According to a report from Google, Temasek, and Bain, it is expected that the digital market in Southeast Asia will exceed US$200 billion by the year 2025. Singapore generates at least one-third of the total online retail sales in the region. With this in mind, if you are planning on setting up your own e-commerce company in Singapore, now is the perfect time for you to do just so!
What is E-Commerce?
The phrase e-commerce stands for Electronic Commerce. E-commerce is a business model that allows both companies and individuals to sell their goods and services on the Internet.
Since 2020, the e-commerce revenue for the B2C (business to consumer) market in Singapore is at an astonishing value of $4.9 billion. This amount is made possible due to the middle class, the high-speed Internet technology, and the young tech-savvy population.
What Types of E-Commerce Products can You Sell in Singapore?
When it comes to products that you can sell on the internet, the possibilities are endless. However, it is important to note that not all products sell well in every country. Ultimately, it all comes down to the demands of the people living in that particular country.
So, what types of e-commerce products can you sell in Singapore? Here is a list of some of the products that have achieved high sale numbers in Singapore over the last 5 years:
- Fashion accessories and clothing
- Computer devices and gadgets (cameras, cables, headphones, wireless devices, etc.)
- Music
- Books
- Toys and games
- Health and beauty products
- Office supplies
Clothing items and fashion accessories are 2 of the most selling product categories on the e-commerce market in Singapore. Many people find it more convenient to go online and shop for these products than to step into a retail store and see what is available. Some consumers also find it more convenient to buy beauty and health products on the Internet due to the wide variety of options available to them.
How to Make Your E-Commerce Business Successful in Singapore?
For an e-commerce business to be successful, you must take note of these important factors:
- Knowing what you want to sell
- Having a flexible payment method in place
- Securing electronic transactions
- Controlling your inventory
- Quick and reliable logistic services
Knowing exactly what products or services you want to sell to your target customers is very important. As a business owner, you must consider how to make your e-commerce site stands out from your competitors.
When it comes to having a flexible payment method in place, PayNow is one of the popular options. Also, one way of securing electronic transactions for your e-commerce business is to get a TrustSg mark on your e-commerce site.
In regards to inventory management, note that having too many stocks in your inventory can affect your capital, and having few stocks can result in your target customers’ disappointment. It is also important to note that having a quick and reliable logistic service in place is a must for any e-commerce business in Singapore.
E-Commerce Vs. Physical Retail Stores
Since many companies have begun to adapt their business strategies to the e-commerce market, it is no wonder why physical retail stores are feeling the threat.
Here are some of the differences between e-commerce businesses and physical retail stores that you should know!
| E-Commerce Businesses | Physical Retail Stores |
|---|---|
|
|
Some companies combine their physical retail stores with the e-commerce business model because it provides their potential customers an option to shop online or at a physical retail store. Supermarkets and shoe stores are two of the best examples of this.
How can the E-Commerce Business Model Reduce the Costs of Running a Business?
When compared to physical retail stores, setting up an e-commerce company can be a much more cost-effective solution. One of the best benefits of running an e-commerce business in Singapore is that it reduces some of the costs of running a business. For example, you don’t have to worry about any rental costs when running an e-commerce business in Singapore.
You also don’t have to worry about increasing much of the manpower cost. The only things that you need to take care of include marketing, the process of maintaining your business, and advertising.
Here are some of the most important steps that you need to take to set up a new e-commerce business in Singapore!
Step 1: Incorporating your E-Commerce Company – Choosing a Company Structure
You need to choose a business structure that can meet your business needs. To incorporate your e-commerce business, you will need to do the following 2 things:
- Decide on your company name
- Decide on the company structure (private/public limited liability company, subsidiary/branch/representative office, or sole proprietorship)
A private limited company is the most common choice due to its limited liability and tax benefits. The requirements to set up a private limited company in Singapore includes:
- One or more shareholders
- One or more resident directors
- One or more company secretaries
- At least $1 as initial paid-up share capital
- A registered office address (not a P.O. Box address)
- A constitution
Incorporate a company in 10 minutes.
Incorporating a private limited company is easy. You can do so online. Simply create an account and start incorporating! learn more about the HeySara incorporation package.
Step 2: Establishing your E-Commerce Structure
Having a good infrastructure in place is important because it can help your e-commerce business operate effectively. A good business infrastructure can generate both sales and delivery of your goods and services to your online customers. Aspects to concern include your business process, staff members, facilities, and IT system.
When designing your e-commerce structure, you must consider:
- How are you going to design and host your e-commerce business
- What will you use to market and advertise your e-commerce site
- What is the infrastructure of your e-commerce site going to be like
- What means will you use to take care of the delivery process of your goods and services
Step 3: Managing Your Accounting Right from the Start
Planning and managing the financial aspect of your business is crucial for the success of your e-commerce business. Keep in mind that several thousand dollars are required to launch a new e-commerce business in Singapore. Be sure to keep your accounting as accurate as possible at all times by keeping track of your revenue streams, preparing financial statements, keeping track of invoices and receipts, preparing tax returns, and tracking deductible expenses.
Our professional accountants here at HeySara can take care of your business accounting while you focus on growing your e-commerce business. Learn more about HeySara accounting services.
If your business is registered as a private limited company, you are also required to appoint a company secretary to take care of your company compliance. You must appoint one within 6 months upon your company incorporation.
HeySara is a 100% digital platform for company incorporation and secretary. With our HeySara app, you can handle all your secretarial requests and matters in just a few clicks.
Learn more about HeySara Corporate Secretarial Plan now.
Step 4: Understanding the Regulations under which your E-Commerce Business will Operate
The Singapore government has implemented specific regulations to protect both the businesses and their customers. As a business owner, you must familiarize yourself with the various rules and regulations under which your e-commerce business will operate.
For example, when it comes to web advertising, all online advertisements must comply with the Singapore Code of Advertising Practice. Online advertisements must be legal, decent, honest, and truthful. When it comes to data security and protection, it is an e-commerce business owners’ duty to protect their customers’ databases from being either stolen or misused.
Are E-Commerce Businesses Slowly Overtaking Physical Retail Stores?
The next trend of e-commerce is expected to be mobile, augmented reality, and social e-commerce. However, it is also important to note that, unlike e-commerce businesses, physical retail stores can form a human connection with their customers.
That being said, despite the growth of the e-commerce market in Singapore, there is still enough room for physical retail stores. The best way to look at this situation is to accept the fact that the e-commerce business model can complement physical retail stores by driving more sales to the businesses themselves.
