The future of Singapore retail is cross-border trade: Amazon
By 2026, e-commerce exports revenue is expected to skyrocket to $3.5b.
Cross-border shopping in Singapore is becoming mainstream in the e-commerce industry, Amazon claimed, as it found out in a study that exports revenue is expected to grow over 20% annually.
According to a report by Amazon in consultation with AlphaBeta, Singapore’s business-to-consumer (B2C) e-commerce exports revenue at S$1.4b this year is expected to grow 5% annually to reach S$1.7b in 2026; but should micro, small, and medium enterprises (MSMEs) accelerate the adoption of e-commerce for exports, the value is even expected to reach S$3.5b in 2026.
”There are a lot of huge opportunities for the sellers in ASEAN to ride on this wave, to start the local and global kind of concept,” Bernard Tay, head of Amazon Global Selling in Southeast Asia, said.
In Singapore, 87% of the micro, small, and medium enterprises (MSMEs) believe that e-commerce is critical for their ability to export, whilst 35% of exporting MSMEs that use e-commerce for exports earn half of their sales from abroad, the report further said.
With this, the small and medium enterprises (SMEs) are expected to receive more support from various industries ranging from service providers networks and government agencies.
Tay said that SMEs should realise that delving into e-commerce is a “long-term investment” as they have to develop new skills as it is different from traditional offline business.
“By going online, it's going to be different, because they can’t feel the product. So they have to take on new skills, seek help in creating pictures, nice, good quality product features, to surface it to the customer so that they can upgrade the experience for that and have confidence in the product,” he said.
Amazon has tools that allow SMEs to grow and reach customers globally through its 20 stores worldwide and provide them access to over 200 million Prime customers that businesses can tap on.
It also offers over 225 free tools and services, such as Amazon’s Seller University or Seller App, “to help them and most of the first time sellers that go onboard,” Tay said.
MSMEs in Singapore are still facing difficulties in selling overseas, particularly due to barriers in cost, regulation, and information and capabilities, based on the Amazon report which surveyed 300 MSMEs.
About four in five (81%) MSMEs cited high cross-border shipping costs as a major barrier in their exports, according to the study. It also said that three in ten (32%) admitted that they will find further support from the government “valuable,” despite Singapore offering a robust range of grants to support local businesses in their exportation.
Meanwhile, about four in five (78%) of MSMEs cited the lack of clarity in import regulations as a challenge in their selling abroad, whilst 19% said that the advisory support on importing regulations is “sufficient.”
About seven (72%) in 10 of MSMEs said they lack the ability to compete with other sellers globally and 71% were unsure of the demands and preferences of foreign consumers.
To help MSMEs overcome these barriers, Tay said that they are establishing a new service platform to help businesses navigate cross border processes and work with service providers to assist businesses in knowing the regulations they need to abide by with their sales.
He said Amazon has been working with government agencies and services providers in Southeast Asia to reduce the friction for sellers as they go overseas.
In Singapore, Amazon has worked with Enterprise Singapore for Market Readiness Assistance Package where eligible SMEs can be granted subsidies or rebate up to S$100,000 to support them to take their business overseas.
“That's where we can help the sellers to overcome the initial roadblock, where they may need resources to focus on the product itself and they can actually claim and get it sponsored from the government to embark on their cross border journey,” Tay said.