistics (DOS) reveals that the e-commerce revenues in Singapore have grown significantly over the past two years. This is a clear indication, that businesses are willing to take risks and engage innovative business models leveraging on Internet technologies, despite weak market sentiments. Likewise, strong consumer spending online shows that Singaporeans are ready to embrace the e-lifestyle. The highlights of the survey findings was announced by Mr Lim Swee Say, Acting Minister for Environment and Minister of State for Communications and IT at the eAwards1 Gala Dinner this evening.
This is the second such survey conducted since 1999, with the objective of studying the development and performance of the e-commerce sector in Singapore. The survey results indicate that companies in Singapore are increasingly embracing the Internet as an integral part of their competitive strategies. In addition, the survey findings provide useful indicators for companies to better understand the e-commerce landscape in Singapore.
Overall, more companies started e-Commerce activities last year compared to 1999. Out of every 100 companies with e-Commerce capabilities, 24 started e-Commerce activities in year 2000. This means that the number of companies that started e-Commerce activities grew by about 30% last year.
Out of the 9000 companies surveyed, 98.7% of them have access to the Internet, with online sales and purchases; online government services and software downloads, being commonly-used online applications
Business-to-Business (B2B) activities
Specifically, B2B e-Commerce2 sales value grew from $40b in 1999 to an estimated $92b in 2000. This figure is projected to reach $109b in 2001. This healthy growth trend was seen across major sectors of the economy. Leading this growth is the Finance and Banking sector which accounted for a transaction value of $52b in 2000. Compared to 1999, the sector with the highest growth rate of 265% last year was the Transport, Storage and Communication sector. The other major growth sectors of B2B sales are the Wholesale & Retail, and Manufacturing sectors.
The survey also highlighted that Singapore companies are increasingly conducting online commerce with regional neighbours. This was evident in the faster rate of increase registered by e-Commerce exports, as compared to domestic B2B sales. The key markets for e-Commerce exports include Malaysia, Indonesia, Taiwan, China, South Korea and Japan. This trend is a promising sign, supporting the vision to develop into a trusted e-Business hub in Asia.
While companies are leveraging the Internet to reach out to more customers, they are also increasingly using the Internet to transform and interconnect their value chains. This was demonstrated by the growth in online procurement sales, which increased from $5.44b in 1998 to $10.9b in 1999. Last year, the Singapore industry used e-procurement tools to purchase goods and service amounting to an estimated $17.9b. This figure is projected to reach $25b in 2001. This upward trend shows that more companies are capitalising on the benefits of purchasing online. It was also observed that companies in Singapore are using the Internet to purchase goods and services from companies in the United States, Malaysia and Japan.
The revenue generated by companies from e-Commerce infrastructure or supporting services is growing. There are three layers of services: Internet Infrastructure Services3, Internet Application Infrastructure Services4 and Internet Intermediary Services5 with the latter projected to register the highest growth in 2001. The increasing demand for e-Commerce infrastructure services implies that companies see the importance of developing and enhancing their Internet capabilities.
Business-to-Consumer (B2C) Activities
While companies are digitally transforming their value chains, Singapore's consumers are also taking advantage of the conveniences offered by the Internet. The fact that Singaporeans are beginning to embrace an e-lifestyle is evident in the growth in B2C e-commerce6, which has grown from $36m in 1998 to $200m in 1999. Sales value for the year 2000 increased five-fold to an estimated $1.17b. By end-2001, total consumer spending over the Internet is expected to reach $2.75b. The leading industries were the Finance & Banking sector which generated over 70% of total B2C sales in 1999, followed by the Real Estate & Businesses, Manufacturing, and the Wholesale & Retail sectors. While Singaporeans are engaging in online activities, it was observed that a large proportion of B2C sales is also being conducted by consumers from Malaysia, Thailand, USA and Japan.
The survey illustrates that the overall e-commerce landscape in Singapore is still vibrant despite the economic slow down. As explained by Dr Kaizad Heerjee, Assistant Chief Executive, Online Development at IDA, "The sharp increase in e-commerce activities is encouraging and strongly indicative of the digital transformation occurring in the Singapore industry. However, we have a long journey ahead, and the survey results suggest that we are in the right direction towards e-powering our businesses and consumers to build Singapore as a trusted hub in Asia."
ISSUED BY CORPORATE COMMUNICATION DEPARTMENT
INFOCOMM DEVELOPMENT AUTHORITY OF SINGAPORE
Notes to Editor:
1 The eAwards is a collaboration between private sector e-commerce consortia ec.Think and CommerceNet Singapore. Supported by the IDA, the eAwards recognise contributions made by public and private sector organisations to Singapore's eEconomy.
2 B2B E-Commerce refers to all forms of wholesale commercial transactions occurring over an exclusive e-Commerce network (for example, BookNet, ShopNet) or an open network (for example, Internet and Singapore ONE) which include online trading of goods and services, online sourcing and online procurement process. Foreign exchange, futures, derivatives and other financial trading instruments are excluded.
3 Internet Infrastructure Services - refer to services or products needed to create an IP-based network infrastructure. For example, network services, hosting services, end-user networking equipment.
4 Internet Applications Infrastructure Services - refer to services or products that build upon the IP infrastructure and make it technologically feasible to perform business activities online. In addition to software applications, this layer includes the human capital involved in the deployment of e-commerce and e-business applications. For example, search engines, web development, web databases and payment software. Also includes Internet and e-business consultants.
5 Internet Intermediary Services - refers to products/services that facilitate the meeting and interaction of buyers and sellers over the Internet. For example, web content/portal providers, online B2B exchanges/marketplaces, portal aggregators, online brokerages, travel agents, Internet ad brokers, online advertisers.
6 B2C E-Commerce refers to all forms of retail commercial transactions occurring over an open network (for example, Internet and Singapore ONE) which include online selling of goods and services directly to consumers.
About Infocomm Development Authority of Singapore
The Infocomm Development Authority of Singapore (IDA) is a dynamic organisation with an integrated perspective to developing, promoting and regulating info-communications in Singapore. In the fast-changing and converging spheres of telecommunications, information and media technologies, IDA will be the catalyst for change and growth in Singapore's evolution into a vibrant global info-communications technology centre. For more information, please visit www.imda.gov.sg.
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