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Beginner’s Guide on Starting an E-commerce Business in Singapore
The worldwide pandemic threw e-commerce into a growth overdrive, with businesses pivoting digitally to survive and thrive. The novelty of having an online enterprise is still surging and starting an e-commerce business remains trendy. Low overheads, multiple business models, and a global clientele will ensure it remains so for the foreseeable future.
Singapore’s e-commerce market is currently worth SGD4.9 billion and growing as internet penetration matures. It is forecast to reach a market volume of SGD8.6 billion by 2023, creating sustainable income revenues for entrepreneurs. This signals a huge shift in the retail sector as digitalisation speeds up the decline of brick-and-mortar shops. It is forecast that by 2040, approximately 95% of all global retail will be via e-commerce.
Competition in this industry is rife as everybody and their neighbour is hitching a ride on the digital train. You’ll need some handy insights to stand out from the crowd, make an impact and ensure compliance. In this guide, we’ve covered all the relevant bases to give you a head start on the competition. If you need further assistance, 3E Accounting Singapore is always on hand for a quick chat.
What is an E-commerce Business?
E-commerce stands for electronic commerce, which covers commercial transactions and activities that take place online. It is seen as a subset of e-business, which encompasses all online businesses. E-commerce comprises e-tailers (online services, e.g. virtual tuition), e-goods (digital products, e.g. online courses) and physical goods from stores. These businesses can adopt any of the following business models as well:
- Direct-to-Consumer or D2C
- Consumer-to-Government or C2G
- Business-to-Government or B2G
- Government-to-Business or G2B
- Business-to-Consumer or B2C
- Consumer-to-Business C2B
- Consumer-to-Consumer or C2C
- Business-to-Business or B2B
E-commerce business types fall into several categories, some of which include the following:
- Dropshipping, Affiliate Marketing and Print-on-Demand – popular options are low on upfront investment and do not need inventory, but margins aren’t high while competition can be fierce on popular products.
- Wholesaling – a quick way to start selling various products but requires inventory management, deep pockets, and robust marketing.
- Private or White Labelling – can be costly but offers better brand, quality, and pricing control.
Why Start an E-commerce Business in Singapore?
Singapore is possibly one of the best places to begin your entrepreneurial e-commerce journey. Aside from robust governance and world-class infrastructure, this island nation ranks top in the ease of doing business. However, most notably for e-commerce businesses, Singapore has the fastest broadband download speeds in the world.
Statistics indicate that Singapore’s B2C e-commerce sector has an 8.35% CAGR (compound annual growth rate). Market volume forecasts for 2025 is approximately USD4,079 million, with 90% of the population online.
Government initiatives are addressing e-commerce challenges head-on. These include partnering with Google Inc. (Skills Ignition SG) and hosting the E-commerce Expo Asia in October 2021.
The Government is launching several 5G networks to boost connectivity and infrastructure. With strong policies and plans, Singapore is well on its way to being a smart nation and Southeast Asia’s e-commerce hub.
What Does an E-commerce Business Need?
Having an e-commerce business differs from running a traditional enterprise in a number of ways. It’s essential to grasp that the dynamics driving such business models are versatile, fluid, and borderless. Hence, preparation and planning are key and include:
- Due diligence – research viable business ideas, competition, target market, your commitment level, etc.
- Writing up a business plan – niches, objectives, goals, milestones, financial planning, budget, etc.
- Choosing a business structure – sole proprietorship, limited liability partnership, limited company, etc. Check out 3E Accounting’s guide to company registration in Singapore for more detailed information.
- Planning and building your online store – choose a reliable platform and sales channel with easy integration and plenty of templates such as Shopify, WooCommerce, etc.
These preliminary steps will enable you to begin your entrepreneurial journey while making the most of all available resources. Hence, you might find that a home setup is the most viable when starting an e-commerce business. The Singapore Home Office Scheme enables work-from-home businesses and offers guidelines to ensure compliance.
As an online enterprise, having a website is crucial – it’s your virtual storefront, the ambassador of your business. Get the best you can afford in design and development – looking good is as important as ease of use. Intuitive and attractive design, secure online payment, fast loading pages, etc., are vital in combatting ‘abandoned cart’ trends. A great website, memorable logo, domain name, and reliable hosting will complement your active social media marketing rollout.
