- Huge potential for local SMEs with B2C e-commerce export value in Singapore forecast to grow from S$1.4B in 2021 to S$3.5B by 2026, per Amazon’s first-of-its-kind report
- 87% of SMEs find e-commerce critical to expand globally, with greater sales growth expected overseas than domestically, reveal report findings
SINGAPORE – 11 October 2021 – (NASDAQ:AMZN) – The annual value of business-to-consumer (B2C) e-commerce exports in Singapore is estimated at S$1.4 billion in 2021 and could reach S$3.5 billion in 2026 if micro, small, and medium-sized enterprises (MSMEs) accelerate their pace of using e-commerce to sell overseas. Currently, MSMEs are estimated to contribute 45% of Singapore’s B2C value of e-commerce exports in 2021.
These are findings from Amazon’s new ‘Local Sellers, Global Consumers: Capturing Singapore’s e-commerce export opportunity’ report, which surveyed over 300 MSMEs from Singapore, and was released at the inaugural ‘2021 Amazon Expo, Seller Boot Camp’. The report, prepared by consulting firm AlphaBeta, is the first-of-its-kind in analysing the size of Singapore’s e-commerce export potential, the perspective of local MSMEs, and best practices to achieve that potential.
Over 3,000 SMEs from Singapore, Malaysia, and the Philippines are expected to join this Seller Boot Camp, a 3-day virtual event hosted by Amazon from 11-13 October 2021, to equip themselves with the tools, resources, and knowledge to seize cross-border opportunities, increase their customer reach, and expand their business globally. During the event, Enterprise Singapore’s (ESG) Executive Director (ICM & Digitalisation), Mr Lee Yee Fung, will also share how the Singapore government and industry experts are working together to help local businesses unlock opportunities with e-commerce.
Mr. Bernard Tay, Head of Amazon Global Selling, Southeast Asia, said, “We are on a mission to help MSMEs start local, grow global. Local businesses of any size can benefit from this report to understand a range of topics, from business models and export regulations to consumer needs and foreign competition. Along with the report insights, our first-ever Seller Boot Camp comes as a timely opportunity for small enterprises to identify the current gaps in their operations and arm themselves with the knowledge, resources, and connections to sustainably expand their business. Not only can MSMEs learn from Amazon, but they can also connect with Enterprise Singapore and our key partners to glean insights, additional support, and an expanded network to grow globally.”
Sizeable regional growth opportunities for e-commerce exports
According to the report, if current e-commerce adoption trends continue, the annual value of B2C e-commerce exports in Singapore is expected to grow at 5% per year to reach S$1.7 billion in 2026, from S$1.4 billion in 2021. However, if MSMEs accelerate their use of e-commerce to export, this value is projected to increase more than two-fold and reach S$3.5 billion in 2026.
Singapore MSMEs surveyed anticipate greater sales growth prospects overseas (35%) than at home (13%), with Asia Pacific countries – Malaysia, China, Australia, Indonesia and Thailand – seen as the top five e-commerce export markets in five years’ time, by 2026.
Currently, close to one-quarter (24%) of MSMEs in Singapore conduct B2C e-commerce, of which, more than 90% use it for export.
87% of those surveyed locally agreed that e-commerce is critical for their ability to export, with top motivations including the ability to reach overseas customers, access to sales and marketing tools that are available on e-commerce marketplaces, and support for logistics and payments provided by these marketplaces. For 35% of surveyed Singapore MSMEs that export via e-commerce, more than half of their annual e-commerce sales were generated from abroad.
Key challenges faced by local MSMEs in e-commerce exports
Amidst the opportunities for growth and global expansion through e-commerce, MSMEs surveyed in Singapore revealed that key challenges can be narrowed down to three categories – barriers in cost, regulation, and information and capabilities.
High cross-border shipping costs is the most common challenge faced by Singapore MSMEs surveyed, with 81% citing it as a major barrier. While Singapore offers a robust range of grants to support local businesses on their e-commerce export journeys, about one-third of small enterprises (32%) surveyed admitted that they will find further support valuable.
Additionally, over three-fourths (78%) of MSMEs surveyed cited a lack of clarity in import regulations as a key barrier to selling overseas via e-commerce. Only 19% believe that current advisory support on importing regulations is sufficient.
