Singaporeans are big online shoppers, will spend $4.4b by 2015: Paypal

Advertising executive Yeo Ai Ling wearing her online purchases - top by J. Crew from Net-a-porter, necklace and ring by Carrie K Artisan Jewellery from carriekrocks.com. Even with shipping costs, the prices are still lower, she said. -- PHOTO: COURTE
Advertising executive Yeo Ai Ling wearing her online purchases - top by J. Crew from Net-a-porter, necklace and ring by Carrie K Artisan Jewellery from carriekrocks.com. Even with shipping costs, the prices are still lower, she said. -- PHOTO: COURTESY OF YEO AI LING

Online shopping in Singapore is booming.

By 2015, e-shoppers will be snapping up clothes, shoes, books and gadgets to the tune of $4.4 billion, up from an estimated $1.9 billion last year.

A 2011 survey on online and mobile shopping by e-payment firm PayPal showed that Singapore's online commerce grew 30 per cent, from $1.1 billion in 2010 to $1.4 billion in 2011.

PayPal's general manager for South-east Asia and India Faraz Ahmed said consumers are shifting their spending from physical stores to online stores because of lower prices, greater convenience and a broader selection.

Internet analysis company ComScore said in June that about 66 per cent of Singapore's Web users surfed retail sites when they went online.

The most popular e-retailer, with about 23 per cent of these visitors, is United States e-commerce giant Amazon. It sells a wide range of products, from books and DVDs to watches and baby prams.

South Korean e-retailer Giosis Group, which operates Qoo10.sg, is the next most popular, with about 14.7 per cent of all Internet visitors from Singapore.

Over the last three to four years, local e-commerce sites, such as Singapore fashion start-ups Reebonz and Zalora and online grocer RedMart, have emerged.

Overseas e-retailers also market directly to Singapore consumers by offering free shipping. In June, Amazon started offering free shipping to Singapore for purchases above US$125 (S$158). American Apparel ships for free to Singapore for purchases above $100, and British fashion e-retailer Asos ships for free if shoppers select standard delivery, which takes 15 days for goods to arrive.

This explosion in online shopping is partly fuelled by the high penetration of Internet-enabled smartphones here. According to the Infocomm Development Authority of Singapore, in 2003, only 17 per cent of Internet users aged 15 years and older were online shoppers. By 2008, when smartphones had hit retail shelves, the number had more than doubled to 36 per cent. In 2011, online shopping had reached 50 per cent.

Mr Patrick Linden, co-founder of local group-buying site deal.com.sg, said: "Mobile is a paradigm shift for online retailers. Our transactions from mobile devices have tripled in the last year. Consumers are now buying stuff like movie tickets on the go."

Management consultancy Accenture describes this major consumer trend as the rise of the "non-stop customer". Its Asean managing director for products Lee Won Joon said retailers have to ensure that they have different sales channels for consumers, both online and offline.

"For example, out-of-stock items should still be made available to customers online," he said. "Exclusive online items can also drive traffic to either channel. Or if a customer buys an item online and wants to return it, he should be able to take it back to a store."

For shoppers, it is not just about the convenience. Ms Yeo Ai Ling, 40, relaxes after a hard day of work as an advertising executive not by heading to the spa or gym but to her computer. Over the last three years, she has been spending about US$500 a month online buying clothes, handbags, handicraft and even a 1.8m cat ladder.

"The outlets are always open and you can buy things that aren't sold here. And they are also cheaper by about 30 per cent to 40 per cent," said Ms Yeo, executive director of Wild Advertising and Marketing.

Even with the shipping costs included, the prices are still lower, she added.