Requirements to Start an E-commerce Business in Singapore
Whether you’re a brick-and-mortar establishment or a purely online company, you will need to register your business. It’s pretty straightforward – simply use your Singpass account to log in to BizFile and follow the guidelines.
BizFile is the Singapore Accounting and Corporate Regulatory Authority’s (ACRA) online company registration platform. It is an essential tool utilised by all enterprises registered in Singapore to handle business-related matters. You also have the option of engaging Singapore company incorporation firms such as 3E Accounting. We’ll handle the entire incorporation process, thereby allowing you to focus on essential issues like running your business.
The basics of registering or incorporating a business in Singapore follows a simple method:
- Choose and register a suitable company name with ACRA – you will need to follow ACRA’s strict ‘naming rules’.
- Select a business structure that works best according to your business plan.
- Collate incorporation documentation for submission – these include a business address, Articles and Memorandum of Association, information on directors and shareholders, etc.
- Follow the instructions and fill up the online registration form.
- Pay the appropriate fees and register for taxes with the Inland Revenue Authority of Singapore (IRAS).
- Get a corporate bank account and a secure payment gateway to handle online transactions.
Approvals for an E-commerce Business in Singapore
The InfoComm Media Development Authority (IMDA) regulates all internet content, information and communication, and media in Singapore. It is a merger of Singapore’s Infocomm Development Authority and Media Development Authority (previously, the Singapore Broadcasting Authority). The IMDA currently includes the Personal Data Protection Commission, which regulates data protection in Singapore.
Rules and regulations are strict so that consumer protection and confidence remain high. Relevant and applicable statutes to be aware of include:
- Internet Code of Practice
- Copyright Act and Trade Marks Act
- Personal Data Protection Act
- Sale of Goods Act
- Electronic Transactions Act
E-commerce businesses will need licences and permits depending on the type of products or services. Hence, approvals are relative to business activities, and engaging professional help is the best way to stay fully compliant. The following are a few types of activities that may require licencing:
- Selling second-hand goods
- Gambling or games of chance
- Offering financial services or products
- Promotional activities
You can contact your corporate service provider in Singapore to ensure full compliance.
How to Grow Your E-commerce Business
The e-commerce landscape is infinite, robust and expanding. You can turn the tide for your business by implementing innovative strategies that will drive online sales. Knowing which products or services to sell is as crucial as how you market them. Social media is the way to go, and targeted advertising and marketing campaigns are a must.
Niching is a great business idea, but it can also limit your business to a particular market. A reliable strategy is to thoroughly evaluate your product or service via research and validate the idea for success. This should be an ongoing exercise to ensure that your products continuously meet market demands. Pair this with excellent, personalised, 24/7 customer service, and your formula for success will be spot on.
Further, SEO (search engine optimisation) strategies should be a constant for your website to drum up significant organic traffic. Your website and store need search engine ranking, and great SEO can ensure high and consistent traffic. Blog away, post on social media and delve into analytics such as Facebook Pixel, Google Shopping, etc. Get some help to upskill as it pays to know how to use these tools.
The subscription-based business model is trending right now, but you need to pair it with omnichannel marketing strategies. Ensure your services are available via all channels such as laptops, tablets and especially mobiles – m-commerce is taking off. By extension, mixing your sales channels allows faster and better access to current and new customers. Channels such as Shopify, Etsy, etc., along with solid branding and marketing campaigns, can lead to high conversion rates.
There’s no reason to procrastinate and delay starting an e-commerce business in Singapore. E-commerce is the enterprise of the future trending right now and shaping the way the world does business. You can explore this exciting digital realm confidently and successfully with 3E Accounting by your side.
As a 21st-century corporate service provider in Singapore, 3E Accounting’s company incorporation packages are fully digitalised. We offer comprehensive outcomes that utilise cutting-edge and customisable solutions for the modern business entrepreneur. Contact 3E Accounting today to begin your entrepreneurial journey and make your dreams a reality.