Singapore firms in India turn to e-commerce

They step up presence on Internet platforms as more shoppers go online amid pandemic

Singapore food manufacturer Tong Garden saw its business in India grow over the last decade - mainly through supermarkets and grocery stores, where people pick up snacks like wasabi-flavoured peas, a surprise runaway hit among Indians.

During the pandemic, the snack and nuts company has increasingly looked to e-commerce.

Its spokesman Huiqi Ong said: "Early on, we were on Amazon and BigBasket... Through the pandemic, we saw sales on all our platforms surging. That is something we are thankful for.

"We realised we need to put in even more to grow our presence."

She noted, however, that overall sales in India had fallen by 20 per cent to 30 per cent during the pandemic.

She added: "We are really focused on increasing our reach and being on as many platforms as possible... There is a lot of potential (in India). It's a big market for us."

Plans to set up a manufacturing plant - announced over two years ago - in the city of Ahmedabad have been delayed by the pandemic. The plant would allow the firm to manufacture its products in India and make it more competitive in an extremely price-conscious market.

While building in the midst of Covid-19 is "very challenging", Ms Ong said they are going ahead with building the factory.

India is the second-most affected country in the coronavirus pandemic, with 9.31 million cases.

In March, a stringent lockdown shut down all economic activity in the country, though restrictions have since been eased.

Still, the pandemic has seen the middle and upper classes increasingly shift online to buy everything from vegetables to daily essentials.

According to GlobalData, the pandemic is expected to accelerate India's e-commerce market and push its growth to hit 7 trillion rupees (S$126.5 billion) by 2023.

For Singapore firms selling lifestyle and food products, e-commerce has acquired additional importance in business expansion.

  • $126.5b

    Value of India's e-commerce market by 2023, according to GlobalData, as the pandemic is expected to accelerate the market and push its growth.

Singapore firm igloohome, which makes smart locks and lock boxes, stepped up its plans to go online.

Its director of business development Shalin Gaikwad said: "We assisted distributors to get on board marketplaces like Amazon and Tata Cliq by partnering with e-commerce-focused resellers.

"This helped us tap the festive promotions during Diwali, and we were able to list a lightning deal on Amazon, which led to some unprecedented volumes during the festival season."

The firm found that while deals in the real estate space were put on hold, other industries opened up, like the logistics industry.

"We decided to conduct training sessions with our distributors and gave them case studies on how to cater and pitch to this newly created stream of demand," said Mr Gaikwad.

Despite seeing a dip in sales during the pandemic, igloohome said it plans to increase its retail presence in the five major metropolitan cities by March next year.

Enterprise Singapore (ESG), the government agency championing enterprise development, has spotted the benefit of e-commerce for firms seeking to expand.

It recently conducted a webinar on the e-commerce journey for Singapore companies keen to venture into India.

"Despite the challenges posed by Covid-19, ESG has engaged with more than 40 companies on e-commerce opportunities in India to understand more about the opportunities and landscape over the past few months," said Mr Tay Lian Chew, ESG's global markets director for South Asia.

"More than 47 per cent of these companies have progressed on to active discussions with in-market distributors and sellers.

"The ongoing pandemic, as well as trade tensions, has also highlighted the importance of diversifying supply chains as companies around the world faced disruptions to the flow of materials and goods."

India has a tough business environment due to red tape and regulatory hurdles, among other issues.

Still, it jumped from the 130th position in 2017 to 63rd this year in the World Bank's Ease of Doing Business index.

For beverage firm Asia Farm, e-commerce is its new strategy for India, after eight years of trying to crack the highly competitive beverage sector.

It has sold 12,000 bottles of purple tea online during the pandemic.

"We understand the India market is not really easy because it's price-sensitive, said Mr Wong Loke Hsien, its business manager.

"But once you get in and the product is well accepted, sales can be big because of the massive population."

A version of this article appeared in the print edition of The Straits Times on November 28, 2020, with the headline 'Singapore firms in India turn to e-commerce'. Subscribe