Competition Racks Up in Singapore’s E-commerce Scene

Competition Racks Up in Singapore’s E-commerce Scene

Singapore’s e-commerce sales are estimated to reach US$7.4 billion in 2020, according to a report done by BMI Research. They firm said e-commerce players can find growth in the “small but mighty” due to its fully urbanised populations, wealthy consumers, and highly developed logistics networks.

A report from Maybank Kim Eng Research Pte released on February estimated Singapore’s online share of total retail sales at 5.4 percent, the highest among Southeast Asia’s five top economies. Malaysia was second, at 2.7 percent. The report signified Singapore’s position as a highly potential market for online shopping.

Being the country with the largest basket size and huge lead in GDP among SEA countries, as reported from State of E-commerce, the attractive market of the small island had lured many of the biggest e-commerce players and SMEs in the region to invest in the local scene. The Map of E-commerce by iPrice released their Q2 results for year 2018 and the updated report showed several interesting insights of the current e-commerce market in Singapore.

Shopee moves up to 3rd place in term of average monthly web visits

According to the report, Shopee has seen an increase in their ranking and is now at the 3rd place for average monthly web visits. Shopee accumulated an average of 1.8 million visitors during Q2, as taken from SimilarWeb, a digital market intelligence platform.

In Q1 2018, Shopee ranked number 6 in the list, behind eBay, EZBuy and Zalora. However, they managed to climb up the list to number 3, surpassing the previous 3 merchants. Shopee is now behind Qoo10 and Lazada which both ranking at number 1 and 2 respectively on the list.

Adding on to that, Shopee is the only merchant that saw an increase of 3 positions in term of ranking for average monthly web visits in just one quarter, ever since the Map of E-commerce is launched for Singapore in Q3 2017.

In March 2018, just one month before the start of Q2, Shopee launched its new marketplace named China Marketplace aimed to ease cross-border barriers often cited by online shoppers in Singapore. This came after a survey done by the company found that more than 60% of Singaporeans bought products from China at least once a month. “We believe Shopee’s China Marketplace is the perfect solution”, cited Zhou Junjie, Shopee’s chief commercial officer and the country head of Singapore.

Sea, the Singapore technology firm which owns Shopee, has also raised new funds with a total amount of US$575 million during mid Q2 this year. Forrest Li, Sea chairman and group CEO, said that the the additional capital will help Sea to continue to capture the significant growth opportunity ahead of them, particularly in the highly promising e-commerce sector where Shopee is already a regional leader.

Both significant events might be the main drive to such a rapid growth in the ranking on the list. Named as one of Asia’s most effective workspaces by HRMAsia, Shopee also see the highest growth in term of employment rate, with 14% increase in the number of employees as obtained by data from Linkedin. The number of employees grew from 391 people in Q1 to 447 people in Q2. “A huge part of our strong growth has been due to the magic that happens when you bring highly motivated, smart people together and give them the space to create.”, quoted Lim Teck Yong, Head of People Team, Shopee.

 Amazon Enters the List, Positioning Among Top 15 for Most Visited Sites

Featured on Map of E-commerce for the first time this quarter, one of the world’s biggest retailers, Amazon is positioned among the top 15 for highest average monthly web visits. Amazon ranked at number 13 with a total of 205000 visits for Q2 2018.

Based on data collected from App Annie, Amazon ranked at number 6 for both AppStore and PlayStore. It is also the youngest player in the top 6. The top 5 players are dominated by merchants which entered the market for more than 3 years, as opposed to Amazon which has only been in the market for 1 year.

Last July 2017, Amazon entered with much anticipation into Singapore’s e-commerce scene. The e-commerce giant launched its two-hour delivery service Prime Now in Singapore. “ The country’s density works really well for us,” said Henry Low, Asia Pacific director of Amazon Prime Now. “For the first time, we can launch [Prime Now] and have it open to the entire country at the same time,” Low said.

During mid Q2 this year, Singapore participate for the first time ever for Amazon’s largest sales event, Prime Day. The customers ordered “more items than ever before” during Prime Day – surpassing Cyber Monday, Black Friday and the launch of Prime Now in July 2017 when comparing the same 36-hour period, Amazon said.

The event also welcomed more members in Singapore joined Prime on 17 July than on any other single day since its launch.

Qoo10 and Lazada maintain their lead in web visits and app ranking respectively

Qoo10 is still leading the average monthly web visits, positioning at number 1 with 9.9 million visits this quarter. Cited as one of the earliest e-commerce players in Singapore, Qoo10 has been leading the web visits since Q3 2017 based on the Map of E-commerce. According to CGS-CIMB research, Qoo10 captured the largest market share of Singapore’s online retail sales (value) in 2017 at 32.6%.

Chayadi Karim, research analyst from Euromonitor International said much credit could be given to Qoo10 for establishing itself before the internet shopping “revolution” is taking hold in Singapore as the main reason of its large share in the market. “Qoo10 was in a prime position to take full advantage of the boom in internet retailing”, as told by him in the interview.

On the other hand, Lazada, the Alibaba-backed company, has also been maintaining their position of number 1 for both AppStore and PlayStore ranks. Shopee and Qoo10 are consistently ranking at 2nd and 3rd place respectively.

Anticipation raised for second half of the year in Singapore’s e-commerce scene

The e-commerce competition in Singapore is getting stiffer as players try to increase their market share in the lion city. The rest of the year will see many changes from the players to further sustain and improve their strategy to win the market.

Qoo10, the current leading player in the list, has revealed they will be focusing a lot on Singapore market this year with more cash ready in hand from the recent acquisition. Earlier this year, eBay paid US$573 million to acquire Qoo10 Japan, as revealed by the filing. After the sale, Qoo10 will spend 80% of its total budget on the Singapore market, said Cho Hyun Wook, the country manager of Qoo10 Singapore. “In Singapore, they see meaningful growth. It might be the only country they can see the ROIs (return on investments) in South-east Asia.”, cited him in an interview.

The e-commerce player with the most improvement in ranking for Map of E-commerce Q2, Shopee began charging transaction fees from August onwards. The 1% transaction fee is for processing and handling payments, and that Shopee remains a zero-commission platform, said Shopee when asked regarding the implementation. It will only be applicable to sellers based in Singapore.

On the other hand, Lazada has removed the commission charge for Singapore sellers. It was charging between 1% to 7% per sale based on the category previously. It will help lower the cost of doing business on the platform and create new opportunities for local merchants to venture into the e-commerce space, said Lazada in the press release. With additional US$2 billion investment and appointment of Lucy Peng as the new CEO, Lazada can be seen levelling up their game in the region. “We aren’t too concerned about what the competition is doing, because we are going to crush them,” said Mr Alexis Lanternier, CEO of Lazada Singapore.

To discover more insights and research methodology of Map of E-commerce, please visit https://iprice.sg/insights/mapofecommerce/ 

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About iPrice Group

iPrice Group is a meta-search website where Malaysian consumers can easily compare prices, specs and discover products with hundreds of local and regional merchants. iPrice’s meta-search platform is also available in six other countries across Southeast Asia namely in; Singapore, Indonesia, Thailand, The Philippines, Vietnam and Hong Kong. Currently, iPrice compares and catalogues more than 150 million products and receives more than 11 million monthly visits across the region.

iPrice currently operates three business lines: price comparison for electronics and health & beauty; product discovery for fashion and home & living; and coupons across all verticals. On a regular basis, iPrice Group releases key insights on topics pertaining eCommerce, startups and others. Stay tuned to iPrice’s insights here: https://iprice.sg/trends/insights/