The digital transformation of retail has accelerated quickly in recent years. E-commerce is emerging as a cornerstone of modern business which creates unprecedented opportunities for entrepreneurs and businesses.
As Southeast Asia’s e-commerce market races toward a projected value of US$ 256 billion by 2026, Singapore remains a frontrunner in this digital revolution and offers an ideal launching pad for ambitious e-commerce ventures.
For aspiring entrepreneurs, the timing couldn’t be better to enter the e-commerce space. The post-pandemic landscape has altered consumer behaviour. Now more shoppers prefer the convenience and safety of shopping online.
We will walk you through the steps of establishing and growing your e-commerce business in Singapore and equip you with the knowledge and insights you need to make your business aspirations a reality.
Understanding E-Commerce Business
E-commerce or “electronic commerce” is the buying and selling of goods and services over the Internet, whether through a website, mobile app, or social media platform.
But nowadays, it has evolved into much more—like digital product delivery and subscription-based services.
Types of E-Commerce Business Models
Your e-commerce will fall into at least one of the following categories. Each of which has its benefits and challenges.
B2C (Business-to-Consumer)
The most common form where businesses sell directly to individual consumers. Anything a person buys in an online store as a consumer is considered a B2C transaction.
Examples include online retail stores selling clothing, electronics, or household items.
The decision-making process for a B2C purchase is shorter than for a B2B purchase, especially for items with lower value. B2C businesses usually spend less money to make a sale (have a lower average order value and fewer repeating orders) than their B2B counterparts.
B2B (Business-to-Business)
In this model, a business sells its product or service to another business. The buyer is sometimes the end-user but usually the buyer resells to the consumers. These transactions have a longer sales cycle, higher order value, and higher repeat purchases.
B2B e-commerce platforms help other businesses streamline their operations and transactions.
B2B2C (Business-to-Business-to-Consumer)
This is a business model where a company partners with another organisation to reach a wider audience of consumers for a product or service that it cannot solely provide on its own.
For example, a retail store and a delivery service work together to offer online shopping and home delivery. The store can sell more while the delivery service partner generates revenue through sales commissions, delivery fees, etc.
B2G (Business-to-Government)
B2G is an e-commerce model that involves transactions between private businesses and government entities/public administrations. Government institutions issue a request for proposal (RFP).
Businesses will submit proposals and statements of capabilities and respond to government solicitations. Then, the government awards contracts to the businesses that best meet their needs.
C2B (Consumer-to-Business)
C2B is a business model where consumers provide products or services to businesses. Consumers directly connect with businesses. An example of this is a graphic designer customising a company logo and a photographer taking photos for an e-commerce website.
C2C (Consumer-to-Consumer)
C2C e-commerce businesses are referred to as online marketplaces where consumers buy and sell goods and services to each other. These act as intermediaries between consumers.
Examples of these businesses are Carousell, Shopee, and eBay.
Why Singapore for Your E-Commerce Venture?
Besides the robust economy and infrastructure in Singapore, there are many other reasons why you should start your venture here.
Government and Private Support
The first notable program is the Retail ITM 2025 where the government envisions a vibrant and globally competitive retail ecosystem that excites locals and also global consumers. It plans to accelerate internationalisation through e-commerce and market access initiatives, rejuvenate retail by inspiring new experiential concepts and innovations, encourage glocal (global and local) brand collaborations to reach new customer segments, and more.
Another project, which is a former government project under the Ministry of Trade and Industry, is the Action Community for Entrepreneurship (ACE). It is now a private-led, non-profit organisation that supports businesses like yours to connect with similar businesses, with potential investors and technology providers. Talk about networking and collaboration. It also offers workshops and training programs and helps e-commerce businesses access funding and grants from government agencies and private investors.
Other incentives include the Enterprise Development Grant (EDG) and the Productivity Solutions Grant (PSG). EDG supports projects that help you grow and transform your business. You may be eligible for up to 50% of qualifying costs. PSG, on the other hand, from the name itself, helps companies in Singapore improve their productivity by providing IT solutions and equipment so they can automate existing processes.
