2019 J.P. Morgan Global Payment Trends

2019 Global Payments Trends Report - Singapore Country Insights

SINGAPORE INSIGHTS REPORT


Singapore’s ultra-fast internet and young, tech-savvy population make this a market to watch. However, being a city-state, e-commerce has strong competition from the convenience of physical stores. To help our clients locate, attract and keep their customers, we have tracked and assessed e-commerce developments in 34 mature and emerging markets around the globe.

Introduction

 

 

The fortunes of Singapore’s e-commerce market in 2019 hinge in large part on external forces. The country’s wider economic growth trajectory could be threatened by global capital expenditure and supply-chain disruptions from U.S.-China trade tensions.1 Gross domestic product growth is expected to slow to 2.4 percent year-on-year in 2019, largely on the impact of a softer export outlook.2 While domestic demand so far has been resilient in the face of these global headwinds, higher domestic interest rates alongside a slowing property market could take the shine off household balance sheets, implying some deceleration in private consumption in 2020 and leading shoppers to temper their spending habits.3

 

This document is based on projected figures and is subject to change at any time.

Ultra-fast internet and a young population drive sales

 

Despite its small geographical footprint and a population of just 5.6 million,14 Singapore is a major e-commerce market in south east Asia.15 The Singaporean business to consumer e-commerce market is worth $4.9 billion,16 and is expected to grow at a compound annual growth rate of 8.35 percent to 2021.17 The average online spend per annum is $1,456,18 with shoppers willing to make big-ticket purchases online – consumer electronics (17.9 percent) and travel (31 percent) are the two most popular shopping categories.19

The growth of Singapore’s e-commerce market will be supported by the country’s excellent internet technology. Fixed internet connections are typically almost triple the speed of the global average, and the country enjoys highly reliable, secure information and communications technology infrastructure. These factors have promoted high internet (87 percent)20 and mobile penetration (75 percent) levels among citizens.21

The growth of the online shopping market in Singapore will also be fuelled by a young, tech-savvy population – 80 percent of Singaporeans are aged under 54 – and a growing middle class.22 The country is one of the wealthiest nations in the world with the seventh-highest gross domestic product per capita globally.23 Its consumers have high disposable income with which to apply to electronic retail.

 

Highlighting convenience key to boosting sales

 

Despite the country’s affluence, e-commerce in Singapore as a percentage of overall retail spend is low compared with European countries like the UK and Germany. It stands at just 4.2 percent,24 compared with the UK’s 19.1 percent25 and Germany’s 15.1 percent.26 This can be explained in part by the country’s high population density and excellent transport infrastructure, making it easy for shoppers to visit physical stores.27 Reminding shoppers of the convenience and choice of e-commerce should help drive sales, and the government is keen to encourage its tech-savvy population to embrace online shopping as part of a drive to become a technology-driven ‘Smart Nation’.28

The government’s efforts to ramp up e-commerce spend include plans to bring its e-commerce laws and regulations as up to date and globally competitive as possible. For example, the Singapore government has strengthened the statutes and regulations around intellectual property rights for e-commerce, in an attempt to increase consumer confidence in online shopping.29

 

Corporates and government alike are making the last mile as fast as possible

 

Marketplace and platform e-commerce sites dominate in Singapore. The top three sites – Qoo10, Lazada and Carousell – are all platforms, selling a broad range of products.30 Qoo10’s top ranking has been supported by the organization’s decision to make Singapore its headquarters for south east Asia.31

Cross-border shopping makes up a significant part of the overall e-commerce market, at 29 percent of total spend.32 Around 60 percent of Singaporeans have shopped cross-border,33 with China (first), the US (second) and Malaysia (third) the most popular markets.34

Whether domestic or international purchases, when it comes to delivery of e-commerce items, the country ranks in the global top 10 for logistics performance,35 being extremely well served by road, rail, shipping and air. The country has also become a logistics hub and testing ground for e-commerce giants: Amazon, for example, uses artificial intelligence in its Singapore logistics facility to offer one-hour and two-hour delivery, technology, which is not used in its U.S. sites.36

Increasing the speed and efficiency of the last mile of delivery is another way in which the city-state is taking the success of e-commerce into its own hands. In late 2018, Singapore’s government introduced a pilot scheme for parcel collection lockers in public spaces. The lockers offer 24/7 access and are intended to cut carbon emissions by aggregating deliveries and removing the risk of missed home deliveries.37

Mobile-first merchants are ahead of the curve

 

Mobile commerce is well-established in Singapore and is creeping towards accounting for half of all online sales: it already makes up 42.3 percent of all completed e-commerce transactions, or $2.1 billion in sales.38 Mobile commerce sales are expected to outpace overall e-commerce growth, expanding at a compound annual growth rate of 18.1 percent to 2021,39 to reach a value of $4 billion.40

