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Online shopping shift could hurt local brands more in Singapore amid Covid-19: STB and Visa study
[SINGAPORE] With more people shopping online owing to Covid-19, local retail brands could face a gloomier future, according to a recent study.
For every S$100 spent on local brands, only S$2 was transacted online, compared to the Singapore retail average of S$25 per S$100.
This is based on findings released on Thursday (Sept 17) by the Singapore Tourism Board (STB) and credit card company Visa.
A local brand is defined in the study as a brand started and owned by Singaporeans, and includes fashion apparel, shoes, department stores, food and confectionery.
The Singapore retail average takes into account local brands and foreign brands here.
The study looked at transactional data from Visa's VisaNet electronic payment network during January to March, the initial months of the Covid-19 outbreak break but before the two-month circuit breaker period that started in early April.
STB and Visa said that the "the lack of online presence has left local brands increasingly vulnerable to the adverse economic impact of the pandemic".
Consumer spending on local brands also fell 14 per cent in the first three months of the year compared with the same period a year ago.
A breakdown for the impact on foreign brands was not available from STB and Visa.
The fall for local brands was due to the pandemic, which resulted in a lack of foreign visitors and a change in shopping preferences among locals, STB and Visa said.
The local retail scene has seen a spurt in online shopping amid Covid-19 and its related restrictions.
Total visits to e-commerce platforms in Singapore during the first half of the year grew by 23 per cent, a study by iPrice Group and SimilarWeb found.
Retail observers said that the fall in consumption of local brands is not necessarily uniform across all products, and may not necessarily be linked to the online presence of a brand.
Said Mr R Dhinakaran, the president of the Singapore Retailers Association: "This fall in consumption does not apply across all brands and products. Some established brands are still able to do well." In an effort to revive the local tourism industry, STB has signed partnerships with both Visa and Mastercard to use analytics to boost sales.
Singapore closed its borders to tourists on March 23. Since then, agreements with several countries, such as China and Japan, have been made to gradually resume cross-border travel between countries but with restrictions in place.
THE STRAITS TIMES