SINGAPORE - Online shoppers in Singapore are increasingly being influenced by social media advertisements, with two in five who shop across borders saying they discovered new products after viewing advertisements on Facebook, Instagram or WhatsApp.
This is according to PayPal's 2022 Borderless Commerce Report on online shopping habits, released on Tuesday (Aug 16).
In the year-ago period, only one in five online shoppers in Singapore said they discovered online businesses after viewing social media advertisements.
The 2022 survey was conducted by global research agency Ipsos between December and January this year across 14 international markets, including Singapore, the United States, Britain, China and Japan.
It polled 1,000 consumers aged 18 and older in each market and also found that online shoppers in Singapore pulled ahead when it comes to shopping internationally, with close to four in five respondents having done so in the past three months when the study was conducted.
Comparatively, only about three in five on average across all markets had done so.
National University of Singapore (NUS) Business School's Professor Lawrence Loh said social media platforms are particularly successful due to targeted advertising.
These platforms have a treasure trove of user-generated content, allowing the platforms to target users who are more likely to make purchases.
Meta owns Facebook, Instagram and WhatsApp.
Instagram said on its website that it determines which advertisements to show users based on their account activities, as well as activities on Facebook and other third-party websites.
Prof Loh also said users show a higher degree of engagement on social media platforms compared with conventional websites.
He attributed this to the wealth of personal interactions and information available on such platforms, which meant users would keep coming back to stay updated.
As such, social media was more effective in reaching out directly to customers, said Prof Loh, who added that businesses need to keep up with the times.
"To make a foray or even to stay in the game for the online markets, businesses will have to substantially and innovatively tap social media," he added.
The Covid-19 pandemic had also accelerated digitalisation, compelling more businesses and consumers to go online amid lockdowns to minimise interaction to stem the spread of the virus.
This digitalisation effort is expected to have a long tail effect on consumption.
A report in January by data and analytics company GlobalData projected that e-commerce spending in Singapore will grow from $7.8 billion last year to $14.2 billion in 2025. This year, consumers in Singapore are projected to spend $9.2 billion online.
PayPal's latest report found that China sellers are the most popular with shoppers in Singapore, followed by sellers in the US and South Korea.
About two-fifths of the respondents said they shopped internationally because they could discover new products. Close to half of the respondents cited the greater access to products not available here. More than half of them said they did so because of the better prices offered by overseas sellers.