An article published by an executive of Frost & Sullivan said that the market for cross-border e-commerce in Southeast Asia may be small on a global scale but is already in a growing state. It is expected to account for 10% of global cross-border sales by 2025. The demand for cross-border ecommerce is growing and popular amongst people aged under 40 years. This is most true in Singapore and Malaysia.
In Southeast Asia, there are two contrasting growth market scenarios: key growth markets include Singapore, Malaysia, and Thailand. Meanwhile, the Philippines, Indonesia, and Vietnam represent challenging markets. But for now though, let’s focus on Singapore.
Singapore: growth spurt of e-commerce
Singapore is in the middle of a growth spurt as a regional e-commerce hub. Many industry experts already see it as the preferred choice in providing products and services for local and regional markets. One can say that this is because of its physical location as it’s nestled in the middle of several Southeast Asian countries, making it an enticing logistical hub in the region.
Its government institutions have also made it easier for various types of companies to be established. Supported by a thriving tech sector, these companies have been utilizing digital platforms to expand their business beyond their areas.
In a report by international research firm Deloitte, Singapore is fast becoming a key e-commerce platform destination, servicing not just its domestic market but also the Southeast Asian region. With the presence of platforms like Shopee, Lazada, Grab, Ninja Van, Grab, and others.
Singapore is the only Southeast Asian country that is among those ranked as “Mature Markets” in terms of digital trade. Included in the list are other Asian powers, such as China, South Korea, and Japan.
Proof of Singapore’s huge potential is its strong business-to-consumer (B2C) e-commerce market, which was estimated to be worth US$4.9 billion in 2019, and was expected grow to 8.35% in 2021.
Cross-border e-commerce market in Singapore was said to have reached US$2.15 billion in 2020. This accounted for 35% of the nation’s overall e-commerce market. Likewise, the e-commerce market for this country was expected to reach US$7 billion in 2022.
Talent shortage
One thing that may concern this thriving e-commerce hub is the lack of enough talent to fuel its e-commerce growth. Singapore may be facing a shortage of people who can fill up the needs of its digital industries.
In particular, there is growing demand for specialized workers, such as digital marketers, software developers, digital payment experts, logistics experts, etc.
A report by Amazon Web Services (AWS) showed that Singapore will need 1.2 million additional digital workers by 2025. The report also showed that Singapore’s workforce needs 23.8 million digital-skills training sessions until 2025.
Meanwhile, in the “Global Digital Skills Index” report by Salesforce, 64% of Singaporeans say they do not feel prepared to become part of a workplace where digital skills are required. In fact, only 29% percent are seeking to retool, relearn, and update their current skillsets to become viable for an e-commerce employment.
But the Singaporean government is implementing educational training plans to ensure that the country remains viable for e-commerce entrepreneurs in the long run. These include grants for upskilling and retraining.
Benefits of being an international seller (why should I sell?)
In the meantime, e-commerce companies can continue to enjoy selling
- Expand your business beyond traditional markets within your country
- Boost your cash flow from different market sources
- Diversify your product lines to accommodate your new markets
- Minimize business risks through market diversification
- Learn new skills in selling to a different market
- Add exposure and create new demand for your brand
Cross-border sellers have the distinct advantage of being present in the country platforms of their chosen e-commerce marketplace. For instance, some Singapore e-commerce stores can sell in Malaysia, Taiwan, and the Philippines. Consumers from these countries can just look up a particular item, and if a cross-border seller has the item, it will appear as part of the search outcome.
What products can I sell
If you’re already a seller in any of the major e-commerce platforms, you’ll already know that you can sell whatever it is that you currently have in your listing. Of course, you are also prohibited to sell the following:
- Weapons of any kind
- Chemicals or toxic materials
- Obscene or vulgar materials
- Types of religious or political items
- Software that’s pirated or harmful
- Industrial type telecommunications equipment
- Food items that aren’t compliant with local food regulations
What platforms can be used by international sellers
Lazada
Lazada is one of the biggest e-commerce platforms in Asia and its products are sourced out from different countries. Becoming a Lazada International Seller, or LazGlobal, is quite straightforward. You can operate your business throughout all the Lazada platforms. You’ll also get the “LazGlobal” identifier in your shop. If you’re in Singapore, as a Lazada International Seller, your products can be bought by consumers in other Lazada locations within Southeast Asia, including the Philippines, Vietnam, Thailand, Indonesia, and Malaysia.
LazGlobal sellers also have a distinct advantage of not having to open separate Lazada accounts in every country they are selling; all transactions will be done via one account.
The following are the requirements to becoming a Lazada International Seller:
- An email address and registered phone number in Lazada’s SEA markets
- A business license
- An Alipay account (for businesses coming from the mainland People’s Republic of China)
Here are the exact steps you need to take to become a LazGlobal seller:
- Go to the Singapore Lazada Seller Center at https://sellercenter.lazada.sg
- On the rightmost section of the page, look for and click on “Sign up as LazGlobal Seller.
