AS much as Singaporeans pride themselves on their shopaholic habits, it's no secret that fashion retail takes place in an incredibly crowded space. And the online shopping realm offers even less wiggle room than the back stage of a Chanel show, what with the presence of heavyweights like Zalora, a plethora of blogshops and bargain marketplaces such as Qoo10.
But that has not stopped new players from trying to satiate the appetites of online shoppers here, especially since a recent Mastercard Online Shopping Survey revealed that 65 per cent of respondents use the Internet for shopping, up 8 points from 2011. Although online commerce in Asia has also grown by almost 140 per cent annually in the last three years, according to a research report by private bank J Safra Sarasin, the entire region is set to account for just 23 per cent of online sales this year.
Which is perhaps why the latest online upstarts in the highly competitive industry here are casting their nets wide, focusing as much on the shopper in Moulmein as the fashionista in Moscow.
So intent on luring international shoppers is five-month-old fashion platform Inverted Edge (invertededge.com) that it has gathered a team of founders from diverse backgrounds at its Lavender Road base: Its CEO was born and raised in New Zealand, the COO lived most recently in the Caribbean and South America, and the French chief buyer was last based in Dubai before relocating here. "The Inverted Edge team is very international, which is one of our differentiators, and we set up here for multiple reasons," says CEO Debra Langley.
"First, Singapore has a strong infrastructure for, and the government is very supportive of, start-up tech ventures like ours. Second, since we're working with designers who are based primarily in Asia and Australia/New Zealand, geographically, this is a great base for us. And third, because Singapore is really in the heart of the incredible middle-class growth that characterises the Asia-Pacific region right now." Although paltry as compared to the online shopping markets of the US and China, e-retail here is forecast to hit $4.4 billion in 2015, according to a 2011 study by online payment service PayPal. Last year, card processing giant Visa experienced a 23 per cent growth in ecommerce purchases made on Singapore Visa cards. But while the obvious reason for online stores setting up shop here might be the local pool of credit card-wielding, logo-chasing consumers, the real lure is pragmatic: Seed money from home-grown investors, the ease of starting up a business and great location.
Inverted Edge, for example, has raised $2 million in funding from a group of venture capitalists backed by the Singapore National Research Foundation (NRF), Incuvest, Accel-X and four other undisclosed private investors.
Incuvest is a government-appointed VC under its Technology Incubation Scheme (TIS), which offers 85 per cent of a decided sum from the NRF if Incuvest comes up with the remaining 15 per cent.
It's almost chump change compared to the US$100 million raised by Asian online giant Zalora last year. Even then, the Singapore-based operation, with a presence in Hong Kong, Indonesia, Malaysia and Taiwan, booked a net loss of US$91 million in 2012.
Not all is bleak in this rapidly growing industry, however. Qoo10 has transacted $90 million in sales here, and its Korean founder Ku Young Bae is gunning for an initial public offering in three to five years' time - in other words, heartening news for e-retail entrepreneurs like Lisa Crosswhite. A former brand strategist from Canada, Ms Crosswhite founded a very different online fashion site Gnossem (www.gnossem.com) over a year ago, focusing on the much more luxurious wares of independent designers, rather than the varied mix of bargain buys on Qoo10.
She also cites the presence of "mature investors" here as an advantage. At the moment, 70 per cent of sales are from Singapore, but the one-time model has recently launched a UK version of the site. A global platform is all the more essential for new B2B fashion e-commerce site Tivanity (www.tivanity.com).
Public relations veteran Vanessa Seow came up with the idea for the company when she noticed retail space being dominated by cookie-cutter styles, and retailers' need for fresh designs to captivate their customers.
Despite being based in Singapore, she hopes that her current batch of designers from Singapore, China, Hong Kong, India, Malaysia, Ukraine and Lebanon would attract buyers from markets as far-flung as Europe and the US.
"E-commerce sites are global in nature, but most e-commerce sites are unidirectional," says Ms Seow, whose site is named after herself, co-founder Timothy Choon, plus a dose of insanity. "For example, companies would typically gather their goods in a warehouse, and then fulfil orders by sending goods out to anywhere from their warehouse."
To allow buyers and designers to transact efficiently across the globe, Tivanity has set up a "market exchange" platform and is in the midst of enlarging the system to include users upstream and downstream of the apparel industry. In the near future, it also aims to be a platform for collaborations among manufacturers, designers, retailers and shoppers.
For recently unveiled site Modajar (www.modajar.com), an eclectic mix of international designers helps establish its status as a global fashion destination. It currently has close to 30 labels such as House of Holland, a UK brand known for its kitschy designs; and Korean fashion marque LIE by Lie Sang Bong, favoured by stars like Beyonce, Lady Gaga and Rihanna - all directly sourced from designers.
"Modajar was conceived with the idea of catering to fashion-forward women and men who are creative, bold and in search of distinctive fashion and lifestyle products to express themselves and their individuality," says founder and CEO Bryan Tan, who founded the company with partner, fellow Singaporean Esther Wee. "These consumers are not limited to Singapore. Having said this, we concentrate on bringing in upcoming and established designers but will mix this with brands that have broad appeal too, for example, Patrizia Pepe."
Beyond the domestic market
Similarly, Inverted Edge's buyers and editorial team cement their global status through their product mix and content. "By definition, e-commerce sites are global because they can, or should be able to be, accessed from anywhere in the world," notes Ms Langley.
"But actually, many sites are not global as their content is focused more on meeting the needs of a domestic demographic, and that is absolutely fine. Our content is focused on a global readership, and that content is not just the products we select, but also the editorial, our 'blogitorial' magazine section called 'The Thread'."
While the Modajar duo admitted that they founded their company here simply because, "We are Singaporeans and Singapore is our home," they also list geographical location and logistics as reasons why this makes a good base.
"Setting up in Singapore just felt like the natural thing for us to do as Singaporeans," adds Ms Seow, who was based in China for over a decade before quitting her job to start Tivanity. "Singapore may not be the most ideal when it comes to the fashion industry since there really isn't a strong network of manufacturers, retailers and designers, but it certainly is very attractive for any e-commerce start-up in any other industry."
She reiterates the convenience of business-friendly infrastructure in place to support new companies, such as a ready pool of technical experts and programmers, free flow of information and ease of banking and logistics as some of the advantages of setting up an online business here.
In short, for Ms Crosswhite, Singapore is an epicentre for well-travelled style sophisticates, and a great market from which to build an international network.
As she quips, "It's one of those special places in the world that is developing so fast, in such an impressive world-class way, that you can't help but catch the bug and be enthusiastic for the future as well."