Vital role for Singapore in region, says report

A GrabFood delivery rider (at left) in Singapore. According to the report from Google and Temasek, Singapore has the second-largest market in the region for ride-hailing services by value. This is partly due to higher fares for online transport rides
A GrabFood delivery rider (at left) in Singapore. According to the report from Google and Temasek, Singapore has the second-largest market in the region for ride-hailing services by value. This is partly due to higher fares for online transport rides and food delivery orders here.PHOTO: AGENCE FRANCE-PRESSE

Singapore can play a significant role in the region's Internet economy despite its small size, according to a report out yesterday.

It noted that a number of the region's nine unicorns - start-ups valued at over US$1 billion (S$1.37 billion) - are based here, such as Lazada and Grab.

The report also pointed out that online companies headquartered in Singapore and Indonesia have continued to attract the vast majority of funding in South-east Asia.

The total amount raised in Singapore since 2015 is around US$16 billion, with US$6 billion in Indonesia. Companies in the rest of South-east Asia raised US$2 billion.

"There might be only five million connected users in Singapore versus 150 million in Indonesia, but Singapore's consumers do have significantly higher incomes and buy more products and services online than a user in Indonesia," said Mr Rajan Anandan, Google's vice-president for South-east Asia and India.

"There is the role for Singapore to be a catalyst for the region."

Google released the report with Temasek.

Since 2016, Singapore has also closed the most number of Internet economy deals, with around 1,000 completed.

Despite serving the smallest user base in the region, Singapore also has the second-largest market for ride-hailing services by value, with an estimated US$1.8 billion in gross merchandise value for this year.

The report added that this is partly due to higher fares for online transport rides and food delivery orders here compared with markets like Indonesia and Vietnam, where they can be as low as US$1 to US$2 each.

Singapore also punches above its weight in the online travel market, with an estimated US$5.5 billion in gross bookings value for this year, supported by the highest per capita spend in the region, the report said.

The Internet economy is set to create 1.7 million full-time posts by 2025 for skilled professionals as well as flexible jobs in sectors like ride hailing with Singapore taking a "disproportionate share", said Mr Rohit Sipahimalani, joint head of the Investment Group at Temasek.

"The headquarters for many companies are here in Singapore and this will help to generate high-quality jobs. There are also start-ups coming out of Singapore into the region and this creates new employment opportunities in the Internet economy," he added.

Sue-Ann Tan

A version of this article appeared in the print edition of The Straits Times on November 20, 2018, with the headline 'Vital role for Singapore in region, says report'. Print Edition | Subscribe