Lastly, 72% of MSMEs surveyed believe they lack the ability to compete with other sellers globally, and 71% admitted that they are unsure of foreign consumers’ demands and preferences.
Tackling current challenges: Start local, go global with Amazon
Amazon offers various resources for thousands of local sellers to tackle their current barriers and complement existing efforts by industry and government agencies.
Most recently in Singapore, Amazon launched its IP Accelerator programme to make it easier and more cost-effective for small businesses to protect their brands by obtaining trademarks and tackling goods infringement in Amazon’s stores. ESG will also support Singapore businesses defray some of the costs associated with internationalisation, such as Intellectual Property Protection services in North America offered under the Amazon IP Accelerator programme.
Enterprise Singapore’s Executive Director (ICM & Digitalisation), Mr. Lee Yee Fung, said, “Key players in the e-commerce landscape, such as Amazon, have an established ecosystem of solution providers and suite of resources to assist sellers in deepening their digital capabilities for market expansion. We hope participants at the 2021 Amazon Expo, Seller Boot Camp will take the opportunity to acquire new knowledge about selling overseas and tap the range of support that can help them do so. We look forward to partnering more Singapore businesses to grow their sales avenues and international footprint through e-commerce.”
Amazon has supported many homegrown businesses such as Hegen, Malt and Wine Asia, and Tack. Details on the success of these MSMEs is included in appendix A.
To further help sellers manage cross-border shipping costs and logistics, Amazon’s over 225 tools also include the Fulfilment by Amazon (FBA) service through which Amazon picks, packs, and ships products, as well as takes care of customer service and returns, across its 20 stores globally. Locally, Amazon is also waiving its monthly seller subscription fees until 31 December 2022[1].
Other resources include the Amazon Seller App for local sellers with accounts on Amazon.sg to track sales and manage their business via mobile, the Marketplace Appstore, a one-stop shop to discover third-party applications and services for automating tedious business aspects, and the Seller Forum, a resource for first-hand advice from fellow business owners on selling with Amazon.sg. Sellers can also join the Sell on Amazon Singapore Facebook page to connect with the community of sellers on Amazon.sg. These resources are in addition to easy listing tools, payment processing and credit card fraud protection, and promotional features that businesses of all sizes on Amazon.sg can use to be discovered by customers and improve sales.
Over the three days at 2021 Amazon Expo, Seller Boot Camp, MSMEs can hear from industry experts and Amazon’s partners who will dive into topics ranging from cross-border e-commerce and payments to customer and sales conversion strategies, to help small businesses scale globally and improve customer reach.
To download the ‘Local Sellers, Global Consumers: Capturing Singapore’s e-commerce export opportunity’ report, visit https://alphabeta.com/our-research/capturing-the-e-commerce-export-opportunity-in-singapore/. A full report which includes findings from other ASEAN countries will be released at a later date.
To learn more about the small and medium-sized businesses growing with Amazon.sg, visit: https://amazon.sg/shoplocal. More information about selling on Amazon can be found here: https://www.amazon.sg/sell.
Appendix A: Success stories of local small businesses selling on Amazon.sg
- Hegen: In April 2020, Hegen started retailing its products on Amazon.sg and has since seen steady growth in revenue. During Prime Day 2021, Hegen sold 5x as many products as compared to a year ago. Aside from Singapore, Hegen also sells its products on Amazon.com and Amazon.uk to reach a global audience online.
- Malt and Wine Asia: By selling via Amazon, the brand has been able to offset its initial onboarding costs of selling online, upskill digitally to build its e-commerce capabilities, and navigate the disruptions caused by COVID-19. It also uses Fulfilment by Amazon (FBA) to deliver products to consumers and overall, has boosted sales by 3x in just 5 months.
- Tack: Founded in 2019, Tack started selling on Amazon.sg in April 2021 and within 5 months, expanded internationally via Amazon.com – all while being based in Singapore. It is now eyeing a global expansion with Amazon and expects its shoppers on Amazon.com to contribute to 25% of its GPS’ sales in the first year, followed by a 40% growth in its GPS’ sales in the next year.
About Amazon
Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Amazon strives to be Earth’s Most Customer-Centric Company, Earth’s Best Employer, and Earth’s Safest Place to Work. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle, and The Climate Pledge are some of the things pioneered by Amazon.
