SINGAPORE - When it comes to making that online purchase, shoppers in Singapore are second to their counterparts in Hong Kong in the Asia Pacific region in terms of buying things from overseas.
An Ipsos study commissioned by PayPal found that around 73 per cent of online shoppers here bought items from overseas in the past year, with 14 per cent shopping on foreign websites exclusively. Ipsos is a market research and consulting firm based in France.
Released on Monday (Dec 10), the results showed that 75 per cent of shoppers in Hong Kong made cross-border online purchases.
Ipsos surveyed more than 34,000 respondents in 31 countries from March to May this year for the study, including 1,000 from Singapore.
Clothing, footwear and accessories topped the list of most popular categories of items bought online, with around 70 per cent of respondents in Asia buying at least one item in the past year.
Global shoppers mostly headed to online stores based in China, with respondents citing better prices as the primary reason.
The rise of international e-commerce in Singapore is a positive sign at a time when countries are putting up more barriers as trade protectionism sentiments grow around the world, a panel of industry insiders concluded while discussing the report at the PayPal Industry Roundtable at Republic Plaza on Monday.
The trend towards protectionism means businesses here must adjust with these changing headwinds, said Asian Trade Centre senior fellow Alex Capri.
"On the short-term, we are looking at localisation and fragmentation of the trade landscape, and we are stuck with that."
Referring to the ongoing United States-China trade conflict, PayPal senior vice president of international markets Rohan Mahadevan said the problem is knowing with certainty where these winds are blowing.
"With so much uncertainty, where is the end goal? If there is going to be a trade tariff, then let us know when and where, and (businesses) will figure out how to make this change work. The uncertainty and variability is the biggest challenge," said Dr Rohan.
The panel also discussed the imposition of a goods and services tax (GST) on low value imported goods in Australia this year, which has been criticised by some as a protectionist move.
From July this year, shoppers in Australia purchasing electronics, clothing and furniture from overseas sellers with a value of under AU$1,000 ($989) incurred a 10 per cent GST.
Such a tax is an additional barrier for smaller players and would also raise their regulatory costs, said Mr Capri.
Switzerland plans to follow suit from 2019, and European Union member countries from 2021.
Currently, Singapore does not tax low value goods under $400, and are reviewing international developments before deciding on a GST for such imports.
In the meantime, e-commerce merchants would do well to diversify their markets, thus avoiding putting all eggs in one basket, said Dr Rohan.
Singapore Management University's Professor Annie Koh, who chairs the finance and investment committee of GovTech Singapore's board, said companies can also identify "sweet spots" within global trade flows.
Setting up a presence in Vietnam, for example, can allow firms to potentially leap over trade barriers, said Prof Koh. This year, the country sought to set up three special economic zones that would grant concessions to foreign investors.
Because of such concessions, Prof Koh said businesses in Vietnam stand to benefit from having more access to markets which others have difficulty entering.
Free trade agreements, such as the China-Singapore deal that eliminates tariffs for 95 per cent of exports to China, are also opportunities for firms that face trade protectionism elsewhere, she said.