- The Straits Times
It’s no secret that while Singaporeans love to shop online, there are huge growth potentials for local SMEs when it comes to bringing their services online.
The e-commerce market in Singapore is expected to be worth US$5.4 billion by 2025, according to a 2016 report by Temasek and Google, but many firms still seem unwilling to bring their operations online.
At Google’s Go Global event today, Gilberto Gaeta, head of Google marketing solutions for Singapore, Malaysia, Philippines and Emerging Markets, said that Singapore businesses have the potential to expand their businesses to the region and globally if they are given the right tools to do so.
There are various reasons why, despite world-class Internet connectivity and a high mobile penetration rate, Singapore e-commerce continues to lag behind other markets such as US and China.
Gaeta says the lag can be traced to both user-related behaviour and business culture in Singapore.
“There are good reasons why we are behind other markets – retail in Singapore is not going to die, and that’s good,” he says.
“But there are also less good reasons. We need to make progress in terms of payments (and) in terms of the experience that we provide online to increase the trust and confidence in users to move to e-commerce.”
Here’s how he broke it down to Business Insider:
1) Retail is still thriving
Singaporeans enjoy shopping at physical retail stores and retail “is not going to die any time soon” he says. Just take a walk down Orchard Road on weekend nights and you will see that is true. Businesses which enjoy that foot traffic know that their consumers are after the physical store experience, and thus delay or shy away from venturing into the digital realm.
As a well-connected and small city, it is also very easy for Singapore consumers to travel to physical stores.
2) Cash is still king
Singapore consumers are also cash-reliant. Compared to China, where consumers rely heavily on digital payments, Singapore consumers and businesses still exchange cash frequently. Some e-commerce businesses in Singapore even offer cash-on-delivery services to shoppers.
A Straits Times article in March this year identified the ease of getting cash and the accessibility of ATMs in Singapore as a factor. Cash in circulation in Singapore is 8.8 per cent of GDP, compared with 4.4 per cent in Australia, the article said.
The article also said that high costs and complexities of various payment systems have delayed SME adoption of cashless payments.
3) Lack of digital assets
In Singapore, many SMEs lack the digital assets required to go online, Gaeta says.
“When we look at the experiences that SMEs and companies in general are providing on mobile, they’re on average a bit poor,” he tells Business Insider.
In fact, Singapore mobile sites have an average 3G load time of 9.32 seconds, slower than the APAC average of 8.48 seconds, and much slower than the global average of 7.55 seconds.
What happens as a result is that consumers in Singapore tend to do their research online and complete their purchases offline.
According to Google, this is where its Go Global programme can help. Through various tools, Google aims to provide more SMEs with the know-how to improve their businesses’ mobile experience, increase discoverability, and obtain measurements for better digital strategies.