This confident prediction is underpinned by Singapore’s firmly entrenched appetite for mobile technology. The country was one of the quickest to embrace tablets, for example, and Singaporean’s love of fast, on-the-go internet access meant there were 3.4 million 3G subscriptions and 4.8 million 4G subscriptions in 2017.41 In a population of just 5.6 million people, these figures suggest many citizens own multiple mobile devices, and are willing to pay for speed and ease of internet access. Mobile phone owners should be primary targets for merchants, as they spend an average of 45 hours a week online.42

Many local online merchants are already highly accustomed to, and primed for, growth via this channel. Several high-profile Singaporean e-commerce businesses have opted for a mobile-first strategy. The aforementioned e-commerce site in Singapore, Carousell, for example, began as a mobile-only site and has since expanded to include desktop online shoppers. It allows users to sell products quickly by taking photos of the item on their phones and chatting via instant messenger with interested buyers.

Social media is another medium for e-commerce merchants hoping to catch the eye of Singaporeans. The country has one of the highest rates of social media use in the world, with seven in 10 citizens accessing social media platforms.43 Facebook, YouTube, Google, LinkedIn, Instagram, Twitter, Tumblr, Pinterest and messaging apps such as WhatsApp and WeChat are all popular.44,45

 

Late-night, after-work shoppers favor cards

 

Cards are far and away the most-used method for e-commerce payments in this technologically advanced nation, accounting for 68 percent of all transactions and $3.3 billion of sales.46 With 1.95 debit cards and 1.62 credit cards per capita,47,48 citizens are well-versed in this payment method. When shopping online, credit cards trump debit cards in use, and Visa® is the most popular card brand.49 Card market share is expected to decline slightly to 2021, when cards are predicted to take a 60.8 percent share of the market.50

Digital wallets are expected to grow in use. They are already the second-most popular payment method in Singapore, accounting for 14 percent of all e-commerce transactions and representing $680m of sales.51 Digital wallets are predicted to increase rapidly in use over the next two years, to make up 22.5 percent of all sales by 2021.52 Major international brands like PayPal® and Apple Pay are well known and used by Singaporean online shoppers,53 alongside local provider eNETS, an internet-based online payment method that allows shoppers to make real-time payments via their bank account.54

Bank transfers are used for 10 percent of e-commerce transactions, a figure that is expected to rise slightly to 13.8 percent in 2021.55 Unlike other south east Asian countries, cash on delivery is not particularly popular, used in just five percent of transactions, a figure projected to decline to two percent by 2021.56

Payments peak in Singapore in the evening, at around 10pm, when citizens are largely home from work.57 The peak day for browsing converting to completed transactions is Wednesday – suggesting midweek evenings may be the best time for e-commerce merchants to target Singaporeans with marketing and deals.58

Smooth customs processes can help imports

 

When looking at international e-commerce trade to Singapore, the country offers good clarity and consistency around its customs and border processes. The watertight procedures have helped create a corruption rate that is at a record low.59 This is reflected in prompt border-clearing processes for imported purchases – international orders take an average of 30 hours to clear the border process, which is a third of the time it takes in Indonesia and outpaces processing speeds in Thailand, Malaysia and the Philippines.60

However, there has been a marked jump in reports of domestic e-commerce fraud, with the Singapore police reporting a 58 percent increase in cases between 2017 and 2018.61 The authority has attributed this to rising smartphone e-commerce, with app-based shopping platforms being the source of most crime: for example, app-based marketplace Carousell is responsible for eight out of 10 reported e-commerce fraud incidences in the country.62  Common fraud activities include scams surrounding fake event tickets and non-delivery of digital purchases.63

 

Key takeaways

 

Given the popularity of marketplace platforms, international merchants might not need to establish a base within Singapore – where credit cards are far and away the most widely-used e-commerce payment method. A healthy proportion of Singapore’s e-commerce sales come from cross-border purchases, helping the country earn a reputation as a test bed for merchants seeking to expand into Asia-Pacific markets. For e-commerce merchants new to Singapore, third-party processors may provide opportunities for quick and easy integration with related platforms.

 

Data may vary from historical figures, due to certain categories being re-stated as new information sources have become available.

J.P. Morgan 2019 Payments Trends – Global Insights Report series includes the following countries: Australia, Brazil, Canada, China, Hong Kong, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, Singapore, Thailand, Turkey, U.S., Vietnam.

 

Global Payments Trends Reports

International e-commerce success can hinge upon understanding the needs, nuances and growth patterns of individual nations. J.P. Morgan’s Global Payments Trends Reports aims to offer merchants the knowledge they need for global success through in-depth, country-by-country analysis.

