Local sellers, Global consumers: Capturing Singapore’s e-commerce export opportunity
In a not-too-distant past, it was commonly acknowledged that companies had to be big to export. With e-commerce, micro, small and medium-sized enterprises (MSMEs) can export at significantly lower costs than before. In Southeast Asia, where rapid growth in business e-commerce adoption has occurred over the past decade amidst rising Internet penetration rates, e-commerce provides a platform for local MSMEs to gain access to a growing pool of foreign customers.
Singapore is no exception, with e-commerce adoption rates rapidly growing and cross-border e-commerce becoming an increasingly important opportunity for sellers. Despite the strong domestic e-commerce growth, the biggest economic prize is likely to lie beyond national borders.
AlphaBeta has conducted a study (commissioned by Amazon) to examine the economic significance of the e-commerce export opportunity for MSMEs in Singapore, Thailand and Vietnam.
For Singapore, we estimate that e-commerce sellers in the country currently earn an estimated S$1.4 billion from e-commerce sales made to overseas consumers annually, with 45% of these earned by MSMEs. If MSMEs were to accelerate the pace at which they adopt e-commerce for exports, this value could grow even further to reach S$3.5 billion by 2026, with 73% of this earned by MSMEs. MSMEs are cognizant of this opportunity: through a survey of over 300 micro, small and medium-sized e-commerce sellers in the country, we also found that 87% of them find that e-commerce is critical for their ability to export. However, they face challenges in regard to high cross-border shipping costs, navigating a complex landscape of importing regulations in foreign markets and not having the knowhow to cater to overseas consumer preferences.
A regional report on this e-commerce export opportunity is forthcoming.
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