- Choose the location where you will be selling from, put your mobile number, then click the “SIGN UP” button.
- After signing up, follow instructions to verify and validate your LazGlobal account.
- You’ll be required to add in details of your address book and to upload your business documents.
- Once complete, you can start creating listings of the products that you intend to sell.
Unlike being an in-country Lazada seller, you must improve your product listing as your competition will be much more diverse. You’ll have to take quality pictures or better written copies to capture the potential buyer’s attention. In addition, you’ll have to utilize Lazada’s sponsored ads and other marketing tools to help your products come up early when customers search for products.
Not only that, you’ll be exposed to the cultural challenges of the countries where you want to sell. Good thing though that English remains a universal language of choice for most of these countries.
To fulfill the orders of buyers across different countries, you can opt to use Fulfillment by Lazada (FBL). Their service includes handling, storing, picking, packing, and delivering of your items. Lazada’s network of fulfillment centers across the entirety of Southeast Asia allows them to be fast and efficient.
FBL does require additional fees for the service. Prices change according to the size of the item. You also need to attend Lazada’s onboarding session for FBL to help you understand the processes required for their service, plus some more to know about Lazada. After setting up your shop, you’ll be able to start selling products.
You can still opt to self-manage your product fulfillment but that means having to search for the delivery services in the other countries. This might take time considering you have to talk to these providers individually and agree on specific cost per delivery.
Shopee
Like Lazada, Shopee also allows its sellers to be available for cross-border selling. It has the Shopee International Platform (SIP), but this service is not available for every seller on Shopee. Even if you’re a seller, you have no choice in applying for this program. It is Shopee who pre-selects and invites the qualified Shopee sellers to join the SIP program. In fact, it is only available in Singapore, Taiwan, and the Philippines.
There are several criteria to join:
- Sellers have at least 1 completed order in a month with Shopee Singapore
- Sellers have a shop cancellation rate of below 10%
- Sellers have enabled at least one of Shopee Supported Logistics (Poslaju, JNT, DHL, NinjaVan, Shopee Xpress, Citylink)
If you’ve been accepted by Shopee to sell cross-border, congratulations! You’ll be receiving an email first and if you accept the invitation to be a member of SIP, you’ll be onboarded within 2-3 weeks. The SIP does not charge you at all to become a member.
Your SIP account will be placed under the “scommercetrading” Shopee account, which is the official overseas account where buyers can place orders for international sellers’ shops. Basically, all SIP orders will be made through this account.
Once you start selling on SIP, you’ll be given identifiers on your shop in the countries that you’ll be selling. For instance, if your shop’s main identifier is called “Shop_in_Singapore.”, it will be called “Shop_in_Singapore.tw” if you are selling in Taiwan, and “Shop_in_Singapore.ph”.
Same with LazGlobal, Shopee also requires its SIP sellers to have best practices. For instance, international sellers must put their product name and description in English, have accurate product weight, ensure pictures of products are not labelled with any products, and to secure day-to-shop (DTS) delivery of no more than 10 days.
You are also required to maintain a cancellation rate of less than 10%. Otherwise, your membership to SIP may be re-evaluated if you should remain a member.
Shopee lessens the burden for sellers to set prices. Prices of listings on overseas sellers’ shops are calculated using Shopee’s own internal system, which looks at the items’ weight, overseas shipping fees, and currency conversion rates.
Here is how the entire process of purchasing from a shop that is a SIP member:
- Once an overseas buyer places an order, the seller will be informed and will need to send the item to a Shopee warehouse.
- Sellers will need to treat such orders similar to other orders so they could be shipped in time to buyers. You do not need to change any addresses as this process will be done by Shopee.
- Once the parcel arrives at Shopee warehouse, the parcel will be processed by Shopee to be sent overseas to the buyer’s location.
- Should there be any return/refund cases, Shopee will liaise with buyers directly via the local Customer Service Support.
Buyers from overseas are expected to receive their orders within 5-10 business days.
If you have more questions about SIP, you may get in touch with the dedicated SIP customer service team via their seller inquiry form.
Conclusion
With high growth potential for e-commerce considering the changing market scenarios, as well as its inherent government, private sector, and manpower resources, there’s no doubt that Singapore can become a powerhouse in the e-commerce space, not just in the technical side, but in the retail side. Many Singapore businesses, especially the small to medium-scale ones, can push to expand their operations beyond their current marketplace and adapt to new markets where demand for specific products may be potentially big.
As a seller, you have the opportunity to develop good products that may be beneficial or even vital to a specific market outside of Singapore. The likes of Lazada and Shopee are enabling small companies to make it to a wider audience. Not only does this benefit you as a seller but also the whole Singapore economy as a whole. Such a growth cycle can only strengthen the countries economy by creating new jobs and allowing for innovation among local entrepreneurs whose market remain limited to the confines of Singapore.
What you do need is to ensure that your products remain unique and that you have not just the technical know-how but also the vision to pursue a large audience for your products.
