SMEs in Singapore with lofty dreams of going global will soon find one less barrier to entry with International Enterprise Singapore's recent partnerships with key global e-marketplaces such as US-based Amazon, China's T-Mall and Lelong from Malaysia.
Announced at IE Singapore's E-commerce conference on Thursday, the partnerships with the e-marketplaces will help SMEs in the process of listing their products for sale on such platforms. This initiative is to enable more companies to capture growth from the entire e-commerce ecosystem, IE said.
Akin to a virtual shopping mall, e-marketplaces are online platforms that aggregate a variety of products from numerous retailers, who each maintain an individualised storefront and do their own order fulfilment and delivery.
Local companies can also tap existing schemes such as the Market Readiness Assistance Grant (MRA) and the Global Company Partnership (GCP) grant to defray related expenses. Under the MRA, companies can get up to S$20,000 worth of subsidies to defray expenses such as listing fees on global e-marketplaces and online marketing and advertising activities when entering new markets.
Under the GCP, meanwhile, companies developing an e-commerce strategy and building an e-commerce infrastructure can get 50 to 70 per cent of their expenses defrayed.
"For most companies that don't have that much experience with going online, joining an e-marketplace gives them an easier start as e-marketplaces typically have existing customer bases of 200 to 300 million that SMEs can immediately leverage on," said IE Singapore CEO Teo Eng Cheong. By banding many local SMEs together as a united front, e-marketplaces may also waive or lower set-up charges and listing fees so Singapore SMEs can have lower cost of entrance, Mr Teo added.
Some e-marketplaces may also design a dedicated storefront for Singapore products "that will create a new segment in the marketplace, and hopefully with the Singapore branding we have, we can generate more interest and traffic to the stores", Mr Teo said.
IE Singapore also hopes to encourage more local companies to go into the business of e-fulfilment, such as developing payment mechanisms or delivery and logistics channels, as well as e-services such as big data analytics and search engine optimisation. The agency is also helping some Singapore companies to build their own e-marketplaces. "This will complement the whole e-commerce ecosystem," Mr Teo explained.
Over 30 Singapore companies from the F&B, retail and consumer electronics industries are already in talks with Amazon for product listing, in hopes of reaching out to their over 278 million active global customer accounts. Puneesh Kumar, the general manager of Asean and ANZ for Amazon Global Sales, added: "Many Singapore companies have won awards for their innovative products that can appeal to customers outside of the country."
One local firm, fresh fruits retailer Sun Moon, sought a listing on Amazon as a means to complement their existing physical distribution channel in the US, on top of both offline and online sales channels in Singapore and China.
The "five-figure sum" they received from the GCP grant "was a ticket to new opportunities", said its marketing manager Bernice Yap. The company used the funding to undertake a revamp in its brand communications, new product packaging and marketing collaterals, which led a hike in interest from US retailers and Amazon users.
The size of the Singapore online shopping market is expected to grow from S$1.1 billion in 2010 to S$4.4 billion this year. This figure is forecast to grow, as online retail as a percentage of total retail market size is estimated currently at only 3 to 6 per cent, far lower than the 10 to 15 per cent seen in developed markets such as the UK or the US.
While e-commerce in the US, Europe and China is expected to grow at over 10 per cent annually between 2013 and 2017, the Asia-Pacific region is set to become the world's largest e-commerce market with annual growth of 20 per cent between 2011 and 2016, with growth rates in Asean countries forecast at 25 per cent annually.
Additionally, e-payment services, the backbone of e-commerce, is set to almost double from US$1.5 trillion in 2012 to a projected US$2.3 trillion in 2017.