R. Hirschmann
Research expert covering Singapore, Indonesia and Malaysia
Cross-border e-commerce in Singapore - statistics & facts
Singaporean consumers have a long tradition of shopping cross-border, be it the weekend grocery runs in neighboring Johor Bahru in Malaysia or the shopping trips to Bangkok’s many weekend markets and shopping malls. With favorable currency exchange rates, products across the border tend to be that much cheaper, that it’s worth the trip. However, as more Singaporeans embrace online shopping channels, the limits to what products they can obtain are no longer constrained by physical distance. This was even more evident during the COVID-19 pandemic when lockdowns and border closures pushed consumers towards e-commerce.
For those who are shopping internationally online, the largest market for cross-border purchases in Singapore was China, followed by the United States, while the most frequently bought items from overseas were clothing and apparel. As to the demographics of cross-border shoppers from Singapore, close to 90 percent were adults of working age, between 25 to 64 years. Despite the convenience of cross-border e-commerce, those who do decide to purchase products from overseas must contend with several inconveniences. The deciding factors for Singaporean consumers on whether to purchase items online from overseas sites are delivery times and shipping fees. Furthermore, such purchases would require an internationally-accepted method of payment, such as credit cards, e-payment platforms, or an approved real-time payment method.
Furthermore, the increase in such online purchases led to greater volumes of cross-border payments. To facilitate such payments, Singapore is actively pursuing real-time payment linkages with several countries, such as Malaysia, India, and the Philippines. In 2021, Singapore launched its first real-time cross-border payment system with Thailand, which allows real-time transfers of funds up to one thousand Singapore dollars or 25,000 Thai baht via mobile. With such payment systems in place, consumers could enjoy a more secure and seamless international online shopping experience.
Borderless shopping in a time of border restrictions
In the two years since the pandemic broke out, Singapore’s e-commerce market grew more than threefold. Consumers were making online purchases more frequently and in greater volumes, both domestically and from abroad. The popularity of borderless commerce in Singapore is in part due to the lack of taxes on such purchases. Currently, imported goods purchased online that do not exceed 400 Singapore dollars are not subject to the goods and services tax (GST). This is set to change in 2023, however, when the GST would also be extended to such purchases.For those who are shopping internationally online, the largest market for cross-border purchases in Singapore was China, followed by the United States, while the most frequently bought items from overseas were clothing and apparel. As to the demographics of cross-border shoppers from Singapore, close to 90 percent were adults of working age, between 25 to 64 years. Despite the convenience of cross-border e-commerce, those who do decide to purchase products from overseas must contend with several inconveniences. The deciding factors for Singaporean consumers on whether to purchase items online from overseas sites are delivery times and shipping fees. Furthermore, such purchases would require an internationally-accepted method of payment, such as credit cards, e-payment platforms, or an approved real-time payment method.
Challenges brought about by cross-border e-commerce
The increased volume of cross-border e-commerce presents several challenges to the existing infrastructure, especially in logistics and payments. In 2021, the Singapore Customs cleared three times as many units of low-value goods, which are classified as goods imported by air or post not exceeding 400 Singapore dollars, compared to 2019. This led to longer clearing times for such goods, further extending the delivery times already exacerbated by disruptions in global logistics during the pandemic.Furthermore, the increase in such online purchases led to greater volumes of cross-border payments. To facilitate such payments, Singapore is actively pursuing real-time payment linkages with several countries, such as Malaysia, India, and the Philippines. In 2021, Singapore launched its first real-time cross-border payment system with Thailand, which allows real-time transfers of funds up to one thousand Singapore dollars or 25,000 Thai baht via mobile. With such payment systems in place, consumers could enjoy a more secure and seamless international online shopping experience.