Another grant is the Market Readiness Assistance (MRA). It helps companies expand into new markets internationally by defraying the costs (up to 50% of qualifying costs) of market promotion outside Singapore, including business development and setup. You may also benefit from Startup SG Founder as they provide access to resources such as funding, talent and a diverse network.
Visit the corresponding websites for eligibility requirements and steps on how to apply.
How to Start an E-Commerce Business?
Know Your Niche and Target Audience
What are you passionate about? And, do you know a lot about it? You might want to start with something you are interested in and then discover if there is a demand for the product you have in mind.
Are there other stores selling it? If yes, are they doing well? What is working for them, and what area can you improve? It is important that you do market research. After this, identify your target audience.
To define a niche, begin with a broad market. Then identify a segment that has few designers and retailers. Narrow down your choice further. For example, you are interested in household products. Your store can sell specific bathroom items that are not too mainstream but are helpful when used.
Validate Your Product
Your product should solve a problem or fulfill a need for your target audience. Otherwise, it won’t sell. It must be as unique as possible. Think about what makes your product stand out from the competition. Aside from uniqueness, is it of higher quality than competitors? And is it more affordable?
You must gain favourable answers to these questions before you test your product idea on a small scale.
Take a look at factors such as profitability, competition and market demand. To be able to understand the third factor, you must know how to use the following tools:
- Search Engine Optimisation tools
- Social media
- Surveys
- Methods for market research
The above tools will be of great help to you so you can choose the right business model and determine industry leaders and competitors. Do a SWOT analysis to identify your product’s strengths and weaknesses.
Determine What To Sell
After those initial steps, you will be able to finalise your product. Now think about where to source them. Will you make your own products, wholesale, dropship, or use a print-on-demand service?
Create a Business Plan
The next step is to outline a business plan that will contain all the salient points: your objectives, target market, marketing strategies, and financial projections. This gives you a bird’s eye view of what your e-commerce business will look like and presents investment opportunities for investors to further the growth of your company.
Aim for a concise yet focused plan. It should not exceed 20 pages.
Source Your Products
Sourcing is the next step on the ladder. After identifying how the sourcing will be (in the previous step), begin sourcing the products for your e-commerce business to sell to your future clients.
If you want to build your own brand and materialise your vision, partnering with a manufacturer is an excellent option. If you are thinking about maximising profits, wholesaling could be your way to go, as you can buy goods in bulk at a discounted price. And if you want to sell products without managing inventory, dropshipping is for you.
Establish Your Platform
When establishing your sales platform, you should think of the most efficient path to reach your audience. You can create your own website and sell products there or sell on e-commerce platforms like eBay.
After putting up your sales channel, you may now continue setting up your e-commerce business.
- Think of a unique name for your business. It should catch the attention of your audience.
- Create a logo to represent your business. You may opt for a minimalistic design or the usual style.
- Put up your business online through social media marketing to penetrate the market. If you’re eyeing your own website or platform, you may want to try Shopify, Wix, and WooCommerce. They have different features for various types of businesses.
- The last step is to register your business. Apply for an EIN or Employer Identification Number and obtain all needed permits and licences so you can operate legally in Singapore.
Pre-Launch, Launching, and Marketing
As you are approaching your launch date, there are a few things to get done so you are fully prepared for the launch of your business.
- Finalise your listings on your platform.
- Set up your payment options.
- Consider including discounts for first-time purchases.
- Run your website to check if all elements and functions are fully operational.
In launching your business, you should carefully plan your marketing strategies. If you do not know anything about SEO, research its importance to online businesses and engage professionals to take charge of it. You must also plan your social media strategies, email marketing, and content marketing.
Conclusion
Putting up an e-commerce business in Singapore presents a multitude of opportunities. But it also comes with challenges. Let Corporate Services Singapore take one burden off your shoulders by entrusting company incorporation to us. We help entrepreneurs establish their companies with ease! Talk to us today.
