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In the last few years, online shopping has been more approachable and widely accepted because of new technologies and advanced online banking, and more companies are adopting an e-commerce business model. Singapore has attracted many foreign investors to set up a company in the country and e-commerce in Singapore gradually growing. This guide will elaborate why you should consider choosing Singapore as a base for regional e-commerce businesses.
Reasons to do e-commerce in Singapore
In January 2021, Singapore had a population of 5.87 million people and a total of 5.29 million internet users. Out of the total number of internet users, approximately 3.3 million people buy and sell goods and services over the internet through e-commerce businesses.
To run an e-commerce business in Singapore, a private limited company is the most common type of entity investors choose to incorporate as it provides numerous benefits including a legal entity status, limited liability, fast registration and tax incentives.
Another benefit of starting an e-commerce business in Singapore is reaching a global market.
According to Ben King, the Country Director of Google Singapore, “E-commerce is Southeast Asia is on the rise. But what sets Singapore apart is its policies and initiatives that help cultivate an environment for the digital industry and digital economy to thrive”.
Singapore’s e-commerce industry is currently valued at USD 9 million and is estimated to value USD 22 billion by 2025, according to an e-commerce report on Southeast Asia by Google, Temasek and Bain & Company.
How does Singapore aim to be Asia’s e-commerce hub?
Chan Chun Sing, the Minister of Trade and Industry introduced strategies to promote Singapore as Asia’s e-commerce hub at the 2021 Amazon Southeast Asia Online Seller Summit.
The strategies include strengthening Singapore’s digital infrastructure, creating robust supply chain capabilities, securing the digital landscape and supporting the digitalisation of local businesses.
1. Strengthening the digital infrastructure
The first strategy is strengthening Singapore’s digital infrastructure including data analytics, digital connectivity and payment methods.
To strengthen the digital infrastructure, approximately half of Singapore will have 5G coverage within two years and two nationwide 5G networks by 2025. The 5G bandwidth will increase the capacity in dealing with large online orders.
Local businesses in Singapore are also encouraged to adopt digital solutions including e-invoicing and e-payments.
2. Robust supply chain capabilities
The development in Singapore’s e-commerce industry allows the logistics sector to build stronger supply chains, including develop specialised and value-added capabilities such as cold-chain management, retail and pharmaceutical logistics.
3. Secure digital landscape
Singapore is improving its cybersecurity to protect businesses from any cyber threats. Singapore also signed the Digital Economy Partnership Agreement (DEPA) a digital-only trade agreement with New Zealand and Chile.
The DEPA establishes new approaches and collaborations in digital trade issues and address issues concerning digitalisation.
Singapore has also signed the Singapore-Australia Digital Economy Agreement (SADEA) which enhances existing digital trade agreements with Australia. The SADEA includes seven Memoranda of Understandings (MOUs) which consists of areas concerning artificial intelligence, data innovation, trade facilitation, digital identities, e-certification of agricultural commodities, e-invoicing and personal information protection.
4. Support digitalisation of businesses
The Singapore government will encourage local businesses in increasing growth opportunities from the digital economy and gaining e-commerce capabilities.
The Singaporean government supports making Singapore an e-commerce hub by introducing strategies that promote the digital infrastructure and landscape. E-commerce is now a booming business because of the high number of smartphone users, easy access to internet, ability to shop anywhere and recent covid-19 restrictions. Feel free to contact us if you have any questions or need assistance regarding an e-commerce business.
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