For more information, please contact:

Your J.P. Morgan Relationship Manager or visit: https://www.jpmorgan.com/country/US/en/merchant-services/payment-insights

 

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© 2019 JPMorgan Chase & Co

1 Asian Economic Research, J.P. Morgan Chase Bank, September 2018.

2 Asian Economic Research, J.P. Morgan Chase Bank, September 2018.

3 Asian Economic Research, J.P. Morgan Chase Bank, September 2018.

4 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

5 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

6 Data.WorldBank.org, 2019. ‘Singapore GDP (current US$).’ Accessed January 2019.

7 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via E-commerce in Singapore Statistics and Trends, 2017.

8 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via E-commerce in Singapore Statistics and Trends, 2017.

9 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via E-commerce in Singapore Statistics and Trends, 2017.

10 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, Global Payments Report 2017.

11 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company Via Statista, 2017.

12 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

13 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017, National Association, 2017 and Monetary Authority of Singapore and World Bank, 2017.

14 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

15 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Economic Development Board of Singapore, 2018.

16 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via E-commerce in Singapore Statistics and Trends, 2017.

17 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Statista, 2017.

18 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

19 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via E-commerce in Singapore Statistics and Trends, 2017.

20 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, Global Payments Report 2017.

21 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Economic Development Board of Singapore, 2018.

22 J J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Economic Development Board of Singapore, 2018.

23 CIA.gov, 2019. ‘The World Factbook.’ Accessed January 2019.

24 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Singstat, 2017.

25 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Statista, 2017.

26 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Statista, 2017.

27 ThePaypers.com, January 2019. ‘Why are some markets more ecommerce friendly than others?’ Accessed January 2019.

28 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Euromonitor International (2018), Export Gov (2017), Statista (2017) & EDC Analysis, 2018.

29 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via eCommerce Association of Singapore, 2017.

30 Aseanup.com, June 2018. ‘Top 10 e-commerce sites in Singapore 2018.’ Accessed January 2019.

31 DemystifyAsia.com, April 2016. ‘Qoo10 – Ecommerce Platform in Singapore, Malaysia, Hong Kong, China, and Japan.’ Accessed January 2019.

32 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Singstat, 2017.

33 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Export Gov, 2017.

34 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via E-commerce in Singapore Statistics and Trends, 2017.

35 Worldbank.org, 2018. ‘LPI International: Global Rankings 2018.’ Accessed January 2019.

36 Export.gov, July 2018. ‘Singapore – eCommerce.’ Accessed January 2019.

37 RetailTechNews.com, December 2018. ‘Weekly Focus APAC: Singapore Pilots Locker Service to Support E-Commerce Growth.’ Accessed January 2019.

38 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via E-commerce in Singapore Statistics and Trends, 2017.

39 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

40 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

41 Export.gov, July 2018. ‘Singapore – eCommerce.’ Accessed January 2019.

42 Hashmeta.com, August 2018. ‘Social Media Landscape in Singapore (2019).’ Accessed January 2019.

43 Hashmeta.com, August 2018. ‘Social Media Landscape in Singapore (2019).’ Accessed January 2019.

44 Hashmeta.com, August 2018. ‘Social Media Landscape in Singapore (2019).’ Accessed January 2019.

45 Export.gov, July 2018. ‘Singapore – eCommerce.’ Accessed January 2019.

46 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

47 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017, National Association, 2017.

48 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Monetary Authority of Singapore, World Bank, 2017.

49 ThePaypers.com, 2019. ‘Cross-border Ecommerce – The Paypers: Singapore.’ Accessed January 2019.

50 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

51 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

52 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

53 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

54 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Urban Redevelopment Authority of Singapore, 2018.

55 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

56 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

57 iPrice.sg, 2017. ‘State of eCommerce in Southeast Asia 2017.’ Accessed January 2019.

58 iPrice.sg, 2017. ‘State of eCommerce in Southeast Asia 2017.’ Accessed January 2019.

59 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Economic Development Board of Singapore, 2017.

60 StraitsTimes.com, November 2018. ‘Singapore well-placed to be e-commerce hub, with its tech-readiness, infrastructure: Economist survey.’ Accessed February 2019.

61 ChannelNewsAsia.com, August 2018. ‘Carousell e-commerce scams jump 136% in first half of 2018: Police.’ Accessed February 2019.

62 ChannelNewsAsia.com, August 2018. ‘Carousell e-commerce scams jump 136% in first half of 2018: Police.’ Accessed February 2019.

63 ChannelNewsAsia.com, August 2018. ‘Carousell e-commerce scams jump 136% in first half of 2018: Police.’ Accessed February 2019.