Singapore’s E-Commerce Market Projected to Balloon to S$14B by 2025, Study Says

Have you checked out something online recently? If yes, (and frankly, who hasn’t), then you’re part of Singapore’s ballooning market for e-commerce. And this market, as big as it already is, will likely get even bigger in the next three years, according to data and analytics firm GlobalData.

The Lion City’s e-commerce market is projected to expand at a compound annual growth rate of 16.2% from S$7.8 billion in 2021 to S$14.2 billion in 2025, GlobalData said in a report on Jan. 12. Consumer spending, government support, and shoppers’ preference for online shops are expected to contribute to this demand.

“E-commerce sales in Singapore were adversely affected by the COVID-19 pandemic with consumers becoming prudent during the crisis. The pandemic also affected high value purchases such as travel and accommodation further impacting e-commerce sales in 2020,” said Nikhil Reddy, payments senior analyst at GlobalData.

“However, with the easing of COVID-19 restrictions and revival of economy, the market rebounded in 2021. According to GlobalData’s E-Commerce Analytics, e-commerce sales are estimated to grow by 18.3% in 2022 to reach S$9.2 billion (US$7 billion).”

Reddy added that although the pandemic dented e-commerce’s growth, consumers opted to shop online even for their day-to-day needs due to the lockdowns and social distancing measures.

“The shift in consumer buying behavior now continues despite opening of physical stores.”

Government Support

Various government initiatives are helping drive Singapore’s e-commerce market, such as the “E-Commerce Booster Package,” which subsidized retailers for selling products online via participating platforms like Lazada and Shopee. Qualified retailers pocketed up to 80% in subsidies, amounting to S$8,000, thanks to this scheme.

E-Payment Platforms to Benefit

As a result of the expected stellar growth in e-commerce, online payment platforms are also likely to benefit. Based on GlobalData’s 2021 Financial Services Consumer Survey, payment cards made up 43% of all the e-commerce sales in the city-state.

Meanwhile, PayPal, Apple Pay, Grab Pay, Google Pay, and other alternative payment solutions have also risen in popularity, with their combined market share up to 30.6% in 2021 from 27.6% in the prior year.