In Singapore, Amazon is up against a national sport and Alibaba
The Southeast Asian e-commerce market is projected to reach US$88b by 2025, according to a report by Google and Temasek
As Amazon.com Inc. pushes into Southeast Asia with a new venture into Singapore, the online retailer is facing some tough hurdles. Shopping in air-conditioned malls is practically a national sport, and e-commerce rivals moved in long ago.
Delivery delays also marred Amazon’s debut in July, when on-the-ground operations began with Prime Now two-hour deliveries. Even when including orders placed on its main US website, Amazon lags behind local web store Lazada and its parent, Alibaba Group Holding Ltd.
For the island country’s consumers, a store or a shopping centre is usually just minutes away. In fact there are too many stores, with mall operators scaling back operations after years of over-expansion. While retailers blame a weaker economy and increased web shopping, the country of 5.6 million trails most of the developed world when it comes to e-commerce. Just 4.6 per cent of Singapore’s retail sales took place online last year, compared with 15 per cent in the UK and 10 per cent in the US, according to Euromonitor International.
“Singapore is a very small city state, so shopping is one of the favourite pastimes for all Singaporeans,” said Chan Hock Fai, a fund manager at Amundi Asset Management. Because retailing is a more mature market in the country, compared with emerging retail and e-commerce markets, “growth rates are harder to come by”, he said.
At stake is a Southeast Asian e-commerce market that is projected to reach US$88 billion by 2025, according to a report by Google and Temasek Holdings.
