Singapore: The e-commerce hub
When you think about expanding your business to the Asia Pacific or the South East Asia region, what comes to your mind? Singapore, that’s right. Singapore has since long served as the hub for various established firms and startups to grow their business in the region. The same seems to be true for e-commerce businesses.
The world is going digital and Southeast Asia is not far behind. In fact, the region is booming with an expanding middle class and increasing internet penetration. Approximately 70% of the population in the region is under the age of 40 and around 190 million are categorised as middle class with a good amount of disposable income. Southeast Asia also sees 3.8 million people gaining internet access each month, making it the fastest growing internet market in the world. A rising internet economy clearly indicates opportunities for e-commerce businesses.
While this is true, with opportunities comes challenges and where better than Singapore to overcome these obstacles and drive toward success. A study conducted by Google and Temasek stated that the e-commerce market in the region is projected to reach USD 88 billion by 2025 and Singapore will be at the center of it all. Why is Singapore e-commerce market a perfect hub for this business? Let’s see.
An Already Well-Positioned Hub for E-Commerce Businesses
For any successful business, you need a good amount of capital or investment. Singapore has already established itself as a hub for startups and businesses, including e-commerce platforms. In 2015, Southeast Asia received USD 1.1. billion in venture capital funding and Singapore led the numbers with a total of USD 820 million. Plus, investments in the e-commerce startups have flourished in the country. Early this year, SEA Ltd. received USD 757 million to expand its Indonesian based e-commerce platform store Shoppe. While this was about an online platform, logistics companies have also gained substantial investment. This year, Alibaba, a Chinese e-commerce firm, invested USD 250 million in the parcel courier Singpost. With potential investors being attracting to put their money in e-commerce businesses erupting or expanding in Singapore, the nation can call itself a hub for online businesses.
Extended Government Support
Singapore lends its complete support to aspiring entrepreneurs from any business sector. Running an e-commerce business requires a good amount of funding to fuel various business operations. Singapore has been known to fund startups as well as businesses willing to expand within the region. Thanks to the availability of government funding options, Singapore is one of the best placed to establish your venture. Several government schemes like ACE Startup Grant, Spring SEEDS, Early Stage Venture Fund, Technology Incubation Scheme, Technology Enterprise Commercialisation Scheme, etc. are available to businesses, including e-commerce.
Singapore Has an Ideal Business Atmosphere
There is no doubt that Singapore has a reputation for ease of doing business. For a new company to be incorporated in Singapore takes only 15 minutes. This is great as compared to World Bank statistics of 24.5 days (median number for business incorporation). One can credit the ideal business incorporation atmosphere for attracting around 27% of all e-commerce startups in the region. What’s more, it’s efficient and corruption-free government has been attracting investment as well as businesses to Singapore. Furthermore, Singapore has a low corporate tax, fastest resolution times for contract disputes in Asia, and has been promoting free trade for decades. Which business wouldn’t want such an atmosphere?
Advantage of a Strong Cross-Border Trade
For the success of any e-commerce platforms, ease of trade with other nations is vital. And, Southeast Asia, including Singapore, has that. To facilitate trade, the 10 nations in Southeast Asia have come together to form the Association of Southeast Asian Nations Economic Community (AEC) with a goal of making the region a globally competitive single market. In fact, this community offers e-commerce firms easier access to the Southeast Asian market. This again is led by Singapore. Approximately 99% of Singapore’s import and exports are tariff exempt. Additionally, the nation has futuristic policies revolving around e-commerce to protect its consumers. In fact, this gains them the trust of customers across the region. Furthermore, the country has bilateral and multilateral free trade agreements with various countries like USA, India, Japan, and more.
It’s a Logistics Hub
Singapore’s key geographic location has benefited it with maritime trade and made it a hub for logistics for various businesses. While websites and mobile apps are a part of e-commerce business, supply and logistics form a crucial part of the business. Without smooth flowing logistics, an e-commerce business can fail. Singapore’s location has made it a logistics hub for goods moving through the Southeast Asian region. The port of Singapore sees millions of containers and Changi Airport sees a great amount of air cargo, more than any other airport in the region. Singapore’s Civil Aviation Authority also opened an e-commerce AirHub at the airport to serve rising air freight demands. Singapore’s Ninja Van, an express delivery service, also solves the regions insufficient last mile delivery services.
There’s no doubt that the rising digitisation trend in the region and across the globe offers a plethora of opportunities to e-commerce businesses. Besides that, there is no doubt that Singapore serves as a strategic location and provides the atmosphere that will take these businesses to successful heights.
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